Court Opinion

ID: 866722
Source: CourtListenerOpinion
Date Created: 2013-05-06 15:08:45.250055+00
Date Added: 2024-06-11T09:06:45.172068
License: Public Domain

United States Court of Appeals
                             For the Eighth Circuit
                         ___________________________

                                 No. 12-2444
                         ___________________________

                              United States of America

                        lllllllllllllllllllll Plaintiff - Appellee

                                           v.

                                    John K. Perry

                       lllllllllllllllllllll Defendant - Appellant
                                       ____________

                     Appeal from United States District Court
                  for the Eastern District of Missouri - St. Louis
                                  ____________

                            Submitted: January 18, 2013
                               Filed: May 6, 2013
                                 ____________

Before LOKEN, MURPHY, and COLLOTON, Circuit Judges.
                           ____________

LOKEN, Circuit Judge.

      From 2001 through June 2004, John Perry was the Materials, Planning, and
Logistics Manager at Ford Motor Company’s Assembly Plant in Hazelwood,
Missouri. His duties included approving invoices for payment to various vendors that
provided logistical and transportation services. In 2011, Perry was charged with four
counts of willful income tax evasion in violation of 26 U.S.C. § 7201 for failing to
report and then concealing kickbacks received from Ford vendors during each of the
2001 through 2004 tax years. A jury convicted Perry on all counts after a six-day
trial. Following a lengthy sentencing hearing, the district court1 overruled most of
Perry’s objections to the tax loss calculations contained in the Presentence
Investigation Report (“PSR”) and sentenced him to 51 months in prison. Perry
appeals his conviction, raising statute of limitations and suppression issues, and his
sentence, arguing the district court erred in calculating tax loss, denying his request
for a downward variance, and requiring that he pay $926,602.75 in restitution to the
Internal Revenue Service (“IRS”) as a condition of supervised release. We affirm.

                        I. The Statute of Limitations Issue.

       Tax evasion is defined in § 7201 as willfully attempting “in any manner to
evade or defeat any tax imposed by this title or the payment thereof.” The elements
of this felony offense “are willfulness; the existence of a tax deficiency; and an
affirmative act constituting an evasion or attempted evasion of the tax.” Sansone v.
United States, 380 U.S. 343, 351 (1965) (citations omitted). “[A]ny conduct, the
likely effect of which would be to mislead or to conceal for tax evasion purposes, can
constitute an affirmative act of evasion.” United States v. Schoppert, 362 F.3d 451,
460 (8th Cir.) (quotations omitted), cert. denied, 543 U.S. 911 (2004); see United
States v. Silkman, 156 F.3d 833, 835 (8th Cir. 1998). Prosecution of this offense is
subject to the six-year statute of limitations in 26 U.S.C. § 6531(2).

       Perry was first indicted on March 24, 2011. Each count of the superseding
indictment charged that he willfully attempted to evade taxes by preparing and filing
a false and fraudulent federal income tax return for the year at issue, “and by making
false statements to an IRS Special Agent” in August 2006. The district court

      1
       The Honorable Audrey G. Fleissig, United States District Judge for the
Eastern District of Missouri.
                                         -2-
instructed the jury, without objection, that (i) the methods of evasion charged in each
count were filing false returns and making false statements to an IRS agent; (ii) the
jury must find unanimously that the government proved at least one of the methods
of evasion charged; and (iii) “at least one of the acts of evasion alleged in that count
occurred after March 24, 2005.”2

        On appeal, Perry argues the government introduced insufficient evidence that
he lied when IRS Special Agent Juli Ricchio interviewed him on August 26, 2006,
and therefore the counts charging willful attempts to evade taxes due for the 2001
through 2003 tax years were time-barred. Recounting that interview, Agent Ricchio
testified that Perry disclaimed any involvement in a fraudulent invoice scheme at Ford
and denied receiving cash payments or kickbacks from vendor Thomas Buske or his
companies. The government introduced evidence that Buske paid Ford manager
Perry substantial kickbacks in the form of cash and indirect payments for his role in
various fraudulent schemes, including cash payments of $18,000 to $25,000 per
month from 2001 to early 2004; purchase of a Jaguar and Lincoln Aviator for Perry
and his then-wife, Tammy; and payments for a costly addition to Perry’s home in
Lake St. Louis and for Perry’s purchase of two properties in Breckenridge, Colorado.
The government also introduced handwritten ledgers, found in Perry’s safe, that
divided illicit profits from specific inflated invoices between Buske and Perry.

