Court Opinion

ID: 3186370
Source: CourtListenerOpinion
Date Created: 2016-03-17 15:05:52.731591+00
Date Added: 2024-06-11T12:19:15.003661
License: Public Domain

United States Court of Appeals
                              For the Eighth Circuit
                          ___________________________

                                  No. 14-3517
                          ___________________________

                              United States of America

                         lllllllllllllllllllll Plaintiff - Appellee

                                            v.

                                 Veronica J. Fairchild

                        lllllllllllllllllllll Defendant - Appellant
                                        ____________

                      Appeal from United States District Court
                    for the District of South Dakota - Sioux Falls
                                     ____________

                             Submitted: October 23, 2015
                                Filed: March 17, 2016
                                    ____________

Before RILEY, Chief Judge, SMITH and SHEPHERD, Circuit Judges.
                              ____________

SMITH, Circuit Judge.

      A jury found Veronica J. Fairchild guilty on four counts of making and
subscribing a false tax return, in violation of 26 U.S.C. § 7206(1). The district court1
sentenced Fairchild to 33 months' imprisonment. On appeal, Fairchild argues that (1)

      1
       The Honorable Karen E. Schreier, United States District Judge for the District
of South Dakota.
insufficient evidence supports the jury's finding that Fairchild knowingly and willfully
underreported her income; (2) the district court abused its discretion in failing to
instruct the jury that it was required to unanimously agree on which source of income
that Fairchild failed to report on her income tax return; and (3) the district court
improperly calculated Fairchild's Guidelines range and imposed a substantively
unreasonable sentence. We affirm.

                                   I. Background
      "We present the facts in a light most favorable to the verdicts, drawing all
reasonable inferences from the evidence that support the jury's verdicts." United States
v. Ramon-Rodriguez, 492 F.3d 930, 934 (8th Cir. 2007) (citation omitted).

       In 2009, Internal Revenue Service (IRS) Special Agent Daniel Wright opened
an investigation on Fairchild and her husband. Agent Wright discovered that Fairchild
and her husband had not filed income tax returns since 2004. Agent Wright obtained
records from Fairchild's two primary bank accounts dating back to January 1, 2005.
These bank records showed that a number of large cashier's checks had been deposited
into her accounts. Specifically, there were 37 deposits of checks from David Karlen
totaling $1,103,647.84. Fairchild's accounts reflected another six checks totaling
$50,000 from Paul Pietz deposited into two main accounts in 2008. The bank records
also showed $210,348.39 in total cash deposits from 2005 to 2008.

      In July 2010, Fairchild and her husband filed joint income tax returns for 2005,
2006, 2007, and 2008, apparently unaware of the ongoing IRS investigation. Fairchild,
a professional adult entertainer, reported income in each of the respective years as
$122,345; $120,000; $120,000; and $151,325. The total income reported of $513,670
was far less than the $1,153,647.84 that Fairchild received from Karlen and Pietz
during that same time span. Additionally, the returns did not identify any of Fairchild's
cash deposits during those years as income.

                                          -2-
       Agent Wright interviewed Fairchild about her tax returns on July 13, 2011.
During that interview, Fairchild explained "that she actually thought all of the money,
that every single cashier's check she received from Mr. Karlen was a gift, but that she
had reported some of it to take some of the tax burden off of him." To determine how
much income to claim, Fairchild told Agent Wright that she "ballparked" the amount.
In the same interview, Fairchild also claimed that the money from Pietz was a gift and
that he had told her that he reported the gift on his income tax return. Even though
$30,000 of the money from Pietz was included as income on her 2008 income tax
return, Fairchild maintained that it was really a gift that her accountant had mistakenly
included as income.

      At trial, Fairchild explained that in addition to the money that she earned
dancing on stage, she also made money off stage in private rooms at the exotic
dancing clubs or off the premises. Fairchild testified that she gave private dances to
both Karlen and Pietz and maintained that these private dances never included sex.

        Fairchild also testified that Karlen "knew everything about me financially."
According to Fairchild, she asked Karlen for money for constructing her home, paying
bills, getting breast implants, and paying college tuition, and Karlen would provide
the funds. She considered it all a gift. Fairchild testified that she thanked Karlen for
the money that he "gifted" her by giving him free private dances.

       Fairchild admitted that she did not file income tax returns for 2005 through
2008 until 2010, but she claimed that the delay was due to problems that she
experienced during the construction of her new home. She claimed that when she met
with her accountant in 2010 to prepare her tax returns, she decided to claim some of
the gifts from Karlen as income to benefit him, so that he did not have to pay the taxes
on all of it. To determine her income over the four years, she "decided that any time
[she] spent with David [Karlen], anything that could be construed as income or
considered a gray area at a thousand dollars an hour." She testified that she spent an

                                          -3-
average of two times per month with Karlen over the 48-month period, and she
estimated that she spent approximately four or five hours with Karlen during each
"session." She stated that she also included going out to eat with Karlen as part of the
billable time. Fairchild calculated that she had earned "about $120,000 a year" for
each of the four years for services that she provided to Karlen. She testified that, at the
time that she filed the tax returns, she believed that the money in excess of what she
reported as income was "[g]ifts." But Fairchild admitted that "Karlen never used the
word 'gift' with [her]."

        According to Karlen, he met Fairchild in 2003 or 2004 while she was dancing.
He tipped her money when she danced on stage and paid for private dances inside the
club in a private room. Fairchild gave her phone number to Karlen and would call him
to tell him when and where she would be dancing. In 2005, Karlen went to watch
Fairchild dance at a club; while there, Fairchild asked Karlen if he was interested in
paying for sex with her outside of the club. Karlen testified concerning the first time
that he met with Fairchild for a "private meeting outside the club." He stated that it
occurred in Sioux Falls and that "it was just oral sex for . . . a thousand dollars." When
asked if they had "more meetings after that," Karlen answered that they "probably did
two, three, four of those." Karlen then confirmed that he later met Fairchild at a hotel
for intercourse and paid her $5,000 in "[c]ash." He testified that Fairchild charged him
the same price for future similar encounters.

