Court Opinion

ID: 6499599
Source: CourtListenerOpinion
Date Created: 2022-07-13 15:00:37.546149+00
Date Added: 2024-06-11T09:11:33.548318
License: Public Domain

USCA11 Case: 19-13297     Date Filed: 07/13/2022   Page: 1 of 16

                                                     [PUBLISH]
                            In the
         United States Court of Appeals
                 For the Eleventh Circuit

                   ____________________

                         No. 19-13297
                   ____________________

PETER HESSER,
                                           Petitioner-Appellant,
versus
UNITED STATES OF AMERICA,

                                          Respondent-Appellee.

                   ____________________

          Appeal from the United States District Court
                for the Middle District of Florida
           D.C. Docket Nos. 2:16-cv-00632-JES-UAM,
                      2:11-cr-00083-NPM-1
                    ____________________
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2                          Opinion of the Court                       19-13297

Before LAGOA, BRASHER, and TJOFLAT, Circuit Judges.
TJOFLAT, Circuit Judge:
       This is an appeal of the District Court’s order granting Peter
Hesser partial relief under 28 U.S.C. § 2255 based on Hesser’s
claims that his trial counsel was ineffective. The District Court va-
cated three of Hesser’s original convictions for tax fraud but left his
fourth conviction for tax evasion in place. We granted a Certificate
of Appealability as to the effectiveness of Hesser’s trial counsel in
handling Count Four for tax evasion. Having considered Hesser’s
arguments on appeal and with the benefit of oral argument, we re-
verse the District Court’s order below and grant Hesser’s petition.
                                       I.
       In 2013, Hesser went to trial for three counts of tax fraud
under 18 U.S.C. § 287 and 18 U.S.C. § 2 and one count of attempted
tax evasion under 26 U.S.C. § 7201. 1 A jury convicted on all four
counts, and he was sentenced to a period of incarceration, super-
vised release, and restitution. He appealed, arguing, among other
things, that his convictions should be overturned because the evi-
dence in the Government’s case-in-chief was insufficient to sustain
a conviction as to all four counts. Hesser, 800 F.3d at 1314. Because
Hesser’s counsel had not properly objected to the sufficiency of the

1 For a full discussion of the facts of Hesser’s criminal case, see United States
v. Hesser, 800 F.3d 1310 (11th Cir. 2015).
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19-13297               Opinion of the Court                          3

Government’s evidence below under Fed. R. Crim. P. 29, we re-
viewed his claims on the insufficiency of the evidence only under a
manifest miscarriage of justice standard. Id. at 1320. As to the first
three counts of tax fraud, we held that, although the Government’s
evidence would have been insufficient under a de novo standard,
no manifest miscarriage of justice had resulted as a result of the
jury’s verdict, so we did not disturb those convictions. Id. at 1320–
23. As to Count Four, the attempted tax evasion conviction, we
held that under the manifest miscarriage of justice standard there
was “ample evidence” from which the jury could have reasonably
found that Hesser committed tax evasion. Id. at 1324. So, we de-
clined to disturb that conviction as well.
        After we issued our ruling on direct appeal, Hesser filed a
habeas petition under 28 U.S.C. § 2255 in the District Court to set
aside his conviction on all four counts. He argued that his trial
counsel was ineffective under the Sixth Amendment in three re-
spects. First, he argued that his trial counsel was deficient in fail-
ing to properly move for a judgment of acquittal based on the in-
sufficiency of the evidence after the Government finished present-
ing its case-in-chief. Second, Hesser argued that his trial counsel
was ineffective for calling him as a witness at trial. And third, he
argued that his attorney failed to properly warn him of the dan-
gers of testifying in his own defense, such that his acceptance of
the advice to testify was not knowing, voluntary, and intelligent.
The District Court held that Hesser’s claim on the sufficiency of
the evidence was meritorious as to the three counts of tax fraud
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4                      Opinion of the Court                  19-13297

