Court Opinion

ID: 2642256
Source: CourtListenerOpinion
Date Created: 2013-11-15 01:00:36.627972+00
Date Added: 2024-06-11T13:13:48.739883
License: Public Domain

UNPUBLISHED

                   UNITED STATES COURT OF APPEALS
                       FOR THE FOURTH CIRCUIT

                               No. 12-4358

UNITED STATES OF AMERICA,

                Plaintiff - Appellee,

           v.

RICHARD JAENSCH,

                Defendant - Appellant.

Appeal from the United States District Court for the Eastern
District of Virginia, at Alexandria. Gerald Bruce Lee, District
Judge. (1:11-cr-00158-GBL-1)

Argued:   September 20, 2013                 Decided:   November 14, 2013

Before GREGORY and DUNCAN, Circuit Judges, and Samuel G. WILSON,
United States District Judge for the Western District of
Virginia, sitting by designation.

Vacated   in  part,   affirmed   in  part,   and  remanded with
instructions by unpublished opinion.     Judge Duncan wrote the
opinion, in which Judge Gregory and Judge Wilson joined.

ARGUED: Alan J. Cilman, Fairfax, Virginia; Marvin David Miller,
LAW OFFICE OF MARVIN D. MILLER, Alexandria, Virginia, for
Appellant.   Gregory Victor Davis, UNITED STATES DEPARTMENT OF
JUSTICE, Washington, D.C., for Appellee.     ON BRIEF:   Kathryn
Keneally, Assistant Attorney General, Frank P. Cihlar, Chief,
Criminal Appeals & Tax Enforcement Policy Section, Elissa Hart-
Mahan, Tax Division, Washington, D.C., Alexander R. Effendi, Tax
Division, UNITED STATES DEPARTMENT OF JUSTICE, Alexandria,
Virginia; Neil H. MacBride, United States Attorney, OFFICE OF
THE UNITED STATES ATTORNEY, Alexandria, Virginia, for Appellee.

Unpublished opinions are not binding precedent in this circuit.

                                2
DUNCAN, Circuit Judge:

      Richard Earl Jaensch was convicted by a federal jury of one

count of corruptly endeavoring to impede the due administration

of the tax laws under 18 U.S.C. § 7212(a), (“Count 1”), one

count of filing a false claim for a refund under 18 U.S.C. §

287, (“Count 2”), and four counts of willful failure to file a

tax return under 26 U.S.C. § 7203, (“Counts 3-6”).                                He was

sentenced      to    thirty-six    months’       imprisonment       and    two    years’

supervised release for Count 1, thirty-six months’ imprisonment

and   two   years’     supervised       release       for   Count    2,    and    twelve

months’ imprisonment and one year’s supervised release for each

of    Counts    3,    4,   5,    and    6.       All    sentences     were       to    run

concurrently for a total term of thirty-six months’ imprisonment

and two years’ supervised release.

      Jaensch appeals Counts 1 and 2 on substantive grounds and

appeals all of his convictions on the basis of evidentiary and

instructional errors.            For the reasons that follow, we vacate

Jaensch’s      conviction       under   Count    1,    affirm   as    to    all       other

counts and remand for rehearing of Count 1 and resentencing of

all counts.

                                             3
                                          I.

                                          A.

      Beginning in 2001, Jaensch stopped paying federal income

taxes.     Although he earned income as a self-employed plumber,

Jaensch did not file federal income tax returns for the taxable

years of 2002 through 2008.               Jaensch prevented the individuals

who hired him for plumbing projects from filing tax documents by

withholding       his   social      security    number.      He    joined   a    tax-

protestor      organization         and   attended      tax-protest       seminars.

Although     Jaensch      consulted       a     professional       accountant      who

informed    him    that       his   beliefs    concerning    his     liability     for

federal income taxes were meritless, he did not resume paying

his taxes.

      Based on his tax theories, Jaensch filed or caused his wife

to file a number of documents purporting to support his and her

tax-exempt statuses with state and federal agencies from 2005 to

2009.    Among other documents, on April 15, 2009, Jaensch filed a

tax   return   for      the    2008   taxable    year     claiming    a   refund    of

$774,052.00.       On July 22, 2009, the IRS sent Jaensch a letter

informing him that his refund claim was frivolous and that he

was required to submit a corrected tax return within 30 days to

avoid a civil penalty.                Jaensch submitted a second 2008 tax

return in August of 2009 reporting $113.00 in taxable income.

Jaensch was indicted on March 23, 2011.