      Prior to April 2005, Karlen paid Fairchild in cash. But around this time he
began writing checks to Fairchild. Karlen explained that Fairchild would always ask
him for a certain amount. For example, Karlen wrote a check in the amount of $39,000
on April 11, 2005, to Fairchild for sex. After Karlen started paying with checks, that
is how he continued to pay Fairchild. Between 2005 and 2008, Karlen paid Fairchild
$1,103,647.84 with 37 checks. When asked how he "treat[ed] the money that [he]
gave to [Fairchild]," Karlen replied, "[f]or her service. . . . For sex." When asked
whether the 37 payments were all for sexual services, Karlen replied, "[e]very one of

                                           -4-
those." He later confirmed that "[t]he whole $1.1 million was for sex" and that
"[e]verything was for sex."

       According to Pietz, he first paid Fairchild $5,000 for a private dance at his
home in February 2008. Pietz testified that Fairchild sometimes charged him $10,000
for a private show. In total, Pietz made six payments to Fairchild totaling $50,000.
Pietz confirmed that he never paid Fairchild "money for anything other than a private
dance."

       Fairchild retained Certified Public Accountant Derry Anderson in 2005 because
Fairchild and her husband were opening a clothing store business and wanted advice
on the type of corporation to create. Additionally, they hired Anderson to provide
payroll services and to prepare their 2005 income tax returns. In May 2006, after filing
requests with the IRS to file the income tax returns late, Anderson met with Fairchild
to determine her income. Because Fairchild had no other documentation of her
income, she reviewed her bank statements with Anderson to determine which deposits
were income. Anderson testified, "I went through and had Veronica [Fairchild] read
off the deposits to me, and I ran a tape on my calculator of the number of deposits that
she would tell me. That's what we used as the total income for the 2005 Schedule C."
Through that process, they calculated Fairchild's gross income from cash received in
2005 to be $308,727.69. After receiving additional information related to deductions
from Fairchild in late October 2006, Anderson completed the 2005 tax return in
December 2006. Anderson met with Fairchild and her husband on December 15,
2006, to review the completed return. Based on the information that Fairchild reported
to Anderson, he determined that her gross income as a professional adult entertainer
for 2005 was $311,073. As a result, Fairchild and her husband owed $56,217 in taxes,
before penalties and interest.

      Anderson had also prepared the income tax return for Fairchild's clothing
business and provided it to her. That return indicated a business loss with no tax

                                          -5-
liability. Anderson testified that he reviewed the tax returns with Fairchild and her
husband and that "there was [sic] no issues on the gross income." He advised them to
mail the returns to the IRS. Although Fairchild and her husband did mail the tax return
for the business, they did not mail their personal income tax return. Instead, once
Fairchild and her husband departed Anderson's office that day knowing that they owed
$56,217 in taxes, they went to the Sioux Falls Federal Credit Union and borrowed
over $100,000 to buy two Cadillac Escalades and a boat.

       Before Fairchild and her husband left Anderson's office, they told him that
Fairchild's income was expected to be higher in 2006. Based on information that
Fairchild provided, Anderson began to prepare the income tax return for 2006. As he
did for the 2005 return, Anderson reviewed deposits in Fairchild's bank accounts in
2006 and determined that her gross income was $517,081. Anderson prepared a
"working draft for the 2006 return," and he provided Fairchild and her husband with
a copy of it.

       But Anderson did not prepare a 2006 income tax return for Fairchild until 2010.
Fairchild and her husband met with Anderson in March 2010 to complete the income
tax returns for 2006, 2007, and 2008. According to Fairchild, Anderson and her
husband needed to complete their tax returns to obtain financing for a real estate
purchase in Lake Okoboji, Iowa. Prior to that time, Fairchild had not provided
Anderson with enough information to complete the returns. At the March 2010
meeting, Fairchild disclosed to Anderson that she had not filed the 2005 income tax
return that Anderson had previously prepared.

       Also during the March meeting, Fairchild told Anderson for "the first time" that
"she actually received a gift" from Karlen. Thus, the filed 2005 tax return accounted
for this "change in income" and resulted in Fairchild actually requesting a refund of
$1,979. Anderson admitted that Fairchild going from owing $56,217 on the 2005
return prepared in 2006 to requesting a refund on the filed 2005 return was "quite a

                                         -6-
change." Likewise, the taxes owed on the 2006 "working draft" went from $117,114
to $4,922.

       Between 2006 and 2008, Fairchild completed and signed several loan
applications with financial institutions. In January 2006, she signed and submitted an
application to Keystone Mortgage declaring her income to be $24,800 per month. In
December 2006, when she borrowed money from the Sioux Falls Bell Federal Credit
Union to purchase the boat and vehicles, she stated that her income was $17,647 per
month. In March 2007, on a loan application for a Mercedes Benz, she stated that her
annual income was $274,881. To support the loan application, Fairchild's husband
directed Anderson to send a copy of the unfiled 2005 income tax return that had been
prepared in December 2006.

