Court Opinion

ID: 4579755
Source: CourtListenerOpinion
Date Created: 2020-10-22 19:00:18.324449+00
Date Added: 2024-06-11T09:28:14.418288
License: Public Domain

UNPUBLISHED

                       UNITED STATES COURT OF APPEALS
                           FOR THE FOURTH CIRCUIT

                                       No. 19-4858

UNITED STATES OF AMERICA,

                     Plaintiff - Appellee,

              v.

ARTHUR JOSEPH GERARD, III,

                     Defendant - Appellant.

Appeal from the United States District Court for the Western District of North Carolina, at
Charlotte. Max O. Cogburn, Jr., District Judge. (3:16-cr-00270-MOC-DSC-1)

Submitted: October 9, 2020                                    Decided: October 22, 2020

Before MOTZ and KING, Circuit Judges, and SHEDD, Senior Circuit Judge.

Affirmed in part, vacated in part, and remanded by unpublished per curiam opinion.

William R. Terpening, TERPENING LAW, PLLC, Charlotte, North Carolina, for
Appellant. Richard E. Zuckerman, Principal Deputy Assistant Attorney General, S. Robert
Lyons, Chief, Criminal Appeals & Tax Enforcement Policy Section, Katie S. Bagley, Mark
S. Determan, Tax Division, UNITED STATES DEPARTMENT OF JUSTICE,
Washington, D.C.; R. Andrew Murray, United States Attorney, OFFICE OF THE
UNITED STATES ATTORNEY, Raleigh, North Carolina, for Respondent.

Unpublished opinions are not binding precedent in this circuit.
PER CURIAM:

       Arthur Joseph Gerard, III, appeals his conviction and sentence for conspiracy to

commit tax fraud, in violation of 18 U.S.C. § 371. Gerard asserts that the district court

erred by not giving him complete access to discovery while he was detained. Gerard further

asserts that the court erred by denying his request to read to the jury three books that helped

him shape his tax minimization plan. Lastly, he asserts that the court erred in applying the

Sentencing Guidelines enhancement for obstruction of justice. While we conclude that

there is no reason to disturb Gerard’s conviction, we determine that the court erred in

applying the enhancement for obstruction of justice by not making certain findings. We

therefore affirm the conviction, but vacate the sentence and remand for resentencing.

       We conclude that the district court did not abuse its discretion in limiting Gerard’s

access to discovery while he was detained. Gerard was transferred to a county jail where

he was able to spend more time with counsel to review the discovery. Gerard, with counsel,

was permitted to review every item of discovery. Gerard fails to show that he was denied

access to discovery, denied the opportunity to assist in his defense, or was compelled to go

to trial before having the opportunity to review discovery. We conclude that there is no

merit to Gerard’s contention that the court’s discovery order in this regard denied his right

to equal protection or his right to consult with counsel.

       We further conclude that the district court did not err in barring Gerard from reading

three books to the jury in support of his defense that he had a good faith belief that his tax

minimization plan was lawful. We review a district court’s evidentiary rulings for abuse

of discretion, and will only overturn a ruling that is arbitrary and irrational. United States v.

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Farrell, 921 F.3d 116, 143 (4th Cir.), cert. denied, 140 S. Ct. 269 (2019). Rule 403 of the

Federal Rules of Evidence states that “[t]he court may exclude relevant evidence if its

probative value is substantially outweighed by a danger of . . . unfair prejudice, confusing

the issues, misleading the jury, undue delay, wasting time, or needlessly presenting

cumulative evidence.” We agree with the district court that Gerard’s request to read all

three books would amount to something similar to the presentation of expert testimony,

but without the opportunity for the Government to cross-examine the expert. Furthermore,

as the district court observed, Gerard did not have to prove that his tax minimization system

was lawful, only that his good faith belief in the lawfulness of his system was credible. See

Cheek v. United States, 498 U.S. 192, 201-02 (1991) (holding that a defendant in a criminal

tax case can assert a defense of ignorance or misunderstanding of the tax law, leading to

“a good-faith belief that he was not violating any of the provisions of the tax laws”).

Moreover, as the court observed, Gerard’s proposal to read all three books would confuse

the jury. We note that, even though the court permitted Gerard to read excerpts from the

books, Gerard chose to read excerpts from just one of the three books, suggesting that it

was not so imperative that he read each book to the jury.

       “Where the enhancement for obstruction of justice is based on a defendant’s

perjurious testimony, trial court findings should encompass the factual predicates for

perjury, namely that the defendant (1) gave false testimony; (2) concerning a material

matter; (3) with willful intent to deceive.” United States v. Andrews, 808 F.3d 964, 969

(4th Cir. 2015) (internal quotation marks omitted). The Government bears the burden of

proving the enhancement applies by a preponderance of the evidence. Id. at 968. Where

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“a defendant objects to a sentence enhancement resulting from [his] trial testimony, a

district court must review the evidence and make independent findings necessary to

establish” these elements. United States v. Dunnigan, 507 U.S. 87, 95 (1993). While a

court may satisfy this requirement by making “a finding of an obstruction of, or

impediment to, justice that encompasses all of the factual predicates for ‘perjury,’ . . . it is

preferable for a district court to address each element of the alleged perjury in a separate

and clear finding.” Id. “[A] mere statement that the defendant committed perjury is

insufficient.” United States v. Perez, 661 F.3d 189, 193 (4th Cir. 2011).

       We have explained the district court’s obligation to make these findings, stating: “If

a district court does not make a specific finding as to each element of perjury, it must

provide a finding that clearly establishes each of the three elements.” Id. For instance, for

the willfulness element, “it would . . . be enough for the court to say, ‘The defendant knew

that his testimony was false when he gave it.’” Id. We observed that the district court

found that the defendant’s testimony was false, but the court never indicated that the false

testimony concerned a material matter or was willfully given. Id. at 193-94.

       We conclude that the district court’s explanation for the obstruction of justice

enhancement failed to account for the elements of perjury. While the court found that

Gerard’s testimony was contradictory and false, the court did not rule on whether the false

testimony was material or given willfully.           Because the court’s explanation was

insufficient, we are compelled to vacate the sentence and remand for resentencing. See

United States v. Smith, 62 F.3d 641, 647 (4th Cir. 1995) (vacating obstruction of justice

enhancement and remanding for resentencing).

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      Accordingly, we affirm the conviction but vacate the sentence and remand for

resentencing. We dispense with oral argument because the facts and legal contentions are

adequately presented in the materials before this court and argument would not aid the

decisional process.

                                                      AFFIRMED IN PART, VACATED
                                                         IN PART, AND REMANDED

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