                                          4
                                          B.

     Jaensch filed numerous pretrial motions seeking to dismiss

the indictment in whole and in part, to strike surplusage in the

indictment, and to admit witnesses as experts.                          The district

court denied Jaensch’s motions to dismiss, granted his motion to

strike   surplusage   from       Count    1,      and   disallowed     his    proposed

expert testimony.

     At trial, Jaensch objected to the district court’s decision

to admit evidence of his prior conviction for production of a

false identification document under 18 U.S.C. § 1028(a) and its

decision    to   exclude,       in   part,     the    lay   testimony    of    witness

Brandon Eggleston, one of Jaensch’s employers.                         Jaensch also

objected to the jury instructions on a number of grounds.                          The

district court overruled all of Jaensch’s objections, and this

appeal followed.

                                          II.

     Jaensch     raises     a    number      of      arguments   on    appeal.       He

challenges the district court’s refusal to dismiss Count 1 on

facial     and   as-applied          constitutional         grounds.          He   also

challenges the district court’s refusal to dismiss Count 2 on

the ground that the Government was estopped from prosecuting him

on that charge.     He argues that the district court’s evidentiary

rulings concerning his prior conviction and the exclusion of his

                                           5
lay     and     expert   witness   testimony       constituted     abuses   of

discretion.       Finally, he contends that the district court’s jury

instructions improperly stated and defined the elements of Count

1, improperly failed to give a good faith instruction on Count

2, and incorrectly defined good faith as it applied to Counts 1,

3, 4, 5, and 6.

      We review a challenge to the constitutionality of a statute

de novo.        United States v. Sun, 278 F.3d 302, 308 (4th Cir.

2002).        We review the district court's ruling on a motion to

dismiss an indictment de novo.              United States v. Al Sabahi, 719
F.3d 305, 309 (4th Cir. 2013).               We review evidentiary rulings

for abuse of discretion and “‘will only overturn an evidentiary

ruling that is arbitrary and irrational.’”                 United States v.

Cone, 714 F.3d 197, 219 (4th Cir. 2013) (quoting United States

v. Cloud, 680 F.3d 396, 401 (4th Cir. 2012)).                “[We] review a

district court's refusal to give a jury instruction for abuse of

discretion ... [however] we conduct a de novo review of any

claim    that     jury   instructions       incorrectly   stated   the   law.”

United States v. Mouzone, 687 F.3d 207, 217 (4th Cir. 2012)

(internal citations omitted).

                                        6
                                        III.

                                         A.

      We turn first to Jaensch’s conviction under Count 1 of the

indictment, charging a violation of 18 U.S.C. § 7212(a).                            Count

1 alleges Jaensch “did corruptly endeavor to obstruct and impede

the   due     administration       of   the      internal       revenue       laws    by

committing acts including but not limited to” those listed.                           The

indictment     then    lists     thirteen      acts     that    Jaensch       allegedly

committed in an attempt to obstruct or impede administration of

the   Internal       Revenue    Code.         Jaensch    assigns     a    number       of

substantive and procedural errors to this Count.                          Because we

conclude that Jaensch’s Count 1 conviction must be vacated on

the ground that the district court misstated the law in its jury

instructions, we need not address Jaensch’s remaining arguments.

      We    review    jury     instructions      “holistically”;          a   “‘single

instruction to a jury may not be judged in artificial isolation,

but must be viewed in the context of the overall charge.’”                           Noel

v. Artson, 641 F.3d 580, 586 (4th Cir. 2011) (quoting Henderson

v. Kibbe, 431 U.S. 145, 152 n.10 (1977)).                       We must determine

“‘whether the instructions construed as a whole, and in light of

the   whole     record,        adequately      informed        the   jury      of     the

controlling legal principles without misleading or confusing the

jury to the prejudice of the objecting party.’”                       Id. (quoting

                                         7
Bailey     v.    Cnty.    of   Georgetown,      94 F.3d 152,     156    (4th   Cir.

1996)).

       A   “failure      to    properly    instruct      on   an     element    of     the

offense     is    a     constitutional      error     subject        to    harmlessness

review.”        Bereano v. United States, 706 F.3d 568, 578 (4th Cir.

2013).     “We find an error in instructing the jury harmless if it

is ‘clear beyond a reasonable doubt that a rational jury would

have   found     the     defendant   guilty     absent      the    error.’”      United

States v. Ramos-Cruz, 667 F.3d 487, 496 (4th Cir. 2012) (quoting

Neder v. United States, 527 U.S. 1, 18 (1999)).