but declined to disturb the jury’s verdict as to Count Four for tax
evasion. The District Court then held that Hesser’s decision to
testify was knowing and intelligent and that there was no evi-
dence that Hesser’s attorney had improperly advised him about
testifying in his own defense. As a result, the District Court va-
cated the convictions for the first three counts of tax fraud but left
in place the fourth for tax evasion. Hesser timely appealed, re-
newing his arguments that his counsel was ineffective 1) in failing
to properly move for judgment of acquittal as to Count Four, 2)
in calling him to the witness stand, and 3) in failing to advise him
of the dangers of testifying in his own defense.
                                  II.
       In any ineffective assistance of counsel case, we require a ha-
beas petitioner to show that his counsel’s performance was defi-
cient because it “fell below an objective standard of reasonable-
ness.” Strickland v. Washington, 466 U.S. 668, 687–88, 104 S. Ct.
2052, 2064 (1984). We also require a habeas petitioner to show that
counsel’s deficiency caused prejudice by establishing that “there is
a reasonable probability” that the outcome of the trial would have
been different if trial counsel had not been deficient. Hinton v. Al-
abama, 571 U.S. 263, 275, 134 S. Ct. 1081, 1089 (2014) (quoting
Strickland, 466 U.S. at 694, 104 S. Ct. at 2068). We will only say
that an attorney’s performance was objectively unreasonable when
“no competent counsel would have taken the action” in question.
See Hall v. Thomas, 611 F.3d 1259, 1290 (11th Cir. 2010) (internal
quotation marks and citation omitted). And we will only say that
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19-13297                  Opinion of the Court                              5

there was prejudice when defense counsel’s deficiency undermined
“confidence in the outcome” of the trial. Strickland, 466 U.S. at
694, 104 S. Ct. at 2068.
       As to Count Four for attempted tax evasion, the basic in-
quiry on the ineffective assistance of counsel claim is, whether
Hesser’s trial counsel was deficient in failing to move for judgment
of acquittal under Fed. R. Crim. P. 29 after the Government’s
presentation of its case-in-chief, and, if so, whether that deficiency
prejudiced the outcome of the trial. Had Hesser’s trial counsel
moved for judgment of acquittal at the end of the Government’s
case-in-chief, the District Court would have reviewed the suffi-
ciency of the evidence under the standard of Fed. R. Crim. P. 29.
So, we ask whether there is a reasonable probability that the Dis-
trict Court in the criminal case would have held that the Govern-
ment’s evidence was insufficient to sustain a conviction for at-
tempted tax evasion, if it had been reviewing under the Fed. R.
Crim. P. 29 standard. 2 Hesser’s basic contention is that his convic-
tion was based on evidence that the defense presented, including
his own testimony. He says that his attorney’s defense constituted

2 We note that the District Court judge in this habeas case was the same judge
who presided over the criminal case, and he said that, even under the standard
of Fed. R. Crim. P. 29, he would not have granted the motion for judgment of
acquittal. Because we hold today that the motion for acquittal should have
been granted as a matter of law, we would have reversed the District Court
on direct appeal, had Hesser’s trial counsel properly moved for judgment of
acquittal under Fed. R. Crim. P. 29.
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6                          Opinion of the Court                       19-13297

ineffective assistance of counsel because it filled in the gaps of the
Government’s case where the Government’s case would have
been insufficient to sustain a conviction on its own. If the jury did
indeed rely on Hesser’s defense to convict him of Count Four,
then, Hesser says, he established both deficient performance (be-
cause his attorney proceeded to fill in the gaps of the Government’s
case instead of moving for acquittal) and prejudice (because there
is a reasonable probability that the District Court would have va-
cated the conviction for insufficiency of the evidence) for his inef-
fective assistance of counsel claim.
                                      III.
       We first look at the tax evasion statute. The elements of
attempted tax evasion under 26 U.S.C. § 7201 3 are as follows: “1)
willfulness, 2) the existence of a tax deficiency, and 3) an affirmative
act constituting an evasion or attempted evasion of the tax.”
Hesser, 800 F.3d at 1323. At issue in this case is the third element
of the statute, the affirmative act requirement. See United States
v. Miller, 588 F.3d 897, 907 (5th Cir. 2009) (explaining that “[a]ffirm-
ative acts that satisfy the second element may include keeping dou-
ble sets of books, concealment of assets, or ‘any conduct, the likely

3 “Any person who willfully attempts in any manner to evade or defeat any
tax imposed by this title or the payment thereof shall, in addition to other pen-
alties provided by law, be guilty of a felony and, upon conviction thereof, shall
be fined not more than $100,000 ($500,000 in the case of a corporation), or
imprisoned not more than 5 years, or both, together with the costs of prose-
cution.” 26 U.S.C. § 7201.
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19-13297               Opinion of the Court                       7