       In addition to receiving kickbacks from Buske, the owners of a transportation
logistics company testified that Perry forced them to pay him $10,000 to $20,000 per
month to keep their contract with Ford, disguising the bribes as “consulting fees.”
Perry failed to report these kickbacks and bribes as income on his tax returns for the
2001 through 2004 tax years. By convicting Perry on all four counts, the jury

      2
       This interpretation of the six-year statute of limitations was consistent with the
decisions of many of our sister circuits. See United States v. Irby, 703 F.3d 280, 283-
84 (5th Cir. 2012), and cases cited; United States v. Dandy, 998 F.2d 1344, 1355-56
(6th Cir. 1993), cert. denied, 510 U.S. 1163 (1994).
                                          -3-
necessarily found that Perry lied to Agent Ricchio during the August 2006 interview
in a continuing attempt to evade his income tax liabilities. After careful review of the
trial record, we conclude there was more than sufficient evidence for a reasonable
jury to find beyond a reasonable doubt, with respect to each count, that Perry
committed an act of tax evasion within six years of the indictment.

                               II. Suppression Issues.

        Based on information provided by an employee of Buske’s company and by
Perry’s ex-wife, Tammy, Postal Inspector Michael Levinson applied for a warrant to
search a residence in Vermillion, Ohio, where Perry moved after the divorce. The
warrant issued and was executed on August 26, 2006. Agent Ricchio interviewed
Perry at the residence while federal agents completed the warrant search. Prior to
trial, Perry moved to suppress statements he made during that interview and evidence
seized during the search. He now appeals the district court’s denial of these motions
following separate evidentiary hearings.

          A. Perry first contends the district court erred in not suppressing, as
involuntary, statements he made during Agent Ricchio’s interview. “A statement is
involuntary when it was extracted by threats, violence, or express or implied promises
sufficient to overbear the defendant’s will and critically impair his capacity for self-
determination.” United States v. LeBrun, 363 F.3d 715, 724 (8th Cir. 2004) (en banc)
(quotations omitted), cert. denied, 543 U.S. 1145 (2005). We review the district
court’s fact findings for clear error and its legal conclusion that the statements were
voluntary de novo. Id.

       At the suppression hearing, Agent Ricchio testified that she interviewed Perry
in the dining room after being told by another agent that Perry said he wanted a
lawyer when he first answered the door. Agent Ricchio told Perry he was free to
leave or stay during the warrant search and, when he chose to stay, that she would not

                                          -4-
question him because he wanted an attorney but would explain why the agents were
there. She explained they were investigating fraud against Ford Motor Company, and
they believed Perry had used his position at Ford to approve fraudulent invoices.
Perry testified that he immediately told the agents he wanted an attorney when he first
answered the door, then refused to talk to Agent Ricchio despite her repeated attempts
to ask questions, and finally agreed to talk only after she told him that he was not the
main target of their investigation. The district court found that Agent Ricchio
truthfully advised Perry of the reason for the search and that he was a subject of their
investigation. The court concluded that, even if Perry was told he was not a target,
his “will was not overborne and any such representations would not be sufficient to
require a suppression of [his] statements.”

       On appeal, Perry argues his statements should have been suppressed because
Agent Ricchio “was inaccurate, mistaken, wrong or untruthful . . . at the motion
hearing and then at trial.” The district court’s finding that Agent Ricchio did not
deceive Perry was an assessment of her credibility that was not clearly erroneous. In
addition, we agree with the court’s conclusion that any deception regarding whether
Perry was a target of the investigation did not render his statements involuntary. See
United States v. Brave Heart, 397 F.3d 1035, 1041 (8th Cir. 2005); LeBrun, 363 F.3d
at 724. Agent Ricchio did not make threats, display her weapon, raise her voice, or
promise Perry he would not be arrested or prosecuted. Perry was an educated and
sophisticated 50-year-old Ford manager who gave every indication he understood the
nature of the investigation and Agent Ricchio’s questions.