       Fairchild also relied on the 2006 "working draft" income tax return to support
her income level when she applied for a loan with Sioux Falls Federal Credit Union
in 2007. At Fairchild's request, Anderson provided a copy of the 2006 "working draft"
to Sioux Falls Federal Credit Union to verify her income to obtain a loan. In June
2007, when completing a mortgage application with Wells Fargo Bank, she claimed
that her monthly income was $37,612. In July 2007, when applying for a loan to
purchase a new Corvette, Fairchild stated that her gross annual income was $383,319.
The same annual income was reported in 2008 when Fairchild applied for a $30,000
loan to purchase a completely restored 1970 Pontiac GTO.

       In September 2008, Fairchild asked Anderson to fax information about her 2007
income for a loan application with the Air Guard Federal Credit Union. Anderson sent
a fax that stated, "[t]he Schedule C gross income will be close to the 2006 gross
income, around $300,000 based on the information provided by Veronica [Fairchild]."

     Fairchild was charged with four counts of making and subscribing a false
income tax return for tax years 2005 through 2008, in violation of 26 U.S.C.

                                         -7-
§ 7206(1). A jury trial commenced. After the close of the government's case, Fairchild
moved for judgment of acquittal under Federal Rule of Criminal Procedure 29. The
district court denied the motion.The jury convicted Fairchild on all four counts. The
district court sentenced Fairchild to 33 months' imprisonment on each count to run
concurrently.

                                      II. Discussion
        On appeal, Fairchild argues that (1) insufficient evidence exists to support the
jury's finding that Fairchild knowingly and willfully underreported her income; (2) the
district court abused its discretion in failing to instruct the jury that it was required to
unanimously agree on which source of income that Fairchild failed to report on her
income tax return; and (3) the district court improperly calculated Fairchild's
Guidelines range and imposed a substantively unreasonable sentence.

                            A. Sufficiency of the Evidence
       Fairchild argues that the evidence is insufficient to sustain her convictions for
making and subscribing a false income tax return for tax years 2005 through 2008, in
violation of 26 U.S.C. § 7206(1), because no reasonable jury could conclude that she
falsely reported her income or tax liability. She further asserts that even if her
declaration of income and tax liability were "false," no reasonable jury could find that
she believed that she was understating her income or that she willfully and
intentionally did so.

       "Our standard of review on this issue is quite narrow." United States v. Smith,
104 F.3d 145, 147 (8th Cir. 1997) (citation omitted). When reviewing a district court's
denial of a motion of judgment of acquittal based on sufficiency of the evidence, we
view the evidence in the light most favorable to the jury's verdict. Id. The government
gets "the benefit of all the reasonable inferences that could logically be drawn from
the evidence." Id. (citation omitted). "We must uphold the verdict if the evidence so
viewed is such that there is an interpretation of the evidence that would allow a

                                            -8-
reasonable-minded jury to find the defendant guilty beyond a reasonable doubt." Id.
(quotation and citation omitted).

       Fairchild was convicted of violating 26 U.S.C. § 7206(1), which prohibits
"[w]illfully mak[ing] and subscrib[ing] any return . . . , which contains or is verified
by a written declaration that it is made under the penalties of perjury, and which he
does not believe to be true and correct as to every material matter." To prove a
violation of § 7206(1), the government must put forth evidence "that the document in
question was false as to a material matter, that the defendant did not believe the
document to be true and correct as to every material matter, and that he acted willfully
with the specific intent to violate the law." Kawashima v. Holder, 132 S. Ct. 1166,
1172 (2012) (citations omitted). "In general, a false statement [under § 7206(1)] is
material if it has 'a natural tendency to influence, or [is] capable of influencing, the
decision of the decisionmaking body to which it was addressed.'" Neder v. United
States, 527 U.S. 1, 16 (1999) (second alteration in original) (quoting United States v.
Gaudin, 515 U.S. 506, 509 (1995)).

                                      1. Falsity
       Fairchild argues that the evidence was insufficient to show that her declaration
of her income and tax liability for 2005, 2006, 2007, and 2008 was "false."

       According to Fairchild, the amounts that she declared were consistent not only
with her estimation of the overall cost for services that she provided to Karlen and
Pietz but also with Karlen's and Pietz's estimations. Fairchild estimated spending
about five hours with Karlen twice a month from 2005 to 2008, which totals 120 hours
per year. A charge of $1,000 per hour for the 120 hours totals $120,000. Fairchild
contends that she declared this amount as income on her tax return for each year and
notes that she was not required to declare or pay tax on money received as a gift.
Fairchild maintains that Karlen's estimation was actually $60,000 lower than the
amount that she actually declared of $480,000. She cites Karlen's testimony that he

                                          -9-
paid her for sex a couple of times a month for a three-and-a-half-year period at a rate
of $5,000 for each time that they had sex. At trial, Karlen agreed that multiplying
$10,000 (for the two sexual encounters per month) by 42 months yielded $420,000 for
the entire period. Fairchild points out that she declared a total of $480,000 for the four
years in question, which is $60,000 more than the $420,000 estimation.

       Fairchild acknowledges Karlen's claim that the entire $1.1 million that he gave
to Fairchild over this period was payment for sex but nonetheless argues that a "step-
by-step calculation of the number of times Karlen said he and Fairchild got together
multiplied by $5,000, the rate Karlen maintained at trial, yields a grand total much
lower than the $1.1 million he gave Fairchild."

       Fairchild also argues that her declaration of income attributable to Pietz was
consistent with Pietz's estimation of how much he paid for private parties. She
estimated that $25,000 to $30,000 of the money that she received from Pietz
constituted income and declared the higher amount as income on her 2008 return,
while he testified to paying $5,000 or $10,000 per private party and to giving a total
of $50,000 in checks to Fairchild, not all of which were for private dances. Fairchild
concludes that her declaration of $30,000 in income attributable to Pietz was
consistent with the amount that Pietz said that he paid for private parties.

