Court Opinion

ID: 4090776
Source: CourtListenerOpinion
Date Created: 2016-10-19 16:01:04.824076+00
Date Added: 2024-06-11T14:36:04.330499
License: Public Domain

NOT RECOMMENDED FOR FULL-TEXT PUBLICATION
                          File Name: 16a0574n.06

                                       Case No. 15-2410
                                                                                       FILED
                          UNITED STATES COURT OF APPEALS                          Oct 19, 2016
                               FOR THE SIXTH CIRCUIT                         DEBORAH S. HUNT, Clerk

UNITED STATES OF AMERICA,                             )
                                                      )
       Plaintiff-Appellee,                            )
                                                      )        ON APPEAL FROM THE
v.                                                    )        UNITED STATES DISTRICT
                                                      )        COURT FOR THE EASTERN
TERRY MYR,                                            )        DISTRICT OF MICHIGAN
                                                      )
       Defendant-Appellant.                           )

                                                                         OPINION

BEFORE: KEITH, McKEAGUE, and WHITE, Circuit Judges.

       DAVID W. McKEAGUE, Circuit Judge. Terry Myr, a self-employed auto mechanic

with a professed interest in tax-protester theories, was convicted of one count of tax evasion, 26

U.S.C. § 7201, and four counts of willful failure to file individual income tax returns, 26 U.S.C.

§ 7203. Myr claims that the district court abused its discretion and violated his constitutional

rights by excluding from evidence a civil complaint in an unrelated case in which the

government accused a tax preparer Myr used of falsifying the returns of other customers. He

also claims that the court improperly instructed the jury on the meaning of “proof beyond a

reasonable doubt.” We AFFIRM.
Case No. 15-2410
United States v. Myr

                                                          I

           Terry Myr ran an auto-repair and brokerage business specializing in rare and exotic cars

from a farm in Port Huron, Michigan. When he was not fixing luxury vehicles, Myr spent his

free time studying the federal income tax laws. His reading list included the Internal Revenue

Code as well as various tax-protester pamphlets and books which opined that the income tax

applied to corporations but was “voluntary” or “unconstitutional” as applied to individuals.

           Myr filed individual returns until 2001. When the Internal Revenue Service audited his

2000 and 2001 returns, however, it determined that he had underreported his business’s income.

After this audit began, Myr still asked his local accountant to prepare returns for 2002 and 2003.

He never filed those returns though; in fact, he stopped filing individual returns altogether after

2001. In 2005, after it completed its audit report, the IRS assessed nearly $200,000 in taxes,

interest, and penalties on Myr for the years 2000 to 2003.1

           In May 2007, to recoup this tax debt, the IRS notified Myr that it would issue a federal

tax lien against his property. The government contends that at this point, Myr began to take

evasive measures to conceal his assets. He started accepting only cash or pre-paid credit cards

for his services and mostly ceased using his personal bank account. In September 2007, he

conveyed real property to a limited-liability company in consideration for cash and gold coins.

           Most relevant to his appeal, in 2009 Myr sold a rare, original Ferrari racing engine to a

Belgian buyer for $610,000 and concealed the proceeds. Myr instructed the buyer to pay the

purchase price to a bank account that he had opened that week for On Track Group, Inc., a

Nevada nominee corporation Myr had formed the week before the sale was scheduled to occur.

Some months after On Track’s account received the money, Myr used about $330,000 to buy

1
    The audit also revealed that Myr had an undisclosed Costa Rican bank account.

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Case No. 15-2410
United States v. Myr

gold coins, which remained hidden from the IRS at least through his trial. Another $160,000

flowed to an account he set up for a second nominee, Hosea Holdings Trust. From that account,

he withdrew the funds by writing over 30 checks made out to cash.

       In 2010, Myr hired Denise Pope from Uneek Business Solutions to prepare On Track’s

2009 corporate return. Although Pope operated out of Detroit, about an hour south of where Myr

lived, Myr testified that he chose Pope based on a friend’s recommendation. He drove to Detroit

twice to meet with Pope or other Uneek employees concerning On Track’s return. In June 2010,

he filed the return after signing under penalty of perjury, as the form demands, that he had

reviewed its contents.

