Court Opinion

ID: 175899
Source: CourtListenerOpinion
Date Created: 2010-09-24 17:50:32+00
Date Added: 2024-06-11T17:25:37.147380
License: Public Domain

UNPUBLISHED

                   UNITED STATES COURT OF APPEALS
                       FOR THE FOURTH CIRCUIT

                             No. 09-5064

UNITED STATES OF AMERICA,

                 Plaintiff - Appellee,

          v.

BARRY G. LUSK,

                 Defendant - Appellant.

Appeal from the United States District Court for the District of
South Carolina, at Anderson.    Henry F. Floyd, District Judge.
(8:08-cr-01218-HFF-1)

Submitted:   September 7, 2010            Decided:   September 24, 2010

Before WILKINSON, NIEMEYER, and DAVIS, Circuit Judges.

Affirmed by unpublished per curiam opinion.

J. Bradley Bennett, SALVINI & BENNETT, LLC, Greenville, South
Carolina, for Appellant.     William N. Nettles, United States
Attorney, William C. Lucius, Assistant United States Attorney,
Greenville, South Carolina, for Appellee.

Unpublished opinions are not binding precedent in this circuit.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

             Barry G. Lusk appeals his conviction and thirty-three

month      sentence       on    one     count         of   attempted       tax    evasion        in

violation     of     26    U.S.C.       § 7201         (2006).        Lusk       argues    that:

(1) the district court lacked jurisdiction to try him; 1 (2) the

Government did not put forth evidence sufficient to sustain a

conviction; (3) the district court erred in admitting evidence

of an airplane purchase on cross-examination of his wife; and

(4) his sentence was procedurally unreasonable.                             For the reasons

that follow, we affirm.

                                  I.        Jurisdiction

             Counsel first questions whether the district court had

jurisdiction over this criminal matter in light of Shultz v.

I.R.S., 395 F.3d 297 (2d Cir. 2005).                       Congress has provided that

“[t]he district courts of the United States shall have original

jurisdiction,        exclusive         of   the       courts   of    the    states,       of    all

offenses against the laws of the United States.”                                     18 U.S.C.

§ 3231.      Lusk was charged with a violation of 26 U.S.C. § 7201,

which makes it a crime against the United States to “attempt[]

in   any    manner    to       evade    or   defeat         any     tax    imposed    by       this

      1
       Counsel notes that in his opinion, this claim is without
merit. Accordingly, he makes the argument pursuant to Anders v.
California, 386 U.S. 764 (1967).

                                                  2
title[.]”        The    Shultz   case,     cited      by    Lusk   in    his    pro    se

supplemental brief, deals exclusively with the enforceability of

an administrative summons.               Accordingly, Lusk’s jurisdictional

claim is entirely without merit.

                       II.   Sufficiency of the Evidence

            Lusk next argues that the Government failed to prove

that he acted willfully when he failed to file his tax return

and improperly requested refunds from the I.R.S.                        Specifically,

he claims that he relied in good faith on the advice of one Chad

Prater, a purported tax expert, who improperly advised him that

he need not file taxes, among other reasons, because the I.R.S.

lacks legal authority to tax personal income, and because he

(Lusk) is not a citizen of the United States. 2

            “A     defendant      challenging         the   sufficiency        of     the

evidence faces a heavy burden.”                 United States v. Foster, 507

F.3d 233, 245 (4th Cir. 2007).                 We review a sufficiency of the

evidence challenge by determining whether, viewing the evidence

in   the   light   most      favorable    to    the   government,       any    rational

trier of fact could find the essential elements of the crime

beyond a reasonable doubt.           United States v. Collins, 412 F.3d

      2
       Prater has been enjoined from offering tax advice to U.S.
citizens.

                                          3
515, 519 (4th Cir. 2005).            We will uphold the jury’s verdict if

substantial evidence supports it, and will reverse only in those

rare cases of clear failure by the prosecution.                              Foster, 507

F.3d    at   244-45.      We    do   not    review       the    credibility      of     the

witnesses and assume that the jury resolved all contradictions

in the testimony in favor of the Government.                    Id. at 245.