effect of which would be to mislead or to conceal’” (quoting Spies
v. United States, 317 U.S. 492, 499, 63 S. Ct. 364, 368 (1943))). In
Count Four of Hesser’s indictment, the Government put forth
three possible affirmative acts that would satisfy the tax evasion
statute’s affirmative act requirement. First, the Government said
that Hesser had removed his assets from examination of the IRS by
converting them to gold and that he had quitclaimed his house to
a trust. Second, the Government alleged in the indictment that
Hesser had filed a fraudulent 2007 tax return, which would serve
as an alternative affirmative act toward evasion. Third, the Gov-
ernment said that Hesser had filed additional false income tax re-
turns for 2005 and 2006, which would be a third affirmative act of
tax evasion. The question is whether the Government sufficiently
proved any of these affirmative acts with its own evidence—with-
out defense counsel’s presentation—such that any evidence the de-
fense could have added would not have prejudiced the outcome of
the case because the Government had already carried its burden of
proof.
       Although we were not a model of clarity in addressing
Count Four in our opinion on direct appeal, we held that the Gov-
ernment failed to prove that Hesser’s 2007 tax return was actually
false under a de novo standard. Hesser, 800 F.3d at 1323, 1324 (ex-
plaining that Hesser argued that “the Government failed to prove
that his 2007 tax return was actually false” but holding that “[t]he
evidence . . . [wa]s not shockingly tenuous” because Hesser’s testi-
mony filled in any gaps in the Government’s case). So, the second
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8                       Opinion of the Court                 19-13297

affirmative act listed in the indictment, that Hesser had filed a false
2007 tax return, is not sufficient to meet the affirmative act element
of the tax evasion statute under a de novo standard of review. See
Heathcoat v. Potts, 905 F.2d 367, 370 (11th Cir. 1990) (explaining
that “[u]nder the ‘law of the case doctrine’” our prior conclusions
of law are “generally binding in all subsequent proceedings in the
same case . . . later on appeal” (internal citation omitted)). Next,
turning to the Government’s third alleged affirmative act, the filing
of false income tax returns for 2005 and 2006, we likewise said in
the direct appeal that the Government had not proven that the
2005 and 2006 tax returns were false. Hesser, 800 F.3d at 1320
(“[W]e agree that the Government’s evidentiary presentation was
deficient.”). So, the Government’s case-in-chief did not establish
the third affirmative act for tax evasion. Having just knocked out
the second and third alleged affirmative acts listed in the indictment
for attempted tax evasion, we can only hold that Hesser’s counsel
did not deficiently perform (and therefore did not cause prejudice)
if the first set of affirmative acts alleged by the Government in the
indictment was sufficiently proven in the Government’s case-in-
chief.
       The first set of alleged affirmative acts in the indictment was
that Hesser had removed his assets from examination of the IRS by
converting them to gold and that he had quitclaimed his house to
a trust. The question is whether either of these acts were proven
to be affirmative acts of attempted tax evasion. Turning to the first
act, Hesser does not dispute that the Government proved at trial
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19-13297               Opinion of the Court                        9

that Hesser hid gold in his house and that he did not want the IRS
to find it. What Hesser disputes is whether that action alone is le-
gally relevant to attempted tax evasion.
      The only way that the action of hiding gold from the IRS
would be legally significant to constitute an affirmative act for at-
tempted tax evasion is if the gold had been subject to a tax levied
on Hesser. Otherwise, it would not matter how much he wanted
to cheat the IRS. He would not be cheating on his taxes because
the gold would not be subject to a tax levied on him. In other
words, what he was doing in hiding gold would not be an attempt
toward evading his taxes.
       The Government’s evidence primarily consisted of the fact
that Hesser attended tax protestor meetings and his wife explained
that he hid the gold because he did not want the IRS to find it.
Hesser’s wife also testified that he gave her $50,000 from some of
the gold that he sold. But, as the Government conceded at oral
argument, the Government never provided any evidence to the
jury that the gold was Hesser’s. The Government’s response to
Hesser on this insufficiency of the evidence is something to the ef-
fect of, “Don’t worry. We’ve only charged attempt. And clearly
Hesser was attempting to evade the IRS.” There is a problem with
this argument: attempting to do something non-criminal is not a
crime.
        The Government confuses a mistake of law with a mistake
of fact. Suppose one defendant is charged with attempted murder
because he went into a bedroom and shot a gun at a mass under
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10                     Opinion of the Court                19-13297