       We hold that sufficient evidence exists to support the jury's finding that
Fairchild made "false" declarations on her tax returns. See Kawashima, 132 S. Ct. at
1172. First, as Fairchild concedes, Karlen did testify that the entire $1.1 million that
he gave to Fairchild was for the payment of sex. Karlen's testimony conflicting with
that representation does not mean that the jury could not have credited his
representation that the entire $1.1 million that he gave to Fairchild was for payment
of sex. "When reviewing a verdict, we do not question credibility determinations made
by the jury. A jury is free to believe or reject a witness's testimony in part or in
whole." United States v. Close, 518 F.3d 617, 620 (8th Cir. 2008) (citations omitted);

                                          -10-
see also Stevenson v. Union Pac. R.R. Co., 354 F.3d 739, 745 (8th Cir. 2004) ("The
jury may use common sense in evaluating witness testimony and may disregard all or
part of any witness's testimony . . . ."). "The jury is free also to accept one or more
witnesses'[] testimony only in part and thereby to create its own version of the facts."
United States v. Felix, 996 F.2d 203, 207 (8th Cir. 1993) (citation omitted).

       Second, the jury could infer from the evidence that Fairchild declared all of the
money that she received from Karlen and Pietz on the loan documents that she
submitted to obtain loans from financial institutions. As explained supra, between
2006 through 2008, Fairchild completed and signed several loan applications with
financial institutions in which she had to declare her income. These nine loan
applications to four financial institutions declared that Fairchild's annual income
ranged from $211,764 to $451,344. In support of some of the loan applications,
Fairchild and her husband had Anderson send to lenders a copy of the 2005 income
tax return that had been prepared but not filed. They also had Anderson send lenders
a copy of the 2006 "working draft" income tax return, as well as a fax stating that
"[t]he Schedule C gross income will be close to the 2006 gross income, around
$300,000 based on the information provided by Veronica [Fairchild]."

       Third, the jury could conclude that the information that Fairchild gave to
Anderson, her accountant, demonstrated the falsity of her tax returns. The evidence
shows that Fairchild initially treated all of the money that she received from Karlen
as income. In 2006, Fairchild told Anderson that her income for 2005 was $311,073
and that her income was going to increase. As a result, Anderson determined
Fairchild's income for 2006 to be $517,081 and provided a working draft, which
Fairchild later used to apply for a loan. It was not until March 2010 when Fairchild
and her husband met with Anderson that Fairchild first stated that not all of the money
that she had received from Karlen or Pietz was income. Fairchild presented a new
explanation that her income was $120,000 per year and anything that she received

                                         -11-
beyond that was a gift. But, at trial, both Karlen and Pietz testified that any money that
they paid her was for services.

                               2. Belief and Willfulness
       Fairchild argues that even if her statement of income was inaccurate, the
evidence was insufficient to show that she knew and believed that she had
underreported her income. According to Fairchild, the nature of the money that she
received from Karlen and Pietz was "unclear." She notes that she, Karlen, and Pietz
all gave different accounts of the nature of the money over time and that her
accountant did not know how to categorize the money for tax purposes. She asserts
that she "liberally" estimated the money received from Karlen and Pietz as payment
for private parties. She cites her testimony at trial that she "truly believed that she
accurately declared income from these private clients and that the remainder of the
money was gifted to her." She concludes that because of the "widespread confusion
over the nature of the money, no rational juror could have found that [she] believed
that the declaration of her income was false." Fairchild also argues that the evidence
was insufficient to show that she willfully made and subscribed false tax returns. She
asserts that she sincerely held this belief and that she did not willfully violate the tax
laws because she had a good-faith belief that the money that she received from Karlen
and Pietz above and beyond the amount that she declared as income was a gift.

       "Filing false tax returns is a specific intent crime requiring a showing of
willfulness, which 'simply means a voluntary, intentional violation of a known legal
duty.'" United States v. Mathews, 761 F.3d 891, 893 (8th Cir. 2014) (quoting Cheek
v. United States, 498 U.S. 192, 201 (1991)). "Intent may be inferred from conduct, and
[w]illfulness in a criminal tax case may be established by a consistent pattern of not
reporting income or inconsistently reporting income." Id. at 893 (alteration in original)
(quotations and citations omitted). Furthermore, the factfinder may infer from the facts
of the case whether an act was committed willfully. Id. at 894.

                                          -12-
       Fairchild contends that the government failed to prove that her conduct was
willful because there was evidence of her good-faith belief that she was not violating
the tax laws. "'The issue is whether, based on all the evidence, the [g]overnment has
proved that [Fairchild] was aware of the duty at issue, which cannot be true if the jury
credits a good-faith misunderstanding and belief submission, whether or not the
claimed belief or misunderstanding is objectively reasonable.'" United States v. Morse,
613 F.3d 787, 794 (8th Cir. 2010) (first alteration in original) (quoting Cheek, 498
U.S. at 202). The government frequently must prove intent "by circumstantial
evidence; the determination often depends on the credibility of witnesses, as assessed
by the factfinder." United States v. Morris, 723 F.3d 934, 939 (8th Cir. 2013)
(quotation and citation omitted). "The jury may infer intent from the Appellants'
conduct, such as inconsistencies between Appellants' representations to government
agencies and other entities." Id. (citation omitted). Because "knowledge . . . turns in
large part on the credibility of the witnesses," it "is peculiarly within the province of
the factfinder." Id. (quotation and citation omitted). For that reason, a jury is "free to
disregard [a defendant's] statements as not credible" in evaluating whether the
defendant had a "'good[-]faith belief' that he was properly preparing his tax returns."
Mathews, 761 F.3d at 894.

