Court Opinion

ID: 803747
Source: CourtListenerOpinion
Date Created: 2012-07-06 13:55:58+00
Date Added: 2024-06-11T18:00:09.510236
License: Public Domain

In the

United States Court of Appeals
              For the Seventh Circuit

No. 11-1954

U NITED S TATES OF A MERICA,
                                              Plaintiff-Appellee,
                               v.

M ICHAEL V. C OLLINS,
                                          Defendant-Appellant.

             Appeal from the United States District Court
                 for the Southern District of Illinois.
       No. 3:10-CR-30061-001-WDS—William D. Stiehl, Judge.

     A RGUED S EPTEMBER 29, 2011—D ECIDED JULY 6, 2012

  Before R IPPLE, M ANION, and S YKES, Circuit Judges.
  S YKES, Circuit Judge. Michael Collins served for many
years as a city councilman and vice-mayor of East
St. Louis, Illinois, but left city service in 2002 and moved
to the suburbs. Although he no longer lived in the city,
he used his previous address in East St. Louis to con-
tinue to vote there and to establish residency for his
successful election and re-election to the public office of
precinct committeeman for the local Democratic Party.
This fraud attracted the attention of the Public Corrup-
2                                              No. 11-1954

tion Task Force in southern Illinois. Federal agents
checked his tax filings to verify his residency and discov-
ered that Collins had not filed federal or state income-
tax returns for almost two decades.
  Collins was indicted on multiple counts of tax evasion,
willful failure to file tax returns, and voter fraud. He
was convicted by a jury and the district court imposed a
within-guidelines sentence of 50 months in prison. On
appeal Collins challenges the jury instructions and the
sufficiency of the evidence on the tax-evasion and voter-
fraud counts. He also claims that the district court er-
roneously calculated the tax loss for purposes of arriving
at the guidelines sentencing range.
  We affirm. The district court used the Seventh Circuit
pattern jury instructions for tax evasion, which properly
define the required element of willfulness and need no
clarification to distinguish the crime of tax evasion from
a mere negligent failure to file a tax return. There was
no special reason for such a modification here; it’s not
remotely plausible to attribute a tax delinquency of
almost two decades to mere negligence. The jury was
properly instructed on the voter-fraud counts as well;
the court did not misstate Illinois law regarding
the requirements for establishing voting residency, as
Collins contends.
  The evidence on the tax-evasion and voter-fraud counts
was abundant and easily sufficient to support the jury’s
verdict. Collins did not file federal or state tax returns
for many years, and to hide his income, he commingled
his personal and business accounts, used a false Em-
No. 11-1954                                              3

ployer Identification Number, and misappropriated
the Social Security Number of his deceased business
partner. As for the voter-fraud counts, the evidence
established beyond any doubt that for several years
after he moved to the suburbs, Collins voted and ran
for office from an address in East St. Louis that he had
abandoned. Finally, the district court did not miscal-
culate the amount of the tax loss. The court properly
rejected the testimony of Collins’s tax-loss expert as
unreliable and credited the estimate offered by an IRS
Special Agent instead.

                     I. Background
  In 1980 Collins started a construction and demolition
company, C&R Construction Company, in East St. Louis.
He later suspended its operation when he was elected
to the East St. Louis City Council. Collins rose through
the Council’s leadership ranks, eventually serving as vice-
mayor for several years before leaving the Council in
2002. He then revived his construction business by ex-
ploiting his contacts in city government; his primary
customers were the City of East St. Louis and the East
St. Louis Housing Authority. And he held onto political
power, albeit in another capacity. In 2002, shortly after
leaving the City Council, Collins was elected to the public
office of precinct committeeman for the East St. Louis
Democratic Party. He was re-elected in 2004, 2006,
and 2008.
  Collins first came to the attention of the Public Corrup-
tion Task Force in the Southern District of Illinois in
4                                              No. 11-1954