the covers, which he believed to be his arch enemy. It turns out
the mass was a pillow and not a person. If the facts had been as the
defendant thought they were—if he had been able to do everything
he planned to do—he would have likely committed the crime of
murder. He simply mistook the facts because it turns out his en-
emy was not under the covers, and he could be successfully prose-
cuted for attempted murder. Now suppose a second defendant
mistakenly believes that it is a federal crime to shoot at trees on
one’s own property. He intentionally shoots at a tree in his front
yard, and he thinks that he has committed a crime. He is mistaken
on the law. Under this hypothetical, shooting at a tree in one’s own
yard is not a federal crime. So, the second defendant cannot be
convicted of an attempt crime because he did everything he
planned to do, and it still did not amount to a step toward criminal
activity. All this is to say, someone can be convicted for attempt
when they mistake the facts but not when they simply mistake the
law. Because the Government did not show that the gold bullion
was taxable to Hesser, at most, all the Government proved was
that Hesser was possibly mistaken on the law. And he cannot be
convicted for attempted tax evasion on that basis. We’ll explain
why.
      The Government asked the jury to convict Hesser for hiding
gold bullion in his house so that the IRS could not find it. But the
Government never established that the gold was his. This matters
because whether the gold was Hesser’s determines whether
Hesser’s alleged attempt at tax evasion is a mistake of law case. If
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19-13297                   Opinion of the Court                              11

the Government had put forth sufficient evidence to prove beyond
a reasonable doubt that the gold was Hesser’s, then it might have
presented enough evidence for a jury to reasonably find beyond a
reasonable doubt that Hesser really did attempt to evade paying his
taxes since tax liability had accrued to Hesser before he began hid-
ing gold. And even if Hesser unsuccessfully evaded the IRS in the
end because he was mistaken on the facts—he thought the IRS
would not find out about the gold bullion—he still attempted to
evade under the statute.
        But the Government did not provide enough evidence for a
reasonable jury to conclude that the gold was Hesser’s beyond a
reasonable doubt. 4 Then, we are left with Hesser hiding random
gold bullion. And, just like the defendant who thought that shoot-
ing at trees on one’s own property was a crime, based on the Gov-
ernment’s presentation of evidence, we are left to think that per-
haps Hesser believed that hiding gold was an inherent act of tax
evasion or that he needed to hide it because the IRS would come
and steal it or that he was simply protecting money belonging to
the family trust. But, just like shooting at trees on one’s own prop-
erty isn’t a crime, hiding gold in and of itself is not tax evasion or
attempted tax evasion. Without proving that the gold was actually
Hesser’s, the Government has left open the very real possibility

4 The most obvious alternative explanation is that the gold belonged to a fam-
ily trust called the Riverside Trust. Evidence at trial demonstrated that Hesser
often invested for the trust. And the Government never proved that the gold
was Hesser’s instead of Riverside Trust’s.
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12                         Opinion of the Court                      19-13297

that Hesser committed a mistake of law—that he thought he was
doing something criminal that was in fact innocuous—or that he
did not even think he was doing something criminal in hiding
money for the family trust. And that is not proof beyond a reason-
able doubt of an affirmative act, which the Constitution requires
for Hesser’s conviction to stand.
       So, the Government did not carry its burden in proving that
Hesser’s conversion of a certain amount of money to gold bullion
constituted an affirmative act toward tax evasion. So, we are left
with the other affirmative act that the Government put in the in-
dictment—that Hesser quitclaimed his house to a newly created
trust 5—and the question is whether that constitutes an affirmative
act toward tax evasion under 26 U.S.C. § 7201. For sure, the trans-
fer of the house was suspicious. Hesser transferred the house to
the trust in the spring of 2006, around the time the IRS filed notice
of a tax lien against the Hessers. His wife did not know the details
of the trust and did not know anything about the trustee beyond
the fact that his name was Michael Harris. Hesser’s wife said that
she believed that putting the house in the trust was supposed to
eliminate the mortgage payments the Hessers owed based on a
supposedly illegal clause in the mortgage and that Hesser had got-
ten the idea to put the house in a trust after attending a seminar on
mortgages.

5 This is a different trust from the family trust discussed supra.
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19-13297                Opinion of the Court                        13

        The problem with the quitclaim of the house serving as the
affirmative act for attempted tax evasion is, again, that the Govern-
ment never proved how Hesser doing so would have any effect on
his tax liability. In its brief, the Government said that it had proven
that there was a tax lien on the house at the time that Hesser had
put the house into the trust. Veritably, that would have been evi-
dence of Hesser’s intent to evade his tax obligations. But, as the
Government conceded at oral argument, that was an incorrect
framing of the facts. Hesser was aware that tax liability had accrued
by early 2006, when Hesser transferred the house to a trust. Hesser,
800 F.3d at 1316. But a lien was not put on Hesser’s house until
2007, after he had transferred his house to the trust. And trying to
avoid one’s mortgage payments may be problematic on other
grounds and lead to foreclosure, as it did in this case, but it is not
the crime of tax evasion and cannot serve as the affirmative act for
tax evasion by itself.
        The Government never even entered a copy of the quit-
claim deed as one of its own exhibits to establish the timing of the
transfer of the home to the trust in comparison with the accrual of
tax liability. The defense did. But we cannot rely on the defense’s
presentation in determining whether the Government’s evidence
was sufficient to convict Hesser. In short, the Government’s case
on the quitclaim of the house as the affirmative act fails for much
the same reason that it failed on the gold bullion act. Even if Hesser
thought he was committing tax evasion by putting his house in a
trust (and it is not even clear he did think this from the
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14                        Opinion of the Court                      19-13297

