Court Opinion

ID: 160624
Source: CourtListenerOpinion
Date Created: 2010-08-14 06:48:19+00
Date Added: 2024-06-11T17:15:28.999738
License: Public Domain

F I L E D
                                                                   United States Court of Appeals
                                                                           Tenth Circuit
                     UNITED STATES COURT OF APPEALS
                                                                           JAN 11 2001
                            FOR THE TENTH CIRCUIT
                                                                      PATRICK FISHER
                                                                               Clerk

    UNITED STATES OF AMERICA,

                Defendant-Appellee,

    v.                                                   No. 99-7144
                                                    (D.C. No. 99-CR-29-B)
    RONALD HERLOPH SATHER,                               (E.D. Okla.)

                Defendant-Appellant.

                            ORDER AND JUDGMENT            *

Before BALDOCK , PORFILIO , and BRORBY , Circuit Judges.

         After examining the briefs and appellate record, this panel has determined

unanimously to grant the parties’ request for a decision on the briefs without oral

argument. See Fed. R. App. P. 34(f); 10th Cir. R. 34.1(G). The case is therefore

ordered submitted without oral argument.

*
      This order and judgment is not binding precedent, except under the
doctrines of law of the case, res judicata, and collateral estoppel. The court
generally disfavors the citation of orders and judgments; nevertheless, an order
and judgment may be cited under the terms and conditions of 10th Cir. R. 36.3.
      Ronald Herloph Sather appeals from his convictions under 26 U.S.C.

§ 7212(a) (corruptly endeavoring to obstruct or impede the due administration of

the Internal Revenue Code); 18 U.S.C. § 157 (bankruptcy fraud); and 42 U.S.C.

§ 408(a)(7)(B) (use of a false social security number). He also claims that his

trial counsel was constitutionally ineffective. Our jurisdiction arises under

18 U.S.C. § 1291, and we affirm his convictions.

                                          I.

      Viewing the evidence in the light most favorable to support his convictions,

United States v. Collins , 920 F.2d 619, 621 (10th Cir. 1990), we summarize the

facts as follows. In 1992 Mr. Sather decided to become an active income tax

protestor. As part of his plan to avoid taxation, and against the advice of his

accountant, he established trusts into which he diverted income from his

chiropractic business, filed quit claim deeds to remove his name from real

property he owned, placed false liens against his real estate holdings, and created

aliases with separate post office addresses. Mr. Sather ignored the advice of an

estate and tax attorney that his anti-tax plan would probably result in his

imprisonment and refused to file income taxes for tax years 1992-1995. He

became an active proponent of a tax protestor movement known as the Pilot

Connection Society, offering to help others to become “untaxed” for a fee.

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      In 1994 the IRS requested Mr. Sather’s 1992 tax return. Mr. Sather replied

that he revoked all of his signatures on prior documents filed with the IRS before

1992 and asked the IRS to refund to him monies he had paid in past taxes. In

1995 the IRS began issuing summons for Mr. Sather’s business and financial

records. One of Mr. Sather’s former employees testified that Mr. Sather then

instructed her to shred documents showing income so that the IRS could not

determine how much income his chiropractic office had produced, instructed her

not to place large income payments from the business on the ledger sheets, and

placed a ZAP program on his business computer system that would delete the hard

drive if the IRS came to the office. After the employee was served with an IRS

summons, Mr. Sather told her it was completely voluntary and that she did not

have to talk with anyone.

      In August 1995 Mr. Sather tried to obtain credit through one of his trusts at

a local bank. He gave a social security number belonging to another individual as

his own on the loan application.

      In 1996 Mr. Sather rented a storage unit so that he could hide his Mercedes

from the IRS. When renting it, he unsuccessfully tried to use an alias and again

wrongfully used the other individual’s social security number as his own on the

rental form. After renting the unit, Mr. Sather actually used a different unit

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without the business’s permission, later explaining that he didn’t want people to

know his business.

      In 1997 Mr. Sather filed the first in a series of three bankruptcy petitions

seeking protection from federal taxes. It is undisputed that the first petition,

which he later voluntarily dismissed, falsely stated that Mr. Sather owned only

$6,365 in total assets and earned $2,000/month when in fact he owned at least

$394,782 in assets and earned over $9,000 from his chiropractic business.

      Mr. Sather was convicted on eight various criminal counts after the jury

rejected his “good faith” defense. He appeals from only three of the convictions

and raises four issues, which we address   seriatim .

                                    II. Discussion

      A. Motion to strike surplusage. An indictment must be “a plain, concise,

and definite written statement of the essential facts constituting the offense

charged.” Fed. R. Crim. P. 7(c)(1). On motion of the defendant, a court may

strike immaterial or irrelevant allegations that may be prejudicial to the

defendant. Fed. R. Crim. P. 7(d) & advisory committee’s note;     Collins , 920 F.2d

at 631. Mr. Sather first argues that the district court erred by denying his motion

to strike paragraphs 1 through 11 of Count One, which alleged a violation of 26

U.S.C. § 7212(a).

