Court Opinion

ID: 22419
Source: CourtListenerOpinion
Date Created: 2010-04-25 07:55:38+00
Date Added: 2024-06-11T12:48:52.145296
License: Public Domain

UNITED STATES COURT OF APPEALS
                        For the Fifth Circuit

                               No. 99-40530

                      United States of America,

                                                        Plaintiff-Appellee,

                                     VERSUS

                           Julius L. Heard, III,

                                                        Defendant-Appellant.

           Appeal from the United States District Court
                 For the Eastern District of Texas
                               (98-CR-16-2)
                             October 19, 2000

Before REAVLEY, BENAVIDES, and DENNIS, Circuit Judges.

PER CURIAM:*

      Appellant   Julius    Heard,    III,    appeals   his   conviction   for

conspiracy to commit bankruptcy and tax fraud, aiding and abetting

concealment of proceeds from a bankruptcy estate, aiding and

abetting a failure to report income, and underreporting income.

  *
   Pursuant to 5TH CIR. R. 47.5, the Court has determined that this
opinion should not be published and is not precedent except under
the limited circumstances set forth in 5TH CIR. R. 47.5.4.

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Appellant is a certified public accountant who performed accounting

services   for   his   father-in-law,    Mr.   Delwin   Morton,   including

preparing personal and professional tax returns.            Appellant was

charged with, inter alia, conspiring with Mr. Morton to knowingly

and   fraudulently     conceal   certain   property     belonging   to   the

bankruptcy estate by reporting false income, shifting income,

concealing partnership distributions, and preparing false income

tax returns.      At trial, the government presented evidence that

Appellant had provided his father-in-law with CPA services and

advice in connection with alleged tax evasion transactions.

      Appellant argues that the district court erred in applying

Federal Rule of Evidence 403, by admitting the prosecution’s unduly

prejudicial evidence of his father-in-law’s bad character and by

excluding his expert’s testimony explaining certain accounting and

business practices.      Appellant failed to object at trial to the

admission or exclusion of most of the evidence that he complains of

on appeal. He did object, however, to the introduction of evidence

related to his father-in-law’s indictment and to the exclusion of

the testimony of his expert witness.

      “Where the party challenging the trial court’s evidentiary

ruling makes a timely objection, we review that ruling under an

abuse-of-discretion standard.” United States v. Hernandez-Guevara,

162 F.3d 862, 869 (5th Cir. 1998).         However, “[p]lain errors or

defects affecting substantial rights may be noticed although they

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were not brought to the attention of the court.”   Fed. R. Crim. P.

52(b).   We apply Rule 52(b) as outlined in United States v. Olano,

507 U.S. 725 (1993).   “Under that test, before an appellate court

can correct an error not raised at trial, there must be (1)

‘error,’ (2) that is ‘plain,’ and (3) that ‘affect[s] substantial

rights.’   If all three conditions are met, an appellate court may

then exercise its discretion to notice a forfeited error, but only

if (4) the error " ' "seriously affect[s] the fairness, integrity,

or public reputation of judicial proceedings." ' "” Johnson v.

United States, 520 U.S. 461, 466-67 (1997) (quoting United States

v. Olano, 507 U.S. at 732, in turn quoting United States v. Young,

470 U.S. 1, 15 (1985), in turn quoting United States v. Atkinson,

297 U.S. 157, 160 (1936))(internal citations omitted).

     From a review of the record, we conclude that the district

court did not abuse its discretion in the evidentiary rulings to

which the Appellant objected at trial. Appellant’s counsel, in his

opening statement, asserted that, “[Appellant] never knowingly and

purposefully helped Mr. Morton do anything wrong or improper,” and

“[Appellant] had no reason to even suspect, much less know, that

Del Morton was involved in fraudulent doings.”      The government

introduced a letter written by Appellant to the Internal Revenue

Service asking for additional time to prepare a return for his

father-in-law because of his father-in-law’s indictment, and on

cross examination, questioned     Appellant about the indictment.

Appellant’s reference to his father-in-law’s indictment by a grand

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jury of illegal conduct was relevant to show that Appellant knew of

both    the   indictment      and    the    true    nature    of    the   subsequent

activities in which he participated with his father-in-law. It was

also relevant to impeach the credibility of his testimony that he

was    unaware    of    the   illegal       nature    of     his   father-in-law’s

activities.      Furthermore, the district court instructed the jury

that it should take into consideration that the father-in-law had

been acquitted of the particular charge made in the indictment.