March 2005. He was registered to vote at 22 Loisel Drive
in East St. Louis and regularly voted in federal elections
based on that address. He also used that address to
establish residency for the office of Democratic precinct
committeeman. Yet Collins did not, in any sense of the
word, live at 22 Loisel Drive. In September 2002, when
he stepped down from the City Council, Collins moved
out of the city and leased a home in Belleville, a suburb
about 15 minutes from the Loisel Drive address in East
St. Louis. About a year later, he bought a newly con-
structed home at 4382 Redfield Drive in Swansea, a
nearby suburb, and moved his family there. The home
in Swansea was, by all accounts, his permanent resi-
dence. Collins enrolled his daughter in the local public
school, registered and garaged his vehicles at his
home in Swansea, and listed the Swansea address as
his primary residence on various financial and real-
estate documents.
  Federal agents opened an investigation and checked IRS
records to see what address Collins listed on his tax
returns. They made a shocking discovery: Collins had
not filed a federal income-tax return since March 1992,
when he submitted a belated return for the 1990 tax year.
Nor had he paid any state taxes for 22 years. On March 15,
2005, federal agents paid a visit to the Loisel Drive prop-
erty. There they were greeted by Collins’s nephew, who
was the only occupant of the home (the property was
owned by Collins’s sister). The agents asked to see Col-
lins’s bedroom, and the nephew showed them to an
unfurnished room at the back of the house. The room was
No. 11-1954                                                 5

almost completely empty, containing only a portable
toilet, a walker, and one item of clothing in the closet.
  The visit from federal agents prompted Collins to file
delinquent federal tax returns for tax years 1998 through
2005. He did not submit any payment, however, and
did not file returns for tax years 1991 to 1997. Further
investigation revealed that Collins had prepared income-
tax returns for 2003 and 2004 in connection with a credit-
union loan application. He never filed these returns,
however; they were apparently created as fictitious
support for the loan application.
   Collins was indicted on nine counts: three counts of
tax evasion in violation of 26 U.S.C. § 7201 (for tax years
2003, 2004, and 2005); three counts of willful failure to
file tax returns in violation of 26 U.S.C. § 7203 (for the
same years); one count of bank fraud in violation of
18 U.S.C. 1344 (for using fraudulent tax returns in con-
nection with the loan application); and two counts of
voter fraud in violation of 42 U.S.C. § 1973i(c) (for pro-
viding false residence information to establish eligibility
to vote in federal elections in 2006 and 2008). The case
was tried to a jury, and Collins was convicted on eight
of the nine counts; the jury acquitted him on the bank-
fraud count.
   At sentencing the district judge heard testimony
from IRS Special Agent Bradley Roessler about the
amount of the tax loss. The evidence at trial had estab-
lished that Collins commingled his personal and busi-
ness accounts and did not keep traditional business books
or financial records, so calculating a precise tax-loss figure
6                                              No. 11-1954

was impossible. Using the lowest measure of tax
loss specified in the guidelines—20% of gross income,
see U.S.S.G. § 2T1.1(c)(2)—and conservatively estimating
Collins’s income during the relevant time period,
Roessler placed the tax loss at approximately $400,000,
see U.S.S.G. § 2T4.1. Collins retained an expert, Nancy
Noonan, to attempt to reconstruct his tax liability. She
testified as well, but on cross-examination admitted
that her analysis was based on incomplete and in
many cases inaccurate information provided by Collins.
The district court credited Roessler’s estimate of the
amount of the tax loss and rejected Noonan’s. This
resulted in an offense level of 20, which, when com-
bined with Collins’s criminal history category of
III, yielded an advisory guidelines range of 41 to
51 months’ imprisonment. The judge imposed a sen-
tence of 50 months on each count, to run concurrently.
This appeal followed.

                      II. Discussion
  Collins raises several issues on appeal. First, he argues
that the district court erred in denying his request for
a supplemental jury instruction explaining that a mere
negligent failure to file tax returns could not satisfy
the element of “willfulness” on the tax-evasion counts.
Second, he maintains that the evidence was insufficient
to convict him of tax evasion. Third, he claims he was
entitled to a judgment of acquittal on the voter-fraud
counts because the evidence did not establish his ineligi-
bility to vote from the East St. Louis address under Illi-
No. 11-1954                                                7

nois’s definition of voter residency. Finally, he argues
the district court miscalculated the tax loss for purposes
of sentencing by using the government’s calculation
instead of his expert’s.