Government’s case-in-chief), it would never be tax evasion for
Hesser to simply put his house into a trust, without more evidence
that the move was aimed at some sort of tax evasion.
        Beyond its (now-corrected) assertion that the house lien
came before the trust (which is just wrong based on the record) and
its also mistaken statement that Hesser could be convicted of tax
evasion because he simply thought that he was evading his taxes
by putting his house into a trust, 6 the Government has not pointed
to one shred of evidence to support its affirmative act theory on the
house assignment.
       We are mindful of the fact that under the de novo standard
of Fed. R. Crim. P. 29 for judgment of acquittal, which we are re-
quired to apply in the present case, we must review the evidence
in the Government’s favor and take “all reasonable inferences” in
the Government’s favor. United States v. Fleury, 20 F.4th 1353,
1367 (11th Cir. 2021) (citing United States v. Browne, 505 F.3d 1229,
1253 (11th Cir. 2007)). But we have an equal obligation under Fed.
R. Crim. P. 29 to think about whether, having viewed the evidence
in the Government’s favor, the Government proved its case be-
yond a reasonable doubt to a “‘rational trier of fact.’” Id. (quoting
Jackson v. Virginia, 443 U.S. 307, 319, 99 S. Ct. 2781, 2789 (1979)).

6 The Government also points vaguely in its brief to the fact that Hesser at-
tended tax protestor meetings around the time he deeded his house to the
trust. That may be some evidence of interest in learning about ways to chal-
lenge federal taxes, but, without more, it does nothing to prove that the deed-
ing of the house to the trust was an act of tax evasion.
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19-13297                   Opinion of the Court                              15

In this case, the Government did not do so. Neither the hiding of
the gold bullion nor the deeding of the house into a trust establish
the required affirmative act for tax evasion under 26 U.S.C. § 7201.
Because the Government did not establish one of the elements of
attempted tax evasion, there is no way that a jury could have found
Hesser guilty of attempted tax evasion beyond a reasonable doubt,
and the District Court would have been required to grant a motion
for judgment of acquittal, had it been properly made.
       That means Hesser’s counsel’s performance was deficient
because he failed to properly move for judgment of acquittal when
the Government had not carried its evidentiary burden in its case-
in-chief. See Strickland, 466 U.S. at 687, 104 S. Ct. at 2064. It also
means that Hesser suffered prejudice because of that deficient per-
formance. See Hinton, 571 U.S. at 275, 134 S. Ct. at 1089. Had
Hesser’s counsel properly moved for judgment of acquittal, the
District Court would have been legally required to grant it for the
same reasons we do today under a de novo standard. 7 Hesser suf-
fered a violation of his Sixth Amendment right to counsel. So, we
grant his habeas petition and vacate his conviction under Count
Four for tax evasion.

7 This is one case where prejudice rises and falls with deficient performance
because our ruling that counsel was deficient in failing to move for judgment
of acquittal on the facts of this case means that we think there is a reasonable
probability that the outcome of this would have been different had defense
counsel moved for it.
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16                     Opinion of the Court                 19-13297

       In doing so, we note the asymmetry between the plight of
Hesser’s wife and his own. It seems unfair that she now has a felony
conviction for filing a false tax return on her record and her hus-
band will have a record free of convictions for tax fraud or evasion
based on this case. This is especially so since Hesser was clearly the
mastermind behind all the tax and mortgage maneuvers that
Hesser and his wife made. We do not rejoice in that outcome. But
Hesser’s wife chose to plead guilty, and Hesser did not. And it
turns out the Government did not carry its burden in proving
Hesser’s guilt beyond a reasonable doubt, and Hesser’s own de-
fense probably did more to convict him than the Government did.
So, we can confidently say that the violation of Hesser’s Sixth
Amendment warrants the grant of his habeas petition now.
        Finally, we do not need to address Hesser’s claims on
whether his counsel was deficient in calling him to the stand or in
failing to warn him about the dangers of testifying at trial. Our
decision on the sufficiency of the evidence vacates Count Four of
his conviction, which was the only count left of his original convic-
tion. So, deciding anything else today would have no effect on the
result of this case. For all these reasons, we reverse.
      PETITION GRANTED.