      B. In a separate pretrial motion, Perry requested a hearing under Franks v.
Delaware, 438 U.S. 154 (1978), alleging that Inspector Levinson’s warrant affidavit
contained materially false information. In support, Perry submitted an affidavit
challenging the accuracy and relevance of Levinson’s recitation of information
conveyed by Tammy and the other informant. The district court denied the motion,
concluding that Perry failed to make a “substantial preliminary showing of deliberate

                                          -5-
falsehood or reckless disregard for the truth.” United States v. Carnahan, 684 F.3d
732, 735 (8th Cir.) (quotations omitted), cert. denied, 133 S. Ct. 625 (2012). On
appeal, Perry argues it was error to deny a Franks hearing because the allegations in
Levinson’s warrant affidavit were refuted by Perry’s affidavit. We review the denial
of a Franks hearing for abuse of discretion. United States v. Moore, 129 F.3d 989,
992 (8th Cir. 1997), cert. denied, 523 U.S. 1067 (1998). Merely averring that a
warrant affidavit contained false information is not sufficient. “When no proof is
offered that an affiant deliberately lied or recklessly disregarded the truth, a Franks
hearing is not required.” Id. There was no abuse of discretion.

                              III. Sentencing Issues.

      A. Tax Loss Calculations. To reflect the seriousness of a willful tax evasion
offense, the advisory guidelines increase the base offense level by the amount of the
“tax loss,” that is, “the total amount of loss that was the object of the offense,”
including interest, as reflected in the guidelines Tax Loss Table. See U.S.S.G.
§§ 2T1.1(a)(1), (c)(1), comment. (n.1), and 2T4.1. Consistent with IRS calculations,
the amended PSR reported that Perry willfully failed to report $1,594,329 in gross
income in the 2001-2004 tax years, resulting in a total tax loss of $926,602 --
$578,226 in unpaid income taxes plus $348,376 in interest. This produced a base
offense level of 20. See § 2T4.1(H) (tax loss of more than $400,000 and not more
than $1,000,000). The district court then imposed two two-level enhancements under
§ 2T1.1(b)(1) and (2), resulting in an advisory range of 51 to 63 months in prison.

       At sentencing, Perry raised a plethora of fact-intensive objections to this tax
loss computation. Relying on evidence presented at trial, the district court overruled
most but not all of Perry’s objections. On appeal, Perry argues the district court
clearly erred in not deducting from the gross amount of unreported taxable income
(i) up to $500,000 Perry “may have contributed” to a scheme to defraud a Ford
vendor; (ii) $131,500 paid by Buske for the addition to Perry’s Lake St. Louis home

                                         -6-
and payments Buske made toward two Colorado properties because they were loans
Perry intended to repay; (iii) the new Jaguar purchased by Buske because it was
income only to Tammy; (iv) cash payments by Buske for a boat lift and a Lincoln
Aviator that were double-counted; and (v) $12,000 in other payments that were not
proved at trial.

       A district court may rely on evidence presented at trial, and its “factual findings
regarding the amount of tax loss will be upheld unless clearly erroneous.” United
States v. Willis, 277 F.3d 1026, 1035 (8th Cir. 2002). We are satisfied that the
district court’s tax loss findings were not clearly erroneous. But in any event, we
need not consider these issues because Perry makes no showing that the items in
question -- individually or in combination -- would have lowered his base offense
level by reducing the net tax loss from $926,602 to less than $400,000.3

       B. Reasonableness of the 51-Month Sentence. At sentencing, Perry moved
for a downward departure under U.S.S.G. § 5K2.20 for aberrant criminal behavior
and urged the district court to grant a downward variance and sentence him to a term
of probation or a prison sentence substantially below the bottom of the advisory
guidelines range. After carefully balancing mitigating factors such as Perry’s age and
lack of a criminal record with the seriousness of the offense, the many victims, and
Perry’s steadfast refusal to accept responsibility for his greedy actions, the district
court concluded that a sentence at the bottom of the advisory range will “provide
adequate deterrence, protect the community, achieve parity with the sentences of
similarly situated individuals and possibly allow you to be released from prison at a
time when you will be able . . . to provide restitution.” On appeal, Perry argues this

      3
       Perry also argues, without citation to authority, that the amount of tax loss
should have been submitted to the jury and should not include interest. These
contentions are without merit. See United States v. Tucker, 217 F.3d 960, 961 (8th
Cir. 2000) (the government must prove fact-intensive issues such as tax loss by a
preponderance of the evidence at sentencing); U.S.S.G. § 2T1.1 comment. (n.1).
                                           -7-
sentence is substantively unreasonable because “he should not be in prison for this
length of time for this kind of offense.”4 A sentence within the guidelines range is
presumptively reasonable on appeal. See, e.g., United States v. Borromeo, 657 F.3d
754, 756 (8th Cir. 2011). Here, nothing in the record convinces us that the district
court abused its considerable discretion in fashioning an appropriate sentence. See
United States v. Feemster, 572 F.3d 455, 464 (8th Cir. 2009) (en banc).