A. Tax-Evasion Jury Instruction
  Collins asked for a special jury instruction on the
“willfulness” element of the tax-evasion offense, but
the district court denied his request. We review this
decision for abuse of discretion. United States v. Tanner,
628 F.3d 890, 904 (7th Cir. 2010). Under this deferential
standard, we will “ ‘reverse only if the jury instructions,
viewed as a whole, misguide[d] the jury to the litigant’s
prejudice.’ ” United States v. Smith, 223 F.3d 554, 566 (7th
Cir. 2000) (quoting United States v. Rodriguez-Andrade,
62 F.3d 948, 953 (7th Cir. 1995)).
   A person commits the felony crime of tax evasion if
he “willfully attempts in any manner to evade or defeat
any tax.” 26 U.S.C. § 7201. The district court used
two Seventh Circuit Pattern Jury Instructions on the
element of willfulness in the tax-evasion counts. The
first instructed the jury that “the term ‘willfully’ means
the voluntary and intentional violation of a known
legal duty.” See 7 TH C IR. P ATTERN INSTRUCTION 4.09. The
second noted that a “defendant does not act willfully if
he believes in good faith that he is acting within the
law.” See id. 6.11. Collins sought a supplemental instruction
defining “willfully” as specifically excluding “negligence,
inadvertence, justifiable excuse, mistake, or a misunder-
standing of the law.”
8                                               No. 11-1954

  The district court did not abuse its discretion in
denying Collins’s request to supplement the pattern
instructions. We have previously held that a jury need
not be specifically instructed that “willful” tax evasion
requires more than a mere negligent failure to file a
return. United States v. Shavin, 320 F.2d 308, 313 (7th Cir.
1963); see United States v. McGill, 953 F.2d 10, 13 (1st Cir.
1992) (same); United States v. Colacurcio, 514 F.2d 1, 8
(9th Cir. 1975) (same). In Shavin we held that “[t]he jury
was thoroughly informed on the necessity of proof of
wil[l]ful violation with intent to defraud the Gov-
ernment of the taxes due, and this should have
eliminated a finding of guilty based upon negligence.”
320 F.2d at 313.
  That holding applies here. Collins’s jury was properly
instructed on the element of willfulness; the two pat-
tern instructions necessarily—if implicitly—excluded a
conviction based on negligent failure to file. Collins’s
proposed supplemental instruction regarding negli-
gence was redundant and therefore unnecessary. It was
also wholly unsupported by the evidence in this case.
Collins’s persistent failure to file federal and state tax
returns—spanning nearly 20 years—cannot plausibly
be attributed to mere “negligence.”
No. 11-1954                                                     9

B. Sufficiency of the Evidence on the Tax-Evasion
   Counts
  Collins also challenges the sufficiency of the evidence
on the tax-evasion counts. This is “ ‘a daunting [task
for the defendant], as the standard of review . . . is neces-
sarily rigorous.’ ” United States v. Durham, 645 F.3d 883,
892 (7th Cir. 2011) (quoting United States v. Curtis,
324 F.3d 501, 505 (7th Cir. 2003) (ellipses in original)).
We “consider[] the evidence in the light most favorable
to the Government, defer[] to the credibility determina-
tion[s] of the jury, and overturn[] a verdict only when
the record contains no evidence, regardless of how it
is weighed, from which the jury could find guilt beyond
a reasonable doubt.” United States v. Huddleston, 593
F.3d 596, 601 (7th Cir. 2010).
  To convict Collins on the tax-evasion counts, the gov-
ernment had to prove more than a willful failure to file
a tax return, which is a separate, lesser offense.1 For each
of the tax years at issue, the government had to prove
that Collins took some willful, affirmative step to “evade

