Court Opinion

ID: 168339
Source: CourtListenerOpinion
Date Created: 2010-08-14 16:24:43+00
Date Added: 2024-06-11T17:24:57.031938
License: Public Domain

F I L E D
                                                                United States Court of Appeals
                                                                        Tenth Circuit
                    UNITED STATES CO URT O F APPEALS
                                                                    November 2, 2006
                                 TENTH CIRCUIT                     Elisabeth A. Shumaker
                                                                       Clerk of Court

 U N ITED STA TES O F A M ER ICA,

               Plaintiff-Appellee,
                                                       No. 06-1008
          v.                                          (D. Colorado)
                                               (D.C. No. 02-CR-541-W DM )
 LESTER R. R ETH ER FO RD ,

               Defendant-Appellant.

                            OR D ER AND JUDGM ENT *

Before H E N RY, BR ISC OE, and O’BRIEN, Circuit Judges. **

      Lester R. Retherford was convicted after a jury trial of (1) conspiring to

defraud the United States by impairing and impeding the functions of the Internal

Revenue Service, in violation of 18 U.S.C. § 371, and (2) causing the preparation

and presentation of false tax returns, in violation of 26 U.S.C. § 7206(2).

      *
        This order and judgment is not binding precedent, except under the
doctrines of law of the case, res judicata, and collateral estoppel. The court
generally disfavors the citation of orders and judgments; nevertheless, an order
and judgment may be cited under the terms and conditions of 10 TH C IR . R. 36.3.

      **
        After examining the briefs and appellate record, this panel has determined
unanimously that oral argument would not materially assist the determination of
this appeal. See Fed. R. App. P. 34(a)(2); 10th Cir. R. 34.1(G). The case is
therefore ordered submitted without oral argument.
Treating the United States Sentencing Guidelines as advisory, the court imposed

concurrent sentences of imprisonment of forty-eight months respectively.

      In this appeal, M r. Retherford challenges the district court’s application of

the G uidelines in determining that the amount of tax loss under USSG § 2T4.1(D )

was $3,132,259. He contends that because it made no special findings as to the

scope of the conspiracy, the jury may have convicted him of participating in a

much narrow er conspiracy— one involving only a single tax return and a tax loss

of only $28,000. W e are not persuaded by M r. Retherford’s argument and

therefore affirm his sentence.

                                 I. BACKGROUND

      From October 1992 until September 2001, M r. Retherford and his

codefendant Paul D. Harris w orked together to assist federal taxpayers in

concealing their income in offshore bank accounts by either not reporting the

income on federal tax returns or misrepresenting the funds in the offshore

accounts as deductible business expenses. The defendants used several business

entities to carry out this plan, including Tow er Executive Resources and First

America Research.

      The record indicates that M r. Retherford and M r. Harris were advised that

their plan was illegal. In 1994, an attorney wrote a letter to M r. Harris informing

him that the plan violated provisions of the Internal Revenue Code that carried

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criminal penalties. In 1997, a second attorney reviewed the tax returns of some of

the taxpayers who had participated in the defendants’ plan, and he told the

defendants that the plan was “a sham.” Rec. vol. XXIX, at 8 ¶ 33 (presentence

report).

      In a superceding indictment filed in August 2004, a federal grand jury

charged M r. R etherford, M r. H arris, and a third defendant— Robert N.

Bedford— with: (1) one count of conspiring to defraud the United States by

assisting in the preparation of false and fraudulent tax returns, in violation of 18

U.S.C. § 371; (2) twenty-six counts of aiding and assisting in the preparation of

particular false and fraudulent tax returns for 1997-2000, in violation of 26 U.S.C.

§ 7206(2); (3) one count of filing a false report with the Secretary of the

Treasury, in violation of 31 U.S.C. §§ 5314 and 5322; and (4) one count of failing

to provide financial information to the Internal Revenue Service, in violation of

31 U.S.C. § 5322.

      A jury convicted M r. Retherford of the § 371 conspiracy count and one of

the § 7206(2) counts for assisting in the preparation of a false or fraudulent tax

return— one that involved the tax return of John M ikutowicz for 1998 (as charged

in count 23 of the superceding indictment). The jury acquitted M r. Retherford on

eleven of the § 7206(2) counts. As to the remaining counts, the jury was unable

to reach a verdict.

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      The presentence report noted that Guidelines are now advisory. See Rec.

vol. XXIX, at 9 ¶ 38 (stating that the court, “while not bound to apply the

Guidelines, must consult the advisory guidelines and take them into account with

the sentencing factors identified at 18 U.S.C. § 3553(a) when determining the

sentence”). Applying the 2000 addition of the Guidelines, the report calculated

the base offense level to be twenty-one. That level was based upon a tax loss of

$3,132,259. See id. at 8 & ¶ 34 (explaining that, (a) pursuant to USSG §

2T1.1(c)(1)(A), “[if] the offense involved filing a tax return in w hich gross

income w as underreported, the tax loss shall be treated as equal to 28% of the

unreported gross income[,]” (b) the amount of underreported gross income in this

case w as $11,186,641, and (c) 28% of $11,186,641 is $3,132,259).