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       The paragraphs at issue all refer to events occurring in 1992, which was

more than six years before March 16, 1999, when the indictment was filed.             See

26 U.S.C. § 6531(5) (providing a six-year statute of limitations). The government

argued, and the district court found, that Count One alleged a “continuing

violation” that was not complete until March 3, 1998, and that the six-year statute

of limitations therefore did not begin to run until 1998.         See Toussie v. United

States , 397 U.S. 112, 115 (1970) (noting that statutes of limitation normally begin

to run when crime is complete). In so concluding, the district court analogized to

cases from other circuits holding that “the date of the latest act of evasion triggers

the statute of limitations” for violations of 26 U.S.C. § 7201 (income tax

evasion). R. Doc. 22, at 2 n.1. Mr. Sather argues that the district court failed to

properly determine whether violation of § 7212 constitutes a “continuing

violation” as that term of art was defined in         Toussie and United States v. Jaynes ,

75 F.3d 1493 (10th Cir. 1996).

       We review the court’s ruling on the motion to strike surplusage for abuse of

discretion. Collins , 920 F.2d at 631. It is undisputed that Count One of the

indictment alleged, and Mr. Sather committed, additional corrupt acts of

interference with the enforcement of IRS laws that occurred within the statute of

limitations; thus the question of whether § 7212 alleges a continuing violation is

not truly at issue here.   Cf. Toussie , 397 U.S. at 115 (overturning conviction

                                                -5-
because single act of failing to register for draft was not a continuing violation

and statute of limitations had passed on that act). The only question we must

answer is whether the district court abused its discretion in presenting to the jury

alleged facts that occurred more than six years before the indictment issued. We

hold that it did not.

         Even if Mr. Sather’s acts in 1992 could not be separately prosecuted as

outside the statute of limitations, they were relevant to demonstrate the steps

Mr. Sather took to avoid taxation and the unreasonableness of Mr. Sather’s good

faith defense in light of the warnings of his accountant and a tax attorney.   See

Collins , 920 F.2d at 622 (holding that jury could consider reasonableness of good

faith defense to tax evasion). Thus, the allegations were not “mere surplusage”

and the district court did not abuse its discretion in denying Mr. Sather’s motion.

Even if the facts alleged were surplusage, we have long held that “mere

surplusage in an indictment or information may be disregarded, and such

disregard does not render the indictment or information invalid if sufficient

remains to charge a crime.”     Bary v. United States , 292 F.2d 53, 56 (10th Cir.

1961).

         B. Insufficiency of the evidence - Count Five. Mr. Sather claims that the

evidence was insufficient to support a finding of criminal intent for bankruptcy

fraud because he was not represented by an attorney in his bankruptcy

                                             -6-
proceedings and he therefore did not realize that his admittedly false statements

were “legally false.” Appellant’s Br. at 25. We review the sufficiency of the

evidence de novo , asking whether the direct and circumstantial evidence, together

with the reasonable inferences drawn therefrom, support a conclusion that the

defendant is guilty beyond a reasonable doubt.    United States v. Hanzlicek , 187

F.3d 1228, 1238 (10th Cir. 1999).

      The government established that Mr. Sather made false statements on his

1997 bankruptcy filing, including failing to claim a $30,000 firearm collection

that he had stored with a friend and his Mercedes Benz. Although Mr. Sather

attempted to explain his intent in filing conflicting and false petitions, the jury

was free to weigh the evidence and draw an inference of intent to defraud from

the evidence. The evidence was sufficient to support a finding of intent to

defraud beyond a reasonable doubt.

      C. Sufficiency of the evidence - Count Seven. Mr. Sather alleges that

there was insufficient evidence to establish that he used a false social security

number with the intent to deceive another person because he used the correct

employer identification number of one of his trusts on the loan application that he

made with that trust. Unfortunately, Mr. Sather did not include the document in

the materials submitted to this court to support that claim. As the government

points out, however (albeit also without supplying the supporting document to this

                                           -7-
court), there was ample testimony that Mr. Sather used the social security number

of a different individual as   his social security number on the application. R. Vol.

IV at 253-54. Mr. Sather’s claim is without merit.

       D. Ineffective assistance of counsel. We dismiss this claim, as it should be

brought on collateral review and not on direct appeal.      United States v. Galloway ,

56 F.3d 1239, 1240 (10th Cir. 1995).

       The judgment of the United States District Court for the Eastern District of

Oklahoma is AFFIRMED.

                                                         Entered for the Court

                                                         John C. Porfilio
                                                         Circuit Judge

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