       In this case, the district court’s instruction on Count 1

misled the jury as to the controlling law and we cannot say that

the error was harmless.           To prove a violation of § 7212(a), “the

government       must    prove   that     the   defendant:        1)      corruptly;    2)

endeavored; 3) to obstruct or impede the administration of the

Internal Revenue Code.”            United States v. Wilson, 118 F.3d 228,

234 (4th Cir. 1997).              To act corruptly is to act “with the

intent to secure an unlawful benefit either for oneself or for

another.”       Id.

       The district court’s instructions do not properly explain

the Government’s burden to the jury.                 Violation of § 7212(a) is

a crime of specific intent.               A defendant must not only endeavor

to impede due administration but must do so with the specific

intent to secure an unlawful benefit.                  See Wilson, 118 F.3d at

                                           8
234.    Although     the    district    court     correctly     defined      “due

administration,”      “obstruct    or       impede,”    and   “corruptly,”     it

instructed the jury that it could convict Jaensch by finding

that he committed acts listed in the indictment without finding

that he committed those acts with the requisite intent to secure

an unlawful benefit.

       The jury instructions state, in relevant part, that:

       If the jury concludes that the government did prove
       beyond a reasonable doubt that one, the defendant
       employed at least one act set forth in Section 1-M
       through U of the indictment and that the defendant did
       commit an act identified in Section 1-V through Y of
       the indictment, and two, that the defendant acted
       knowingly and intentionally, then the jury must find
       the government [sic] guilty of the offenses in Count 1
       of the indictment.

J.A. 608.

       This   instruction     improperly       transforms     violation   of    §

7212(a) into a crime of general intent.                    The import of the

instruction as given is that the jury should convict if it finds

that Jaensch       committed acts listed in the indictment knowingly

and intentionally, not that he committed them for a specific

purpose or to achieve a specific result.

       The Count 1 instruction, when viewed in light of the entire

record, misled the jury as to the controlling legal principles

necessary to make its determination.                   Because Jaensch argued

that he acted in good faith, we cannot say beyond a reasonable

doubt that a rational jury would have convicted Jaensch under

                                        9
the stringent specific intent standard required by § 7212(a)

merely because it convicted him under a lesser general intent

standard.          Jaensch’s conviction under Count 1 of the indictment

will be VACATED and remanded for further proceedings. 1

                                        B.

        We turn next to Count 2 of the indictment.             Jaensch argues

that the district court erred by refusing to dismiss Count 2 on

the ground of promissory estoppel and by failing to give a good

faith instruction as to that count.

                                        i.

        Jaensch contends that the district court erred by refusing

to dismiss Count 2.            He argues that the Government was estopped

from prosecuting him for filing a false refund claim because the

letter he received from the IRS was an offer not to pursue

criminal penalties that became a binding contract when Jaensch

accepted it by abandoning his false claim and filing a corrected

return.       We disagree.

     The IRS letter makes no mention of any possible criminal

sanctions.          Contrary to Jaensch's arguments, it also does not

state       that   Jaensch's    misconduct   subjected   him   to   exclusively

        1
       We have considered whether the erroneous instruction in
Count 1 could have affected the remaining counts and have
concluded that it could not.     Jaensch has not argued that it
could have, nor could he convincingly do so on these facts.

                                        10
civil sanctions or that he would be relieved from all possible

sanctions     of   any    kind   by    filing    a    corrected   tax    return.

Therefore, the IRS letter cannot reasonably be read as an offer

or promise to forgo criminal prosecution, and the district court

did not err by refusing to dismiss Count 2 of the indictment on

the ground of promissory estoppel.

                                        ii.

        Jaensch also argues that the district court’s refusal to

give a good faith instruction on Count 2 constituted an abuse of

discretion.

     Jaensch’s argument is precluded by our precedent.                  Pursuant

to Count 2, the district court instructed the jury that the

Government was required to prove Jaensch submitted a claim “with

a knowledge that it was false and with a consciousness that he

was either doing something which was wrong or which violated the

law.”     J.A. 611.      In United States v. Maher, we held that § 287

includes a specific intent element, 2 and that                an essentially

identical    instruction     was      adequate   to   instruct    the   jury   on

specific intent.         582 F.2d 842, 847 (4th Cir. 1978).             “If the

     2
       As we recognized in United States v. Daughtry, the Maher
court adopted the specific intent requirement that the district
court read into the statute.     43 F.3d 829, 832 n.1 (4th Cir.
1995) (vacated on other grounds by Daughtry v. United States,
519 U.S. 984 (1995)).     Section 287 is silent on the intent
necessary to commit a violation, but we are bound by our
precedent to require proof of specific intent.