       We hold that sufficient evidence exists to support the jury's finding that
Fairchild knew and believed that she had underreported her income and that she
willfully did so. At trial, Fairchild testified that she truly believed that she accurately
declared income from Karlen and Pietz and that the remainder of the money was a gift
to her. But, "the jury was free to disregard [Fairchild's] statements as not credible."
See Mathews, 761 F.3d at 894.

                                 B. Jury Instructions
       The indictment alleged that Fairchild willfully made and subscribed a false
Form 1040 for each year in question, which "understated the amount of total income
she received as a professional adult entertainer, as well as the tax liability owed." The

                                           -13-
district court proposed a jury instruction on making and subscribing a false tax return,
which read, in relevant part, with regard to the first element:

      For you to find Fairchild guilty of the offenses charged in Counts 1-4 in
      the Indictment, the prosecution must prove beyond a reasonable doubt
      all of the following five essential elements:

             One, that Fairchild made and signed an individual income tax
      return for the year in question that was false as to income or tax liability
      owed;

             The taxpayer is the one who "makes" a return even if she
             hired an accountant to prepare the return.

             For the return to be false as to income, Fairchild must have
             received taxable income that year in addition to the taxable
             income reported on her return, regardless of the amount.
             Whether the government has or has not suffered a monetary
             loss as a result of the alleged return is not an element of this
             offense.

             For the return to be false as to tax liability owed, Fairchild
             must have reported less tax liability owed than that which
             was actually owed.

             The Indictment charges that both the income and tax
             liability owed were false as stated by Fairchild in the tax
             returns in question. It is not necessary for the government
             to prove both. It would be sufficient if the government
             proves beyond a reasonable doubt that Fairchild made and
             signed an individual income tax return that was false as to
             either the income or the tax liability owed. To find the
             government has met its burden on this element, however,
             you must unanimously agree on whether the false matter
             was regarding Fairchild's income, tax liability owed, or
             both. If you are unable to unanimously agree, you cannot
             find Fairchild guilty.

                                          -14-
(Third emphasis added.) (Bold omitted.)

      Fairchild's counsel objected to the italicized paragraph and proposed the
following instruction in its place:

      The indictment charges that Fairchild understated both the income she
      earned and the tax she owed on it. You are instructed that, if she
      understated her income for any of the four years in question, she also
      understated her tax liability for that year; conversely, if she did not
      understate her income for any of the four years in question, she also did
      not understate her tax liability for that year.

      Your verdict must be unanimous as to all four counts of the indictment.
      In Count 4, there was evidence about income Fairchild received from
      two men, David Karlen and Paul Pietz. To find the government has met
      its burden on this element in Count 4, you must unanimously agree on
      whether Fairchild understated her taxable income from David Karlen,
      her taxable income from Paul Pietz, or both. If you are unable to
      unanimously agree, you cannot find Fairchild guilty on Count 4.

        Counsel's "problem" with the court's instruction was that "[t]he Government
hasn't put on any evidence of anything wrong about the returns, except for income. So
if the jury finds she lied about the income, that's ipso facto a lie about the tax
liability." According to counsel, if the jury had "reasonable doubt about whether she
lied about the income, then there's no other evidence about anything else other than
the income, and they can't find her guilty of a liability." Counsel argued that "a general
unanimity instruction would suffice for that issue" and proposed saying that "if you
find she lied about the income, you have to find she lied about the tax liability, and if
you don't find she lied about the income, then you can't find that she lied about the
liability, because that's the only issue at play." Counsel's concern was that the jury
could convict Fairchild "without all 12 of them agreeing on what the actus reus is in
this case, what wrong thing she did is in Count 4" because Count 4 involved "evidence

                                          -15-
about false reporting David Karlen and false reporting Paul Pietz." According to
counsel, a "real chance" existed that six jury members could believe that Fairchild lied
about Karlen but not Pietz, while the other six members could believe that Fairchild
lied about Pietz but not Karlen. Counsel asserted that the jury "would recognize that
that means acquittal on Counts 1 through 3 where Karlen is the only issue." But he
contended that unless the jurors were "specifically instructed about their duty to
unanimously agree to a particular set of facts [on Count 4], they could . . . say, well,
on Count 4 six of us agree she lied about Karlen. Six of us agree she lied about Pietz.
Six plus six is 12, guilty."

       The government objected to Fairchild's proposed instruction, arguing that (1)
elements instructions do not typically discuss the facts of the case, and (2) the
instruction "unnecessarily and wrongfully tries to box [the jurors] in as to how they
come to their determination of the underreporting of income, which is the falsity."

       The court commented that the issue in the case was whether Fairchild "reported
all of her income, in general," not whether "a particular false statement was made
regarding that reported income." The court then rejected Fairchild's proposed
instruction, stating:

      Well, I think the only reason the unanimity instruction is needed is
      because the Indictment charges two different ways of making a false
      statement, either by underreporting her income or by underreporting her
      tax liability. That's why the unanimity instruction is included.

             I guess I just do not agree with the fact that it's needed. I think it's,
      first of all, improper for the Court to comment on the evidence that's
      come in, that there may be different ways of proving that the reported
      income is underreported.

                                           -16-
              But I'm going to leave it based on the language of the Indictment,
      which is that she underreported her income or underreported her tax
      liability.

              I will include your Proposed Final Instruction. I'm going to mark
      it "refused," because I don't think it's necessary, and it may confuse the
      jury.

            I think the instruction, as the Court has it, accurately tells the jury
      how they need to sort out this issue. So that objection is overruled.