       C. Restitution Issues. The sentence imposed by the district court included,
as a special condition of supervised release, an order that Perry pay restitution to the
IRS, as the victim of his tax evasion offense, the amount of the tax loss determined
by the court in determining the advisory guidelines range -- $926,602.75, consisting
of $578,226 in total tax deficiencies for the four tax years in question plus
$348,376.75 in interest. Perry does not challenge the calculations underlying this
amount but raises a number of legal issues on appeal.

       1. Perry contends the restitution order must be vacated because the Victim and
Witness Protection Act (“VWPA”) and the Mandatory Victims Restitution Act
(“MVRA”) do not apply to Title 26 offenses. See 18 U.S.C. §§ 3663(a)(1)(A),
3663A(c)(1). However, as many circuits have noted, Congress has explicitly granted
district courts discretionary authority to “make restitution to a victim of the offense”
a condition of supervised release, without regard to whether the defendant committed
an offense enumerated in §§ 3663(a)(1)(A) or 3663A(c)(1). See 18 U.S.C.
§§ 3563(b)(2), 3583(d), 3556; United States v. Hassebrock, 663 F.3d 906, 923-25
(7th Cir. 2011) (collecting cases), cert. denied, 132 S. Ct. 2377 (2012); U.S.S.G.
§ 5E1.1(a)(2). Here, unlike the record on appeal that caused a remand in Hassebrock,

      4
       Perry does not appeal the denial of his motion for a downward departure, and
rightly so. “A district court’s refusal to grant a downward departure under the
sentencing guidelines is unreviewable unless the court had an unconstitutional motive
in denying the request or failed to recognize that it had the authority to depart
downward.” United States v. Dixon, 650 F.3d 1080, 1084 (8th Cir. 2011).
                                          -8-
the district court made clear that restitution was being ordered as a condition of
Perry’s supervised release, not pursuant to the VWPA or the MVRA.5

       2. Perry contends that the district court lacked statutory authority to include
$348,376.75 in interest in the restitution order. We disagree. In fashioning a
restitution order, the district court must “order restitution to each victim in the full
amount of each victim’s losses . . . .” 18 U.S.C. § 3664(f)(1)(A) (emphasis added),
a statute made applicable to restitution ordered as a special condition of supervised
release by 18 U.S.C. § 3556. Federal tax law imposes interest on tax delinquencies
to compensate the government for the time-value of its loss. See 26 U.S.C. § 6601.
Accordingly, the district court did not abuse its discretion by including interest in a
restitution order intended to compensate the IRS as a victim for the full amount of its
losses from Perry’s evasion of income taxes owed for the 2001-2004 tax years.
Accord United States v. Ellefsen, 655 F.3d 769, 782 (8th Cir. 2011) (affirming a
restitution award to the IRS that included interest); Hassebrock, 663 F.3d at 926
(same); United States v. Qurashi, 634 F.3d 699, 703-04 (2d Cir. 2011).6

      3. As part of its broader investigation of Buske’s alleged schemes to defraud
Ford and other victims, the government seized approximately $660,000 from Perry’s

      5
       Another way to impose essentially the same special condition is to require that
the defendant while on supervised release comply with the tax laws and cooperate
with the IRS by filing tax returns and paying amounts due. As this type of condition
is not an order of restitution, United States v. Miller, 557 F.3d 919, 921 (8th Cir.
2009), remedies for non-compliance may not be subject to the strictures of 18 U.S.C.
§ 3613A(a)(2), which produced complex fact issues in cases such as United States v.
Holt, 664 F.3d 1147, 1150 (8th Cir. 2011), cert. denied, 132 S. Ct. 1981 (2012).
      6
       Perry’s further contention that interest could not be included because the
government did not present evidence of the interest owing at trial is without merit.
The amount of restitution is a sentencing issue that the government must prove at
sentencing by a preponderance of the evidence. See Ellefsen, 655 F.3d at 782.
                                          -9-
TD Ameritrade account in January 2007 and initiated a civil action in the Eastern
District of Wisconsin to forfeit the funds as proceeds of a money laundering
conspiracy involving Perry and Buske. See 18 U.S.C. § 981(a)(1)(A). At sentencing,
Perry argued that the seized funds should offset his restitution liability. At that time,
the forfeiture action was stayed pending resolution of the government’s criminal
prosecution of Perry.7