                                        11
district court gives adequate instruction on specific intent, a

separate instruction on good faith is not necessary.”                           United

States   v.   Mancuso,    42 F.3d 836,      847   (4th   Cir.     1994).     The

district court’s specific intent instruction was adequate and no

additional good faith instruction was required.                       The district

court, therefore, did not abuse its discretion by declining to

give the requested instruction. 3

                                         C.

     Jaensch    next     argues   that     the    district     court    abused    its

discretion in evidentiary rulings affecting the entire trial.

He contends that evidence of his prior conviction was improperly

admitted and that opinion testimony of a lay witness regarding

Jaensch’s     good   faith     defense    was     improperly     excluded. 4       We

address each argument in turn.

                                         i.

     Jaensch     contends      that      the     district     court     abused    its

discretion by admitting evidence of his prior conviction under

Federal Rule of Evidence 608 to impeach the testimony of his

wife.    Jaensch also contends that the evidence violated Rule 403

     3
        We have examined Jaensch’s remaining instructional
challenges as they relate to Counts 3-6 and find them to be
without merit.
     4
       We have examined Jaensch’s other evidentiary challenges
and find them to be without merit.

                                         12
because it was so prejudicial that it forced him to testify to

mitigate its impact.

      It is not clear from the record what Rule the district

court    relied         on        to    permit     evidence       of     Jaensch’s    previous

conviction to be entered.                   However, we may affirm on any ground

supported by the record.                   United States v. Moore, 709 F.3d 287,

293   (4th       Cir.   2013).            Contrary       to   Jaensch’s       contention    that

evidence of the conviction was improper character evidence under

Rule 404(a)(1), it was properly admitted under the exception in

Rule 404(a)(2)(A).                     Jaensch elicited testimony concerning his

trait of honesty, it was admitted, and the Government offered

evidence to rebut that testimony.                          See United States v. Moore,

27 F.3d 969, 974 (4th Cir. 1994) (holding that when a defendant

“‘opened the door’ by soliciting favorable opinions about his

character, the district court properly allowed the government to

rebut the offered testimony”).

      The    manner          of    proof    was    also       permissible.         Rule    405(a)

allows      an    admissible             trait    of     character       to   be   proven    “by

testimony about the person’s reputation.”                              On “cross-examination

of the character witness, the court may allow an inquiry into

relevant specific instances of the person’s conduct.”                                Id.     Here

the     district        court          permitted        Jaensch    to     elicit     reputation

testimony on cross-examination and the Government to challenge

                                                   13
that testimony using Jaensch’s conviction on redirect. 5                          Although

405(a) speaks of “cross-examination,” courts that have addressed

this       issue   have        permitted     evidence      of    specific     acts    to   be

admitted      on    redirect          in   service    of   the   Rule’s     intent.        See

United States v. Powell, 124 F.3d 655, 661 n.4 (5th Cir. 1997);

Gov't of V.I. v. Roldan, 612 F.2d 775, 778 n.2 (3d Cir. 1979)

(“Character evidence was introduced for the first time on cross-

examination.             For    the    purpose   of    rebuttal     of    this   evidence,

therefore,         the     Government's          redirect        examination     was       the

functional equivalent of the ‘cross-examination’ referred to in

rule 405(a).”); United States v. Grose, 461 F. App’x 786, 795-96

(10th Cir. 2012) (unpublished).

       Finally, the district court did not abuse its discretion

under      Rule    403    by     admitting     Jaensch’s        conviction.      Rule      403

prevents the admission of evidence only when its probative value

is “substantially outweighed by its prejudicial impact ‘in the

       5
       Jaensch also argues that his previous conviction should
not have been admitted because it was not for a specific intent
crime of dishonesty.    It is unclear what argument Jaensch is
making, but to the extent that he is arguing that the relevant
trait of character must be an essential element of the charge,
claim, or defense, this restriction applies only to evidence
admitted under Rule 405(b).      Moreover, in the past we have
permitted the Government to admit evidence of criminal acts
unrelated to dishonesty as such to rebut testimony that a
defendant’s “reputation is for being a man of honesty [and] law
abidingness.”   United States v. Wellons, 32 F.3d 117, 120 n.3
(4th Cir. 1994) (internal citations omitted).