       Myr would later testify that he never reviewed the return’s contents. As it turned out, the

return had underreported On Track’s gross receipts from the engine sale by $110,000, deducted

$150,000 for salaries paid to non-existent employees, and wrote off $330,174 in bad debt—the

exact amount Myr spent on gold coins. Based on this underreporting, On Track claimed to owe

no federal income tax for 2009.

       In May 2013, a grand jury indicted Myr on one count of evading the tax debt assessed

against him for byas a result of the audit for the years 2000 through 2003, see 26 U.S.C. § 7201,

and four counts of willful failure to file individual tax returns for the years 2007 through 2010,

see 26 U.S.C. § 7203. Indictment, R. 1, PID 1, 3–4. For the evasion count, the indictment listed

three representative intentionally evasive acts: (a) conveying his property to a nominee entity

after notice that the IRS intended to place a tax lien on it; (b) using nominee entities, including

On Track and Hosea Holdings, to conceal his income and assets; and (c) dealing in cash. Id. at

3, PID 3.

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Case No. 15-2410
United States v. Myr

       Myr went to trial on these counts in April 2015. All the counts required the government

to prove Myr acted “willfully,” meaning that he acted deliberately in violation of a known legal

duty, and that he did not act in good faith. During his trial, Myr’s defense centered on his

subjectively held legal theories regarding his liability to pay federal income tax. The jury

instructions included, at Myr’s request, the following: “In the late 1990s and the early 2000s,

Myr engaged in a study of the federal income tax laws, and as a result, concluded that he was not

required to file federal income returns and that he did not owe such taxes. Myr asserts in that

failing to pay income taxes assessed against him by the IRS and failing to file income tax returns,

he did not act willfully and his beliefs were held in good faith.” Tr., Vol. 6 at 111, R. 50, PID

1165. During closing arguments, Myr described at length the information and bases that led him

to form these beliefs.

       During the trial, when Myr testified that he never reviewed On Track’s false return before

filing it, he attempted to introduce a civil complaint that the Department of Justice had filed

against On Track’s tax preparer, Pope. The complaint contained allegations that Pope had

falsified returns for some customers who disclaimed ever supplying her with bad information or

knowing their returns were false. In one paragraph, for example, the complaint alleges that Pope

“falsely reported that [a couple] made $6,000 in cash charitable contributions in both 2010 and

2011, and $5,035 in non-cash charitable contributions in 2010, and $5,000 in non-cash charitable

contributions in 2011. In fact, the [couple] did not make charitable contributions in those

amounts, and they did not tell Pope or Jones that they had done so.” Mot. for New Trial, R. 35-1

(Pope Complaint), ¶ 18, PID 229.

       The district court conditioned the complaint’s admission on Myr showing its relevance,

saying it would not be admitted unless it contained information “specific to [On Track’s] return.”

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Case No. 15-2410
United States v. Myr

Tr., Vol. 5 at 117–20, R. 49, PID 1028–31. As nothing in the complaint referred to that return,

the court excluded it as irrelevant to Myr’s defense. Myr moved for a new trial based on the

district court’s exclusion of the evidence. The district court denied the motion, reiterating that

the Pope complaint did not tend to make any “facts in th[e] case more or less probable.” United

States v. Myr, No. 14-20633, 2015 WL 5042321, at *5 (E.D. Mich. Aug. 26, 2015). This appeal

followed.

                                                II

       Myr uses the district court’s decision to exclude the Pope complaint from evidence as the

basis for two challenges to his conviction. The first asks us to consider the decision as an

evidentiary matter under Rule 401. The second asks us to address it as a constitutional issue.

Although these challenges differ somewhat conceptually, both rely on common propositions: that

the complaint supported Myr’s defense and its exclusion possibly affected the trial’s outcome.

We find no reversible error under either theory because the complaint offered—if anything—

equivocal evidence on an insignificant point.