1
  In this circuit, a defendant may be convicted and sentenced
for both tax evasion in violation of 26 U.S.C. § 7201 and willful
failure to file a tax return in violation of 26 U.S.C. § 7203.
See United States v. Foster, 789 F.2d 457, 459-61 (7th Cir. 1986).
Our holding in Foster is contrary to the position of eight of our
sister circuits, and we have recently suggested that it may
need to be revisited. United States v. Hassebrock, 663 F.3d 906,
916-17 (7th Cir. 2011). We do not address the issue here
because Collins did not raise it.
10                                             No. 11-1954

or defeat” his tax obligation. 26 U.S.C. § 7201; United
States v. King, 126 F.3d 987, 989 (7th Cir. 1997). Thus, to
convict Collins of tax evasion under § 7201, the govern-
ment had the burden of proving the following three
elements: “(1) a tax deficiency existed, (2) the defendant
acted willfully, and (3) the defendant took an affirma-
tive step to elude or defeat the payment of taxes.” United
States v. Hassebrock, 663 F.3d 906, 918 (7th Cir. 2011).
  Collins argues that the evidence was insufficient to
prove the second and third elements of the offense. The
government introduced evidence of four affirmative
acts Collins undertook to willfully evade his tax obliga-
tions: (1) he used a phantom Employer Identification
Number; (2) he misappropriated the Social Security
Number of his deceased business partner; (3) he refused
to give an Employer Identification Number to a construc-
tion contractor in an effort to frustrate the contractor’s
IRS reporting requirement; and (4) he commingled
his personal and business funds to avoid paying taxes.
  More particularly, senior IRS criminal investigator
Richard Dutzel testified that in contracts with a private
builder and the East St. Louis Housing Authority,
Collins used an Employer Identification Number that
did not exist in any IRS database. In several other
contracts with the City, he used the Social Security
Number belonging to John Rose, his deceased business
partner. Collins argued, implausibly, that a city bureau-
crat mistakenly placed Rose’s Social Security Number
on the City’s forms, supposedly confusing Collins with
his former associate. The jury was entitled to reject this
fanciful explanation, especially in light of an item of
No. 11-1954                                               11

evidence found in Collins’s Swansea home: When IRS
agents executed a search warrant at the home, they re-
covered a handwritten note containing Rose’s name,
birth date, and Social Security Number.
  A third affirmative act of tax evasion related to Collins’s
demolition and excavation work on a subcontract with
John Carlyle, of Carlyle Construction Management, in
connection with a project known as the Mary Brown
Center in East St. Louis. Carlyle testified that he asked
Collins eight or ten times for his Employer Identification
Number for tax-reporting purposes on the subcontract,
but Collins never provided it. The jury was entitled to
infer from this evidence that Collins was intentionally
evading his tax obligations for the work he performed
on the Mary Brown Center project.
  Finally, Special Agent Roessler testified that based
on his review of subpoenaed bank records, Collins’s
personal and business accounts were commingled. He
explained that Collins wrote an unusually large number
of checks to himself—amounting to over $300,000 in
three years. Based on Agent Roessler’s testimony, a
reasonable jury could infer that Collins cashed out sig-
nificant funds to elude payment of taxes. The evidence
is more than sufficient to sustain the tax-evasion con-
victions.

C. Voter-Fraud Counts
  The Voting Rights Act of 1965 makes it a crime for a
person to “knowingly or willfully give[] false informa-
12                                                  No. 11-1954

tion as to his name, address or period of residence in
the voting district for the purpose of establishing his
eligibility to register or vote.” 42 U.S.C. § 1973i(c). In the
March 2006 Illinois primary election when several
federal offices were on the ballot, Collins voted in East
St. Louis, claiming residency in Precinct 26 and using the
22 Loisel Drive address. He did the same for the
February 2008 primary election. He also used that
address to establish residency for his election and re-
election to the office of Democratic precinct committee-
man in 2002, 2004, 2006, and 2008.
  Residency for voting purposes is generally determined
by reference to state law. Though the federal constitu-
tion and laws govern certain important aspects of the
franchise, the states generally retain the power to reg-
ulate the exercise of the franchise. See, e.g., U.S. C ONST.
art. 1, § 2, cl. 2; U.S. C ONST. art. 2, § 1; U.S. C ONST. amend.
XVII, ¶ 1. Thus, although this case concerns a federal
crime, Illinois law governs the issue of residency for
purposes of voter registration and eligibility to vote. See
United States v. Cianciulli, 482 F. Supp. 585, 619-23 (E.D.
Pa. 1979) (analyzing residential eligibility for § 1973i(c)
using Pennsylvania state election law).
  Under Illinois law “[t]wo elements are necessary
to create a ‘residence’ for voter registration purposes:
physical presence and an intent to remain there as a
permanent resident.” People ex rel. Madigan v. Baumgartner,
823 N.E.2d 1144, 1150 (Ill. App. Ct. 2005). “Residence is
lost upon abandonment; however, ‘an absence for
months, or even years, if all the while intended as a
No. 11-1954                                             13