       On appeal, Fairchild argues that because the government presented evidence of
multiple sources of allegedly unreported income, the indictment was duplicitous, and
the district court's jury instructions failed to ensure that the jury reached a unanimous
verdict for each count. Fairchild concedes that her "duplicity argument does not rest
on the language of the indictment." But she asserts that "this is not damning to [her]
argument" because "the potential for a nonunanimous verdict arose out of the evidence
of multiple sources of unreported income for each tax year," meaning that "the jury
should have been instructed to agree on the willful falsity of 'one factually distinct
false statement.'" (Quoting United States v. Duncan, 850 F.2d 1104, 1113 (6th Cir.
1988), overruled on other grounds by Schad v. Arizona, 501 U.S. 624 (1991).) She
asserts that her proposed jury instruction "would have cured [the indictment's]
duplicity" and ensured jury unanimity.

       "We review jury instructions for abuse of discretion, and '[i]n so doing, we do
not consider portions of a jury instruction in isolation, but rather consider the
instructions as a whole to determine if they fairly and adequately reflect the law
applicable to the case.'" United States v. Pierce, 479 F.3d 546, 549 (8th Cir. 2007)
(alteration in original) (quoting United States v. Turner, 189 F.3d 712, 721 (8th Cir.
1999)).

                                          -17-
       As Fairchild admits in her brief, she is not attacking the language of the
indictment; that is, she does not argue that "the indictment is . . . duplicitous on its
face. Instead, [she argues that] the indictment was rendered duplicitous by the
evidence presented at trial." United States v. Pietrantonio, 637 F.3d 865, 871 (8th Cir.
2011) (citing United States v. D'Amico, 496 F.3d 95, 100 (1st Cir. 2007) ("[T]he fact
that an indictment is not duplicitous on its face of course does not guarantee that a jury
verdict will be unanimous, based on the evidence actually presented.")). Fairchild
maintains that the government created a duplicitous indictment by presenting three
sources of "underreported" income at trial: (1) unreported checks from Karlen and
unreported tips for dancing in clubs in 2005; (2) unreported checks from Karlen and
unreported income for dancing in clubs in 2006 and 2007; and (3) unreported checks
from Karlen, unreported checks from Pietz, and unreported tips for dancing in clubs
in 2008. Fairchild asserts that to reach a unanimous verdict, the jury needed to agree
on which income that Fairchild failed to report for each tax year.

       The present case is analogous to United States v. Adler, 623 F.2d 1287 (8th Cir.
1980). In that case, the defendant was charged with Medicare fraud for submitting
false invoices to Medicare for reimbursement. Id. at 1288. Each count of the
indictment concerned a different invoice (comparable to each count of Fairchild's
indictment concerning a different tax year). Id. at 1289. Additionally, each invoice had
multiple fraudulent line items on it (comparable to evidence of multiple sources of
Fairchild's unreported income for each year). Id. at 1290. The defendant challenged
the indictment as duplicitous because some of the counts involved invoices with more
than one fraudulent line item on them. Id. We rejected the defendant's argument,
explaining that "the government charged only one crime in each count of the
indictment. There may be more than one piece of evidence to support each count, but
that certainly does not make the counts duplicitous." Id. (citations omitted). "In other
words, each invoice was a single execution, and the line items on each invoice were
merely additional means of pursuing the single execution." United States v. Palazzo,
372 F. App'x 445, 452 (5th Cir. 2010) (per curiam) (citing Adler, 623 F.2d at 1290).

                                          -18-
Similar to Adler, each one of Fairchild's tax returns was "a single execution," and the
multiple sources of unreported income contained in each tax return constituted
"multiple means of accomplishing" Fairchild's making of a false statement as to her
income and tax liability for a particular tax year. See id.

      As the government points out, requiring the jury to decide unanimously whether
the unreported income came from Karlen, Pietz, or another source was unnecessary
because it was not an essential element of the crime; each source provided alternative
pieces of evidence to support each count of the indictment.

       Fairchild relies primarily on Duncan in arguing that because each juror could
have found a different source of unreported income for each of her tax returns, there
was a significant risk of a nonunanimous verdict on each count. See Duncan, 850 F.2d
at 1111 (concluding that an indictment alleging separate false statements for one count
of violating 26 U.S.C. § 7206 was duplicitous after finding that the "essence of the
statute lies in the willful falsity of a statement"). Duncan, however, provides no
support. Duncan involved an extremely complex count with what that court
considered "a tangible risk of jury confusion." Id. at 1114. The instant case was
neither extremely complex nor posed a tangible risk of confusion for the jury. The
district court adequately distinguished Duncan, explaining that

      the difference between this case and Duncan, if it still is good law in the
      Sixth Circuit, is that the statute here and what's charged in the Indictment
      is that the Defendant failed to report income and underreported her tax
      liability.

             So the issue that the jury is looking at is whether she reported all
      of her income, in general. It's not that a particular false statement was
      made regarding that reported income. That's not what's charged in the
      Indictment.

                                         ***

                                         -19-
      I think the only reason the unanimity instruction is needed is because the
      Indictment charges two different ways of making a false statement, either
      by underreporting her income or by underreporting her tax liability.
      That's why the unanimity instruction is included.

             I guess I just do not agree with the fact that it's needed. I think it's,
      first of all, improper for the Court to comment on the evidence that's
      come in, that there may be different ways of proving that the reported
      income is underreported.

(Emphases added.)

       Even assuming duplicity in the indictment, the district court's instruction cured
any potential prejudice created thereby. "Courts have held that the risk of a
nonunanimous verdict inherent in a duplicitous count may be cured when the jury is
given a limiting instruction that requires it to unanimously find the defendant guilty
with respect to at least one distinct act." United States v. Karam, 37 F.3d 1280, 1286
(8th Cir. 1994) (citations omitted). In the present case, the district court gave such a
limiting instruction by requiring the jury to "unanimously agree on whether the false
matter was regarding Fairchild's income, tax liability owed, or both."