       We review the district court’s decision that the complaint was irrelevant for “abuse of

discretion.” See United States v. Ray, 803 F.3d 244, 257 (6th Cir. 2015). “Generally, we will

not disturb a court’s evidentiary ruling unless we reach a definite and firm conviction that the

court made a clear error of judgment in weighing the relevant factors or that the court improperly

applied the law.” United States v. Antonio Ray, 597 F. App’x 832, 839 (6th Cir. 2015) (citing

United States v. Stepp, 680 F.3d 651, 660 (6th Cir. 20012)). But even if a court’s ruling was

clearly in error, a merely harmless error leaves a verdict undisturbed. United States v. Vasilakos,

508 F.3d 401, 406 (6th Cir. 2007). We reverse “only if the erroneous evidentiary ruling affected

the outcome of the trial.” United States v. Marrero, 651 F.3d 453, 471 (6th Cir. 2011).

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Case No. 15-2410
United States v. Myr

       Myr’s related contention, that the evidence’s exclusion violated his constitutional right to

present a meaningful defense, is an issue we review de novo. See Holmes v. South Carolina, 547
U.S. 319, 324 (2006) (holding that, whether rooted in the Due Process Clause or in the

Compulsory Process or Confrontation clauses of the Sixth Amendment, a defendant has a right

to a “meaningful opportunity to present a complete defense”); United States v. Reichert,

747 F.3d 445, 453 (6th Cir. 2014) (applying de novo review to an appeal based on Holmes). A

defendant only suffers a violation of his constitutional rights in this context, however, “if

evidence in which the defense has a weighty interest is impermissibly excluded.” Id. at 453

(quotation marks and citations omitted). That is, “only if the excluded evidence, evaluated in the

context of the entire record[,] creates a reasonable doubt that did not otherwise exist.” Id.

(quotation marks and citations omitted). The upshot of these standards: to warrant reversal, there

must be at least a reasonable possibility the complaint could have changed Myr’s verdict.

       As an initial matter, it is important to keep in mind that Myr was not charged with filing a

false return. Rather, he was charged with willfully evading the tax obligation assessed in May

2007 for tax years 2000 to 2003. The On Track tax return—which was prepared by Pope,

underreported the $610,000 proceeds from the engine sale, and took unjustified deductions—was

simply one piece of evidence offered in support of the Government’s theory that Myr hid assets

to avoid paying the amounts assessed for back taxes and penalties. The On Track return had no

relevance to the charges that Myr willfully failed to file his individual income tax returns, and

thus the Pope complaint also had no relevance to those charges.

       Assuming arguendo that the Pope complaint would have decreased the evidentiary value

of the On Track return in relation to the evasion charge, it is clear that the complaint’s exclusion,

even if erroneous, was harmless. Myr equates the complaint’s exclusion to a total inability to

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Case No. 15-2410
United States v. Myr

offer a defense on willfulness. See United States v. Canty, 499 F.3d 729, 734 (7th Cir. 2007)

(holding that the decision to forbid defendant in a counterfeiting trial from even testifying about

his motive for printing fake bills was harmful when intent was the only issue at trial). At

multiple points in his briefing, he asserts that the complaint was “critically important” or related

“directly” to his intent. And evidence going to intent should particularly matter here, he reminds

us, because lack of intent was his only defense. See id.

       But these bare assertions belie what actually happened at trial. The jury heard Myr’s

intent defense in detail and received instructions on his theory. They also heard him testify about

his role in the filing of On Track’s return—an event that played a minor role in the proceedings.

The indictment alleged three intentionally evasive acts as part of the tax-evasion charge:

(1) conveying his property to a nominee entity after notice that the IRS intended to place a tax

lien on it; (2); using nominee entities, including On Track and Hosea Holdings, to conceal his

income and assets; and (3) dealing in cash. The allegations surrounding the Ferrari transaction—

the use of nominee entities, the dealing in gold coins, the bank-account withdrawals with checks

written to cash, and, yes, the On Track return—merely evidenced a single act that satisfied the

evading charge.     The government presented overwhelming evidence on all three alleged

intentionally evasive acts. And it specifically offered voluminous evidence that Myr violated a

known legal duty—to pay his tax debt—in bad faith: it presented multiple direct communications

where-by the IRS informed Myr that, indeed, he was liable for the federal income tax.