               In order to establish a violation of 26 U.S.C. § 7201,

the    Government    must    prove    the       defendant      acted    willfully       and

committed      an   affirmative      act    that        constituted     an     attempted

evasion of tax payments and, as a result, a substantial tax

deficiency existed.          United States v. Wilson, 118 F.3d 228, 236

(4th    Cir.     1997).        Willfulness,       in     this    context,       means     a

voluntary, intentional violation of a known legal duty.                                 See

Cheek v. United States, 498 U.S. 192, 201 (1991).                        A belief, in

good faith, that one has complied with the tax laws negates

willfulness and is therefore a defense, even if the belief is

unreasonable.       In other words, the Government must demonstrate

that Lusk did not have a subjective belief, however irrational

or unreasonable, that the income tax system did not apply to

him.    Id. at 201-02.

               Both Lusk and the Government adduced evidence bearing

on    Lusk’s    subjective     belief.          While    Lusk    testified      that     he

“completely      believed”      in   Prater’s      methodology         for    “avoiding”

taxes, the jury had ample evidence before it to conclude, based

                                            4
on the credibility of the witnesses (including Lusk) that Lusk

was not acting in good faith reliance on Prater’s advice.                                    We

decline to invade this realm of fact-finding left to the jury.

        III. Admission of Evidence of an Airplane Purchase

            During     its      case-in-chief,          the    Government         sought    to

introduce evidence that Lusk purchased a $180,000 airplane in

2000, the year for which he filed no tax return.                            The Government

argued that in order to purchase the plane, Lusk had completed a

form   that    stated      he    was      a    U.S.     citizen,         contrary    to     his

representations to the I.R.S.                   The district court excluded the

evidence as unduly prejudicial when Lusk agreed to stipulate

that he signed a non-I.R.S. document indicating that he was a

U.S. citizen.

            During     the      defense        case,    Lusk’s       wife,      Kelly     Lusk,

testified     that,    among     other        things,    she       and   her    husband     had

incentives     to     be     good    financial         stewards,         that    they     were

interested in making sound investments, and that their money

went   primarily      to   care     for       their    special      needs      child.       The

district    court     allowed       the   Government          to    cross-examine         Kelly

Lusk regarding the purchase of the airplane, finding that her

testimony     on    direct    examination          opened     the     door     for   such   an

inquiry.

                                               5
             We review the district court’s admission of evidence

for an abuse of discretion, “which we will not find unless the

decision was arbitrary and irrational.”               United States v. Blake,

571   F.3d   331,   346    (4th Cir. 2009)        (internal       quotation      marks

omitted), cert. denied, 130 S. Ct. 1104 (2010).                        “Evidentiary

rulings are . . . subject to harmless error analysis.”                        United

States v. Roe, 606 F.3d 180, 185 (4th Cir. 2010).

             Lusk   argues     that    pursuant      to    Fed.   R.   Evid.     403,

evidence of the airplane’s purchase did little more than inflame

the jury, and should have been excluded as highly prejudicial.

Assuming, though, that the district court properly excluded the

evidence in the Government’s case-in-chief, we conclude it was

properly     admitted     to   impeach       Kelly   Lusk    in    light    of     her

testimony regarding the couple’s financial prudence and goals.

Cf. United States v. Havens, 446 U.S. 620, 627-28 (1980) (“a

defendant’s     statements      made     in    response      to    proper     cross-

examination     reasonably      suggested       by   the    defendant’s        direct

examination are subject to otherwise proper impeachment by the

government, albeit by evidence that has been illegally obtained

and that is inadmissible on the government’s direct case, or

otherwise, as substantive evidence of guilt.”). 3

      3
       While the witness here was not the defendant as was the
case in Havens, we conclude that Havens’s rationale applies with
equal force in the present context.

                                         6
                       IV.    Reasonableness of Sentence

             Finally,        Lusk     argues         that    his    sentence       was

procedurally unreasonable as a result of two errors made by the

district court in calculating his advisory Guideline range.                        He

contends the court erred in attributing to him a loss amount of

between   $200,000      and      $400,000,     and    that   the   court   erred    in

subjecting       him   to    a     two-level    enhancement        for   obstructing

justice pursuant to U.S. Sentencing Guidelines Manual (“USSG”)

§ 3C1.1(2006).