       Accordingly, we hold that the district court did not abuse its discretion in
instructing the jury.

                                      C. Sentence
      Fairchild argues that her 33-month sentence is procedurally and substantively
unreasonable. First, she asserts that the district court's calculation of the Guidelines
range was based on an erroneous calculation of the tax-loss amount and an erroneous
finding that Fairchild failed to report income from criminal activity. Second, she
maintains that her 33-month sentence is substantively unreasonable for failing to
account for the effects of past sexual abuse and her status as the sole parent to three
young children.

                                           -20-
        "We review the district court's sentencing, whether inside or outside the
guidelines range, for an abuse of discretion." United States v. Straw, 616 F.3d 737,
743 (8th Cir. 2010) (citing Gall v. United States, 552 U.S. 38, 51 (2007)). Our first
task is to "ensure that the district court committed no significant procedural error, such
as failing to calculate (or improperly calculating) the Guidelines range." Gall, 552
U.S. at 51. "If no procedural error has been committed, we review the sentence for
substantive reasonableness under an abuse of discretion standard." Straw, 616 F.3d
at 743 (citing United States v. Feemster, 572 F.3d 455, 461 (8th Cir. 2009) (en banc)).
Fairchild bears the burden "to show that h[er] sentence should have been lower
considering the factors enumerated in 18 U.S.C. § 3553(a)." See id. (citing United
States v. Milk, 447 F.3d 593, 603 (8th Cir. 2006)).

                                 1. Procedural Error
        The presentence investigation report (PSR) calculated Fairchild's base offense
level to be 18 pursuant to U.S.S.G. §§ 2T1.1 (2014) and 2T4.1(G) (2014) based on a
tax-loss amount of $214,606. It assessed a two-level enhancement pursuant to
U.S.S.G. § 2T1.1(b)(1) (2014) for "fail[ing] to report or to correctly identify the
source of income exceeding $10,000 in any year from criminal activity" because
Fairchild had "engaged in sexual activity for a fee, which is a violation of state and
federal law." Based on a total offense level of 20 and a criminal history category of
I, the PSR calculated a Guidelines range of 33 to 41 months' imprisonment. Fairchild
objected to the tax-loss determination and to the two-level enhancement for failure to
report income from criminal activity.

                                       a. Tax Loss
       The district court overruled Fairchild's objection to the PSR's determination that
the tax loss exceeded $200,000 and found an actual tax-loss amount of $214,606. The
court explained:

                                          -21-
      In looking at the issue of unreported income, money received from
      services and tips should both be included.

            The Defendant's own testimony during the trial indicated that she
      received tips during the time period in question in cash. She admitted
      that was not reported as income on her income tax returns, and she stated
      that was just an oversight.

             With regard to the cash deposits, the money that she put into the
      Federal Credit Union, she testified the $35,000 in 2005 came either from
      David Karlen or from dancing. She testified that the $38,000 in 2006
      came from David Karlen and a little dancing. She testified that the
      $55,000 in cash deposited in 2007 came from David Karlen or dancing.
      She testified that the $80,000 in cash in 2008 came from David Karlen.
      "Gave her large amounts" was the testimony. She admitted that none of
      that cash was reported on her Federal income tax return.

            That testimony that she gave under oath is consistent with the
      statement that she made when she was interviewed by Agent Wright.

            The amounts in cash for those four years, for many people it's
      more than they make in one year. There's a lot of people in South Dakota
      that don't make $35,000, $38,000, $55,000, or $80,000 in a year. So
      when she testified the source of that money, I think she knew where it
      came from, because it's a sizable amount.

              It's sufficient to meet the Government's burden of proof by a
      preponderance of evidence that that cash came from either services or
      tips, and should have been included as income on her Federal income tax
      return.

        "We review de novo whether the district court correctly interpreted and applied
the sentencing guidelines, while the court's factual findings are reviewed for clear
error." United States v. Koch, 625 F.3d 470, 480 (8th Cir. 2010) (citation omitted); see
also United States v. Hart, 324 F.3d 575, 578 (8th Cir. 2003) ("We review the district
court's tax[-]loss calculation for clear error." (citation omitted)).

                                         -22-
       In the present case, the PSR calculated Fairchild's base offense level as 18 based
on a tax-loss amount of $214,606. According to the probation officer, this figure is
"based on the omitted gross receipts of $643,647.84 plus the total cash gross receipts
of $210,348.39, which came out of trial testimony, which is explained in paragraph
9 [of the PSR]." (Emphasis added.) Paragraph 9 of the PSR provides as follows:

        In late July 2010 the Fairchilds jointly filed their income tax returns
        (Forms 1040) for tax years 2005, 2006, 2007, and 2008. On each return,
        the defendant reported her earning from her adult entertainment business
        on a Schedule C. The gross receipts were $122,345; $120,000; $120,000;
        and $151,325 for tax years 2005 through 2008, respectively. Her total of
        reported gross receipts was $513,670; however, the tax returns failed to
        show the omitted amounts deposited into the defendant's bank accounts
        from Karlen and Pietz totaling $156,447.24 in 2005; $325,000 in 2006;
        $102,200.50 in 2007; and $60,000 in 2008. The total omission of income
        was $643,647.84, and the tax[-]loss amount was $149,914. Additionally,
        at trial, while under oath, the defendant stated that large amounts of cash
        deposited into her account were mostly from Karlen and a small amount
        of it was from dancing. The IRS agent indicated that because the
        defendant admitted to these cash amounts as deposits from Karlen and
        dancing while under oath, it is considered unreported income:

 Year            Reported      Total Gross      Total Cash     Omitted       Unreported
                 Gross         Receipts Per     Gross          Gross         Income
                 Receipts      Investigation    Receipts Per   Receipts
                                                Trial
                                                Testimony
 2005            $122,345.00   $278,792.34      $35,878.24     $156,447.34   $192,325.58
 2006            $120,000.00   $445,000.00      $38,258.95     $325,000.00   $363,258.95
 2007            $120,000.00   $222,200.50      $55,308.00     $102,200.50   $157,508.50
 2008            $151,325.00   $211,325.00      $80,903.20     $60,000.00    $140,903.20
 Totals          $513,670.00   $1,157,317.80    $210,348.39    $643,647.84   $853,996.23

                                             -23-
(Emphases added.) (Footnotes and bold omitted.)