mere temporary absence for some temporary purpose,
to be followed by a resumption of the former residence,
will not be an abandonment.’ ” Id. (quoting Stein v. Cnty.
Bd. of Sch. Trs., 240 N.E.2d 668, 669 (Ill. 1968)).
  Prior to 2002 Collins resided at the home on Loisel Drive
and lawfully voted based on that address. In 2002, how-
ever, he moved to a rented home in Belleville, a suburb
of East St. Louis, and the following year purchased a
newly constructed home in Swansea and moved his
family and all his belongings there. As such, there is
no question about his “physical presence” for voter-
residency purposes: It was in Swansea at the 4382
Redfield Drive residence. The only possible issue for the
jury was his intent to remain there as a permanent resi-
dent. On this, and the related issue of his abandon-
ment of the Loisel Drive address, the evidence is over-
whelming and amply supports the jury’s verdict on the
voter-fraud counts.
   The house on Loisel Drive belonged to Collins’s
sister, and at the time federal agents inspected it in
March 2005, Collins’s nephew was its only apparent
occupant. None of Collins’s belongings remained in
the home. The room the nephew identified as Collins’s
bedroom was barren: It contained no furniture, pictures,
or personal effects to suggest that anyone lived in it.
There w as only a portable toilet, a walker,
and a single item of clothing in the closet. The home
itself was in serious disrepair and lacked basic mainte-
nance; federal agents discovered the electric meter and
air-conditioning compressor were missing and several
14                                           No. 11-1954

windows were broken. All this points conclusively
toward abandonment.
  On Collins’s intent to establish the Swansea home
as his permanent residence, all the evidence likewise
supports the jury’s verdict. When Collins moved
into the new home on Redfield Drive, he enrolled his
daughter in the local public school district. He listed
the Swansea home as his primary residence on numer-
ous official documents, including his daughter’s school-
residency form; his first and second mortgages;
his auto loans, insurance, and registration forms;
and his property-tax documents. When he filed an in-
surance claim for the theft of one of his vehicles, he
told the adjuster that the Swansea home was his
primary residence and the place where all his vehicles
were garaged.
   Collins’s challenge to the voter-fraud convictions is
based on the Illinois Supreme Court’s decision in Maksym
v. Board of Election Commissioners, 950 N.E.2d 1051 (Ill.
2011), which was issued after his trial. He argues that
Maksym announced a new test for residency under
Illinois election law. It did not. Maksym synthesized a
settled line of Illinois precedent and reiterated the
State’s long-standing basic requirements for voting resi-
dency: “(1) physical presence, and (2) an intent to
remain in that place as a permanent home.” Id. at 1064.
The Illinois Supreme Court also explained the principle
of abandonment as applied to the question of residency
for voting purposes, but the court went out of its way
to emphasize that “the governing law on this question
No. 11-1954                                                   15

ha[s] been settled in this State for going on 150 years.” Id.
at 1057. Nothing in Maksym undermines the factual or
legal basis for Collins’s voter-fraud convictions. The
jury was properly instructed on this crime,2 and the
evidence amply supports the guilty verdict on these
counts.