      The presentence report then recommended the following upward

adjustm ents in the offense level: (a) a two-level increase pursuant to USSG §

2T.1.4(b)(1)(A) because M r. Retherford committed the offenses as part of a

scheme from which he derived a substantial portion of his income; (2) a two-level

increase pursuant to USSG § 2T1.4(b)(2) because the offenses involved

sophisticated concealment; (3) a four-level increase pursuant to USSG § 3B1.1(a)

because the M r. Retherford was an organizer or leader of a criminal activity that

involved five or more participants or was otherwise extensive; (4) a two-level

increase pursuant to USSG § 3C1.1 for obstruction of justice.

                                          -4-
      At the sentencing hearing, the district court rejected M r. Retherford’s

argument that the base offense level should be calculated solely by determining

the tax loss arising out of §7206(2) count involving the 1998 tax return of M r.

M ikutowicz:

                      The issue here is that argued by the defendant that
               the only specific conviction for [M r. Retherford] was
               Count 23, and that should be the lim itation of the amount
               which would place, in essence, the defendant at offense
               level 12 rather than 21. I conclude that the Government is
               correct in its argument. I agree that I am bound, as
               defense also acknowledges, in this circuit to consider the
               issue and apply my observation of the evidence.

                     I would conclude that [M r. Retherford] participated
               in the Tow er scheme, which, in essence, was to take
               income otherwise attributable to a taxpayer, create false
               expenses, m ove the income to an offshore account, and
               counsel that it could be, once moved, used to really pay
               personal expenses.

                      It’s as simple as that in m y view . And I w ould
               certainly conclude, as a matter of preponderance, which is
               the standard as I understand it, that this defendant should
               be considered to be responsible for all the relevant
               conduct. A nd the law , as it stands, does not require that a
               jury make this determination but that I make it.

                      And having been the trial judge, I certainly so
               conclude clearly without any question in my mind or doubt
               that this defendant was involved in creating false,
               untruthful matters that were simply fiction and w ith the
               intent that that would be used to keep the taxpayer from
               paying what was otherwise due on account of income
               attributable to the taxpayer.

                     That was the scheme, and it was one that, stripped
               of everything else, was simply creating various entities

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              and fictional expenses to purportedly keep income from
              being income. That, therefore, means that I’m dealing
              with the recommended offense level 21.

Rec. vol. XXVIII, at 53-54.

       As to the other upward adjustments, the court noted:

              Under the best case scenario, if I don’t include obstruction
              of justice and deriving substantial portion of the income
              and lessen the adjustment for role [in the offense] to 3, the
              guidelines would have a 26 offense level and provide for
              a sentence of 63 to 78 months. W ith obstruction of justice
              it would be at 28, and a 78 to 97 [month] range.

Id. at 56.   Stating that it was aware of M r. Retherford’s health problems, the

court sentenced M r. Retherford to a term of incarceration substantially below the

minimum of the lesser of these two Guideline ranges— forty-eight months.

                                  II. D ISC USSIO N

       M r. Retherford now argues that the district court erred in defining the scope

of the conspiracy. According to M r. Retherford, “the jury may have convicted

[him] of only conspiring with M r. Harris to help M r. M ikutowicz falsify his 1998

1040. In that case, the tax loss would have been only $28,000 [and] [t]he

resulting base offense level would have been 12 pursuant to U.S.S.G. §

2T4.1(D ).” Aplt’s Br. at 8.

                                           -6-
      M r. Retherford’s argument is based on a misunderstanding of the role of

judge and jury in sentencing. Under the post-Booker sentencing scheme, “so long

as the district court applies the Guidelines in an advisory, rather than a

mandatory, fashion, it may rely on facts found by a judge.” United States v.

Bustamante, 454 F.3d 1200, 1202 (10th Cir. 2006); see also United States v.

Ferguson, 456 F.3d 660, 664 (6th Cir. 2006) (stating that “this court and others

have repeatedly held since Booker that district judges can find the facts necessary

to calculate the appropriate Guidelines range using the same

preponderance-of-the-evidence standard that governed prior to Booker”); United

States v. Bah, 439 F.3d 423, 426 n.1 (8th Cir. 2006) (“[J]udicial fact-finding

using a preponderance of the evidence standard is permitted provided that the

guidelines are applied in an advisory manner.”).

      Here, the district court found by a preponderance of the evidence that the

presentence report’s calculation of the amount of the tax loss was correct and

that, as a result, the base offense level was twenty-one. The district court’s

finding is supported by § 1B1.3 of the Guidelines, which “recognizes that a

defendant can be held accountable for ‘relevant conduct’ for which he has not

been convicted.” U nited States v. Lindsay, 184 F.3d 1138, 1141 n.3 (10th Cir.

1999). In light of the court’s findings, the alleged ambiguity regarding the jury’s

conclusion as to the scope of the conspiracy is not determinative. Because the

court’s finding of the amount of tax loss is not clearly erroneous, see United

                                          -7-
States v. Rodriguez-Delma, 456 F.3d 1246 (10th Cir. 2006), we defer to its

decision.

                              III. CONCLUSION

      Accordingly, we AFFIRM M r. Retherford’s sentence.

                                              Entered for the Court,

                                              Robert H. Henry
                                              Circuit Judge

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