      Applying § 2T1.1(c)(1)(A) based on these figures, the total tax loss would be
$239,118.94 (28 percent of $853,996.23 (total unreported income)). But the PSR
calculated a tax-loss amount of $214,606 based on "[t]he additional tax due and owing
on unreported income" for 2005 ($59,446); 2006 ($93,870); 2007 ($22,759); and 2008
($38,531).

       At sentencing, the parties agreed that Fairchild's total receipts from Karlen and
Pietz was $1,157,317.80; the only factual dispute was whether the amount of cash
deposited into Fairchild's bank accounts (total cash gross receipts) during the four-
year period should also be included as income. Based on Fairchild's testimony, the
district court concluded that all of the cash deposited into her account during the four-
year period should be included as income. The court also found that Fairchild's
testimony was consistent with the statement that she made to Agent Wright.

      We conclude that the district court's factual findings are not clearly erroneous
and that the government proved the amount of loss by a preponderance of the
evidence based on Fairchild's testimony.

                                  b. Criminal Activity
       The court overruled Fairchild's objection to the two-level enhancement pursuant
to U.S.S.G. § 2T1.1(b)(1) (2014). This section provides that "[i]f the defendant failed
to report or to correctly identify the source of income exceeding $10,000 in any year
from criminal activity, increase by 2 levels." U.S.S.G. § 2T1.1(b)(1) (2014) (bold
omitted). Fairchild argues that the district court clearly erred in assessing the
enhancement by finding that she engaged in prostitution in violation of South Dakota
law. Fairchild contends that she and Pietz testified that Fairchild did not engage in
sexual activity in exchange for money. She asserts that Karlen's claim that he paid
Fairchild for sex was directly contradicted by Fairchild and Pietz and that Karlen gave

                                          -24-
shifting accounts of the nature of his relationship with Fairchild and the nature of the
money that he provided her.

       The district court was entitled to credit Karlen's testimony and discredit
Fairchild's and Pietz's testimony as to whether Fairchild was paid for sex. See United
States v. Smith, 681 F.3d 932, 935 (8th Cir. 2012) ("[A] district court's credibility
determinations [at sentencing] are virtually unreviewable on appeal." (alterations in
original) (quotation and citation omitted)). Karlen repeatedly testified that he paid
Fairchild for sex. He testified that all of the money that he paid her was in exchange
for sex. We discern no error in the court's application of § 2T1.1(b)(1) (2014).

                           2. Substantive Reasonableness
      In addition to her objections to the PSR, Fairchild also requested a downward
variance based on her personal history and family obligations. The district court
denied Fairchild a downward variance and sentenced her to 33 months' imprisonment
on each count, to run concurrently. Fairchild argues that her 33-month sentence—a
within-Guidelines sentence—is substantively unreasonable for failing to take into
account her personal history and family situation and for being greater than necessary
under the circumstances.

       "It will be the unusual case where we reverse a district court sentence . . . as
substantively unreasonable." United States v. Woodard, 675 F.3d 1147, 1152 (8th Cir.
2012) (alteration in original) (quotation and citation omitted). "On appeal, we presume
a within-Guidelines-range sentence is reasonable." United States v. Waters, 799 F.3d
964, 974 (8th Cir. 2015) (citation omitted).

       Just as in Waters, Fairchild "argues the district court abused its discretion by not
giving enough weight to supposed mitigating factors . . . . We disagree. With respect
to mitigating factors, the district court considered both written and oral arguments
presented by the defendant." See id. at 975. The court explicitly stated, "In deciding

                                           -25-
your sentence, I look at a variety of things. You had a really hard life as a child. As
an adult, you've been a great mom to your kids, and have even taken in a neighbor's
child and ended up being the guardian for that child." But the court ultimately gave
more weight to other 18 U.S.C. § 3553(a) factors, such as the nature and
circumstances of the offense. The court noted that Fairchild has "been a wreck" "on
the financial side of things" as evidenced by her continued misrepresentations to banks
to obtain loans. Additionally, the court stated that one of its considerations "in
deciding a sentence is what responsibility have people taken for their actions to start
putting things in order" and found that Fairchild had not yet done so. Specifically, she
had failed to file her tax return for the current year, did not file the return the prior
year, and had not "paid any Federal income tax over a nine-year time period." The
court found this "an indicator of whether [Fairchild has] accepted responsibility and
whether [Fairchild is] trying to put things into order and make amends for what's
happened, and [the court] d[idn]'t see that." The court noted that Fairchild's crime was
a "serious" one and that it had "considered all the factors in 3553(a)(1) through (7),
and [it] d[id] not believe there are grounds for a downward variance."

      On this record, we hold that the district court did not abuse its discretion in
sentencing Fairchild to 33 months' imprisonment.

                                 III. Conclusion
      Accordingly, we affirm the judgment of the district court.
                     ______________________________

                                          -26-