             A   sentence     is    reviewed    for     reasonableness     under    an

abuse of discretion standard.                Gall v. United States, 552 U.S.

38, 51 (2007).         This review requires consideration of both the

procedural and substantive reasonableness of a sentence.                        Id.;

see United States v. Lynn, 592 F.3d at 572, 575 (4th Cir. 2010).

After determining whether the district court properly calculated

the defendant’s advisory Guideline range, this court must decide

whether the district court considered the 18 U.S.C. § 3553(a)

(2006) factors, analyzed the arguments presented by the parties,

and sufficiently explained the selected sentence.                          Lynn, 592

F.3d at 575-76; see United States v. Carter, 564 F.3d 325, 330

(4th Cir. 2009)        (holding        that,     while       the    “individualized

assessment need not be elaborate or lengthy, . . . it must

provide a rationale tailored to the particular case . . . and

[be] adequate to permit meaningful appellate review”).                      Properly

                                          7
preserved claims of procedural error are subject to harmless

error review.        Lynn, 592 F.3d at 576.

              For the purpose of calculating the amount of loss in a

tax evasion case, the Guidelines define tax loss as the total

amount   of    loss    that   was   the    object    of    the    offense.       USSG

§ 2T1.1(c)(1).         We have defined the object of the offense in a

tax evasion case as “the loss that would have resulted had a

defendant     been    successful    in    his   scheme    to     evade   payment   of

tax.”         United     States     v.    Delfino,        510     F.3d    468,     472

(4th Cir. 2007), cert. denied, 129 S. Ct. 41 (2008).                       At trial,

the Government adduced evidence that Lusk failed to pay taxes

for the year 2000 totaling over $180,000.                   The Government also

introduced evidence that Lusk attempted to improperly obtain tax

refunds for 1998 and 1999 totaling over $90,000.                         In light of

this evidence, we conclude that the district court did not err

in calculating the amount of loss attributable to Lusk.

              Lusk next argues that the court erred in applying a

USSG § 3C1.1 enhancement to his offense level for obstructing

justice.      Under USSG § 3C1.1, a defendant’s base offense level

is to be increased two levels for obstruction of justice if:

     the defendant willfully obstructed or impeded, or
     attempted to obstruct or impede, the administration of
     justice    with   respect    to   the    investigation,
     prosecution, or sentencing of the instant offense of
     conviction, and . . . the obstructive conduct related
     to (i) the defendant’s offense of conviction[.]

                                          8
USSG § 3C1.1.         The application notes for § 3C1.1 specifically

include the commission of perjury by defendant.                       USSG § 3C1.1

cmt. n.4(b).         For purposes of § 3C1.1, the Supreme Court has

defined     perjury        in     the    following     manner:       “[a]     witness

testifying under oath or affirmation violates this statute if

she gives false testimony concerning a material matter with the

willful    intent    to     provide      false   testimony,      rather   than    as   a

result    of   confusion,          mistake,      or   faulty   memory.”          United

States v. Dunnigan, 507 U.S. 87, 94 (1993).                    Where “a defendant

objects to a sentence enhancement resulting from h[is] trial

testimony, a district court must review the evidence and make

independent findings necessary to establish a willful impediment

to or obstruction of justice, or an attempt to do the same,

under the perjury definition we have set out.”                   Id. at 95.

            Here, the district court did not err in applying an

obstruction        enhancement          to   Lusk’s    offense     level.         Lusk

unequivocally testified that he believed in good faith that his

actions were lawful.             In light of the jury instructions, to find

Lusk     guilty,     the        jury    necessarily    found     Lusk’s     testimony

incredible.        Accordingly, the court did not err in finding that

Lusk committed perjury.

            Finally, because counsel submitted one issue to the

court in an Anders format, Lusk was given the opportunity to

submit a pro se supplemental brief.                     In that brief he again

                                             9
asserts that the district court lacked jurisdiction over his

trial, and makes myriad arguments that he is not subject to

income taxation.       We have reviewed these claims and find them

totally without merit.

            Accordingly, we affirm the judgment of the district

court.     We dispense with oral argument because the facts and

legal    contentions   are   adequately    presented    in   the    materials

before   the   court   and   argument    would   not   aid   the   decisional

process.

                                                                     AFFIRMED

                                    10