D. Tax-Loss Calculation
  Collins also challenges the district court’s tax-loss
calculation for purposes of determining his guidelines
sentencing range. The government had the burden of
proving tax loss by a preponderance of the evidence.
United States v. Schroeder, 536 F.3d 746, 752 (7th Cir. 2008).
“We review the findings of fact that underlie the dis-
trict court’s determination of taxable income for clear
error.” United States v. Whitson, 125 F.3d 1071, 1074 (7th
Cir. 1997) (citing United States v. Bhagavan, 116 F.3d 189,
191 (7th Cir. 1997)). As in other circumstances, we gen-
erally defer to a district court’s assessment of a witness’s
credibility. Id. (noting the district court’s “clearly articu-
lated credibility determination” regarding a key sen-
tencing witness).

2
  Collins asserts that the district court erred in rejecting his
proposed jury instruction on the issue of residency for
voting purposes under Illinois law. His argument on this
point consists of a single sentence and thus is too undeveloped
to warrant further consideration. See United States v. Diekemper,
604 F.3d 345, 355-56 (7th Cir. 2010).
16                                             No. 11-1954

  The presentence report recommended that the court
calculate the tax loss by reference to the lowest measure
specified in the applicable guideline: 20% of gross income.
See U.S.S.G. § 2T1.1(c)(2) (2010). Special Agent Roessler
testified at sentencing that the true marginal tax rate
would have been much higher, so using the 20% rate was
actually the most favorable measure to Collins. Agent
Roessler testified that Collins did not keep traditional
business books, his financial records were woefully
incomplete, and his personal and business bank ac-
counts were commingled, making a precise determina-
tion of income impossible. Only a rough estimate of Col-
lins’s gross income and resulting tax loss could be
made. Based on a conservative estimate of gross income,
Agent Roessler concluded that the tax loss was approxi-
mately $400,000. The guidelines specifically approve
of this kind of rough estimate where, as here, the
defendant did not file a tax return for many years and
his financial records are inaccurate or incomplete. See id.
§ 2T1.1 cmt. n.1 (“In some instances, such as when
indirect methods of proof are used, the amount of the
tax loss may be uncertain; the guidelines contemplate
that the court will simply make a reasonable estimate
based on the available facts.”). The district court
accepted Agent Roessler’s conclusion, which resulted in
an offense level of 20. See id. § 2T1.4.
  Collins contends that the court should have rejected
Agent Roessler’s estimate and accepted the analysis of
his expert instead. This argument is a nonstarter.
Collins’s expert admitted that her attempt to recon-
No. 11-1954                                               17

struct Collins’s tax liability was necessarily dependent
on the accuracy and truthfulness of the financial infor-
mation he provided. She also admitted that her analysis
was incomplete in many respects. Here, as in Whitson, the
district judge made a clear credibility determination
regarding the testimony of the two experts, accepting
the estimate of the government’s expert and rejecting the
defense expert’s testimony. Cf. Whitson, 125 F.3d at
1074. In particular, the judge was skeptical of Collins’s
expert’s testimony to the extent that it was based on
information from Collins himself, who had “deliberately[]
and intentionally lied under oath to the jury and to the
[c]ourt about matters that were crucial to his guilt or
innocence.” We defer to the district court’s credibility
determinations.
  In this regard, this case closely resembles United States
v. Valenti, 121 F.3d 327 (7th Cir. 1997). There too a de-
fendant convicted of tax evasion argued that the 20%
calculation for tax loss should be set aside and his own,
supposedly more precise calculation should be used. The
district court found that the defendant’s itemization of
expenses and the other testimony he offered in support of
his alternative tax-loss calculation was “speculative and
incredible,” and adopted the government’s calculation
instead. Id. at 334. We held that “the district court was in
the best position to judge [the defendant’s] credibility” and
affirmed the judge’s tax-loss finding “because a
fact-finder’s choice between two permissible options
cannot be clearly erroneous.” Id. The same is true here. The
18                                               No. 11-1954

district court’s tax-loss finding was not clear error.3
                                                  A FFIRMED.

3
   In his opening brief, Collins also argued that the 50-month
sentence exceeded the advisory guidelines range applicable
to the voter-fraud counts. The basis for this argument is
unclear. In his reply brief, Collins leaves the argument unex-
plained but concedes that any error in the sentence on these
counts would be harmless if the sentence on the other counts
is affirmed.

                            7-6-12