                                               14
sense that it tend[s] to subordinate reason to emotion in the

factfinding process.’”         United States v. Gray, 405 F.3d 227, 240

(4th Cir. 2005) (quoting United States v. Queen, 132 F.3d 991,

997 (4th Cir. 1997)).           Jaensch’s prior crime is not of the

character to inflame the passions of jurors or to cause them to

disregard the facts of the case before them.                  See, e.g., United

States v. Basham, 561 F.3d 302, 331 (4th Cir. 2009).

                                      ii.

     Jaensch       argues    that    the     district        court    abused       its

discretion by excluding, in part, the lay testimony of Brandon

Eggleston.     Jaensch contends that he sought to introduce this

testimony    to    support     his   good    faith     defense       and   that     by

excluding it the court deprived him of his Sixth Amendment right

to present a defense.

     Rule 701 allows a lay witness to testify to an opinion that

is “rationally based on the witness’s perception,” is “not based

on ... specialized knowledge within the scope of Rule 702,” and

is “helpful to clearly understanding the witness’s testimony or

to determining a fact in issue.”                  Fed. R. Evid. 701(a)-(c).

“[U]nlike    the    expert   testimony      rule,    [Rule    701]    permits      lay

testimony relating to a defendant's hypothetical mental state.”

United States v. Offill, 666 F.3d 168, 177 (4th Cir. 2011).

     Jaensch       attempted    to   elicit       testimony      from      Eggleston

concerning   Eggleston’s       perception    of     Jaensch’s    sincerity        with

                                       15
regard to his beliefs about the tax laws.                        The district court

deemed       Eggleston’s     testimony      inadmissible          and       excluded      it,

stating      that   “I   think     the    jury    is   going     to    have       to    decide

whether or not they thought the witness is believable.                                  And I

don’t know that this witness can tell us what he thinks about

Mr. Jaensch.        He’s already told us he thought he was an honest

man.”     J.A. 292.

       The     district      court        applied        an     overly           restrictive

interpretation of Rule 701.                 Under Offill, Eggleston was not

prohibited from giving his opinion, based on his perceptions, of

Jaensch’s       sincerity     if    his     testimony          satisfied         the    three

conditions of Rule 701.              Because the district court held that

Rule 701 did not permit this kind of testimony, it did not

address whether Eggleston’s opinion would have been helpful to

the jury.

       Although the district court’s error of law constitutes an

abuse    of    discretion,       reversal    is    unwarranted         on    this      ground

because       the   error    was     harmless.            To    find        an     erroneous

evidentiary ruling harmless, “‘we need only be able to say with

fair     assurance,      after     pondering       all    that        happened         without

stripping the erroneous action from the whole, that the judgment

was not substantially swayed by the error.’”                          United States v.

Johnson,      617 F.3d 286,    292    (4th    Cir.       2010)    (quoting        United

States v. Brooks, 111 F.3d 365, 371 (4th Cir. 1997)).

                                            16
       Even if we assume that Eggleston’s testimony would have

been    helpful    to    the    jury   in   determining       the   subjective      good

faith      of   Jaensch’s      beliefs,     excluding   that      testimony     had    no

substantial effect on the judgment.                  Eggleston was permitted to

testify     to   all    of   the   statements       Jaensch      made    to   him   about

Jaensch’s beliefs and to his general perceptions of Jaensch’s

character.       Jaensch himself testified, 6 and both his wife and his

accountant       testified      that   they      believed   he    held    his   beliefs

sincerely.        Based on all of the information available to the

jury concerning the sincerity of Jaensch’s beliefs, it is clear

that the exclusion of Eggleston’s opinion was harmless.

                                            IV.

        For the foregoing reasons, we vacate Jaensch’s conviction

as to Count 1.          Finding no other prejudicial error, we affirm as

to all other counts.               The case is remanded for rehearing on

       6
       Jaensch also argues that the exclusion of Eggleston’s
testimony forced him to testify in order to establish his good
faith defense in violation of his Fifth Amendment right against
self-incrimination.    This claim is unavailing.    Jaensch also
argued that he was forced to testify because the district court
admitted his previous conviction.   The conviction was properly
admitted so following Jaensch’s own logic he would have
testified   regardless   of  the  court’s  decision    concerning
Eggleston’s testimony.

                                            17
Count   1   and   for   resentencing    on   all   counts   following   the

disposition of Count 1.

                                                        VACATED IN PART,
                                                   AFFIRMED IN PART, AND
                                              REMANDED WITH INSTRUCTIONS

                                   18