The district court properly, thoroughly, and repeatedly instructed

the    jury   before,    during,      and   after    evidence      was    taken    that

Appellant could not be convicted merely because of his association

with another person who committed a crime, and that he was presumed

innocent until proven guilty beyond a reasonable doubt based upon

the jury’s consideration of all of the evidence as instructed.

       The trial court did not abuse its discretion by excluding the

testimony of Appellant’s accounting and business practices expert

because the expert’s specialized knowledge would have been of

little, if any, relevance or assistance to the jury in this

particular case.        The government’s case did not call into question

the facial propriety of the practices of the Appellant or his

father-in-law.         Instead, the prosecution sought to prove with

extrinsic evidence that the Appellant and his father-in-law used

apparently     typical     and      legitimate      practices      to    conceal    and

misrepresent their illegitimate activities.                     Consequently, the

district court did not abuse its discretion in ruling that, based

                                            4
on the material issues of this case, the expert’s specialized

knowledge of the accounting and business practices used would not

be of relevant assistance to the jury in understanding or deciding

the crucial credibility issues related to whether the Appellant

knew that the practices were being used to conceal or misrepresent

true facts.    See United States v. West, 22 F.3d 586, 600 (5th Cir.

1994)(upholding    exclusion    of   expert   testimony     where   jury   was

“perfectly     capable   of    determining,    based   on     the   evidence

presented,” the contested issue).

     As for the evidence objected to for the first time on appeal,

we see no error in its introduction, much less error that was

“plain,” that “affect[s]       substantial rights” and that “seriously

affect[s] the fairness, integrity, or public reputation of judicial

proceedings.”     Johnson, 520 U.S. at 466-67 (internal citations

omitted).     The charges against the Appellant involved his alleged

knowledge and conduct that was inextricably related to the alleged

unlawful activities of his father-in-law.        The unlawfulness of the

father-in-law’s activities was not genuinely at issue; the true

extent of Appellant’s knowledge when he participated and assisted

in those actions was the crucial issue.            The parties did not

seriously question the facts of the father-in-law’s actions as both

relied to a large extent on a common version of them to explain

whether the Appellant’s involvement constituted criminal activity.

The Appellant’s defense was based primarily on his testimony that

he was unaware that his accounting services and other assistance

                                     5
were being used by his father-in-law for unlawful purposes.                   The

prosecution severely challenged his credibility and innocence with

clearly relevant and admissible evidence.                    For instance, when

Appellant    was    asked   on     cross-examination      about   a   bankruptcy

schedule he had prepared that failed to disclose a distribution by

a partnership of which he was a member, Appellant admitted that it

caused him concern.        The trustee of his father-in-law’s bankruptcy

estate verified that distributions for several years shown in

partnership returns prepared by Appellant were not listed as assets

of   the   estate   when    they    should    have   been.      Another   witness

testified that records of the distributions were available to

Appellant and that he prepared tax returns for the partnership, but

did not give the information to the bankruptcy trustee.                       Yet

another witness and even Appellant himself both testified that

Appellant also did not list the distributions as income on his

father-in-law’s      personal       returns,    which     Appellant    prepared.

Furthermore, Appellant also admitted that he characterized an

alleged “land sale” differently after the sale was complete by

preparing    a   fraudulent      trustee     agreement.       Additionally,   the

government presented evidence of tax returns prepared by Appellant

that had misrepresented personal expenses as deductible business

expenses and Appellant’s failure to amend the returns even after he

claimed to have discovered the errors.

      Finally, Appellant also challenges factual determinations made

by the judge at the sentencing phase under Apprendi v New Jersey,

                                        6
120 S. Ct. 2348 (2000).     Although Appellant argues that Apprendi

should be applied to cases in which sentencing determinations

merely increase the sentence within the statutory range, we decline

to extend Apprendi, which held, “Other than the fact of a prior

conviction, any fact that increases the penalty for a crime beyond

the prescribed statutory maximum must be submitted to a jury, and

proved beyond a reasonable doubt.”         120 S.Ct. at 2362-63.     Because

the factual determinations made by the district court did not

increase    Appellant’s   sentence       beyond   the   statutory   maximum,

Appellant’s argument is without merit.              See United States v.

Doggett, 2000 WL 1481160, *4 (5th Cir. 2000); United States v.

Meshack, 2000 WL 1218437 (5th Cir. 2000).

     The judgment of conviction rendered by the district court is

AFFIRMED.

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