       Responding to this contention, the government represented that, should it
prevail in the forfeiture action, it would use the seized funds to compensate the
victims of Perry’s fraudulent schemes, so no double recovery by the United States
would occur. Government counsel advised that the seized funds were being held in
an interest-bearing account but could not assure the court that all interest earned
would also go to the victims, not to the government. After hearing argument on the
issue, the court denied Perry’s request for an offset because no offset would be
warranted if the Wisconsin court determines that the funds are “properly forfeited and
are used to pay restitution toward victims,” or if the government’s forfeiture action
is dismissed and the funds “come back to Mr. Perry.” Regarding the uncertain
interest issue, the court’s order provided that any interest ultimately retained by the
government would offset the interest portion of Perry’s restitution obligation. Perry
appeals the court’s denial of his offset request.

      The question whether funds forfeited to the government should offset a
criminal restitution order to the government as victim in order to avoid a double
recovery raises complex and difficult issues of law and fact that are not properly
addressed in the abstract. Compare United States v. Ruff, 420 F.3d 772, 776 (8th
Cir. 2005), with United States v. Taylor, 582 F.3d 558, 566 (5th Cir. 2009), cert.

      7
      See United States v. Approximately $659,990.83 in U.S. Currency in TD
Ameritrade Account Ending in 0902 Held in the Name of John K. Perry, Case No.
2:07-CV-00264, Order Granting Motion to Stay (E.D. Wis. Mar. 20, 2008).
                                          -10-
denied, 130 S. Ct. 1116 (2010), and United States v. Emerson, 128 F.3d 557, 567-68
(7th Cir. 1997). Here, as the district court wisely noted, the civil forfeiture action is
pending, and therefore whether the seized funds will ultimately be forfeited, and if
so, where they will be distributed, is unknown. Moreover, the sentencing record does
not clarify the basis for the government’s forfeiture action, which likely was not
Perry’s income tax evasion, or the source of the funds seized, or whether any part of
those funds were unreported income that increased Perry’s restitution liability. Thus,
Perry’s allegation of double recovery is entirely speculative and his request for an
offset was properly denied, even if an offset would be appropriate to avoid double
recovery by the IRS or by the United States government, an issue we decline to
address. All such questions must await final resolution of the forfeiture action or
enforcement of the restitution order, at which time the district court will retain
authority to modify the amount of restitution as may be appropriate. See 18 U.S.C.
§ 3664(j)(2); United States v. Manzer, 69 F.3d 222, 230-31 (8th Cir. 1995).

        4. Finally, Perry argues the district court should have “split” his restitution tax
liability because it is “grossly unfair” to permit ex-wife Tammy to reap more than half
the benefits from their joint tax evasion in the subsequent divorce, while making
Perry repay the IRS’s entire loss. This is not an issue of law because the restitution
statutes only grant authority to “apportion liability” among multiple defendants, and
Tammy was not a co-defendant. See 18 U.S.C. § 3664(h). Therefore, we question
whether the district court had discretion to order Perry to pay an amount of restitution
less than the IRS’s entire tax loss; joint filers are jointly and severally liable for
income tax deficiencies. See 26 U.S.C. § 6013(d)(3). But even if the court had such
discretion, it was not abused. Noting that the IRS may seek recovery of taxes owed
from either Tammy or Perry, the district court eliminated any risk of double recovery
by expressly providing that “[t]he restitution amount attributable to the tax deficiency

                                           -11-
shall be reduced by any portion of the tax deficiency received by the Internal Revenue
Service from Tammy Perry, Mr. Perry’s ex-wife.” That was an eminently fair ruling.

      The judgment of the district court is affirmed.
                     ______________________________

                                        -12-