       The falsity of the On Track tax return was offered by the government as one piece of

evidence showing that Myr had used nominees to conceal income, itself one of three core

allegations underlying the single tax-evasion charge. Had the complaint been admitted into

evidence, it would have been—at most—evidence that minimally rebutted minor evidence

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Case No. 15-2410
United States v. Myr

related to the tax-evasion charge. On this record, admitting the complaint into evidence would

not have affected the verdict on this or any other charge.

                                                 III

       In his final challenge, Myr asserts the trial court abused its discretion by using the Sixth

Circuit’s pattern jury instructions on “proof beyond a reasonable doubt.” He also says it erred in

refusing his requested addendum: that reasonable doubt encompasses the concept of an “abiding

conviction of the truth of the charge to a near certainty.”

       “A trial court has broad discretion in crafting jury instructions and does not abuse its

discretion unless the jury charge fails accurately to reflect the law.” United States v. Geisen,

612 F.3d 471, 485 (6th Cir. 2010) (quotation marks and citations omitted). “Thus, we may

reverse the jury’s conviction only if the instructions, viewed as a whole, were confusing,

misleading, or prejudicial.” Id. (quotation marks and citations omitted).

       This circuit’s pattern jury instructions provide in relevant part: “‘Proof beyond a

reasonable doubt’ is proof so convincing that you would be willing to rely and act on it without

hesitation in the most important of your own affairs.” Sixth Circuit Model Instruction 1.03

(April 2015). Myr argues that the comparison to one’s own “affairs” tends to mislead the jury

and lower the government’s burden. This formulation has attracted some criticism. See, e.g.,

Victor v. Nebraska, 511 U.S. 1, 24–25, (1994) (Ginsburg, J., concurring); United States v.

Gordon, 634 F.2d 639, 644 (1st Cir. 1980); Federal Judicial Center, Commentary to Instruction

21 (1987). Mainly, critics believe it leads a jury to compare its decision on a verdict to

“choosing a spouse, buying a house, borrowing money, or the like,” all of which involve a

“degree of uncertainty and risk taking” that is “wholly unlike” the decision jurors ought to make.

Federal Judicial Center, Commentary to Instruction 21.

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Case No. 15-2410
United States v. Myr

       The Supreme Court has held, however, that similar instructions “correctly conveyed the

concept of reasonable doubt to the jury.” Holland v. United States, 348 U.S. 121, 140 (1954).

In Holland, the district court defined “reasonable doubt” to mean “the kind of doubt . . . which

you folks in the more serious and important affairs of your own lives might be willing to act

upon.” Id. The Court did not bless the Holland district court’s instruction without exception,

however. To define “reasonable doubt,” rather than proof beyond a reasonable doubt, the Court

noted, the district court should have phrased its instruction in terms of what would make a person

“hesitate to act.” See id. But the Court saw no actual risk that the jury misunderstood the

instruction and so it passed muster. Id.

       Faced with this authority, Myr argues that our circuit’s instructions vary materially from

the language approved in Holland. It is an error, he contends, to instruct the jury that “proof

beyond a reasonable doubt” is such proof that they “would act on it without hesitation.” Instead,

he argues the court must instruct a jury that “reasonable doubt” is a doubt that “would cause

them to hesitate.”

       We consider Myr’s action-versus-inaction point to be a distinction without difference.

This view is echoed by a leading treatise on jury instructions: “What is a reasonable doubt? . . . It

is a doubt that would cause a reasonable person to hesitate to act in a matter of importance in his

or her personal life. Proof beyond a reasonable doubt must, therefore, be proof of a convincing

character that a reasonable person would not hesitate to rely upon in making an important

decision.” John S. Siffert, 1-4 Modern Federal Jury Instructions-Criminal P 4.01 (Instruction 4-2

Reasonable Doubt).

       Because the jury instructions correctly stated the law, we need not consider Myr’s

proposed additions. See Victor, 511 U.S. at 5 (“[S]o long as the court instructs the jury on the

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United States v. Myr

necessity that the defendant’s guilt be proved beyond a reasonable doubt . . . , the Constitution

does not require that any particular form of words be used in advising the jury of the

government’s burden of proof.”).

                                               IV

       For the reasons stated above, the district court’s judgment is AFFIRMED.

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