Court Opinion

ID: 2898092
Source: CourtListenerOpinion
Date Created: 2015-09-08 20:00:53.514078+00
Date Added: 2024-06-11T15:16:20.808254
License: Public Domain

In the

    United States Court of Appeals
                 For the Seventh Circuit
No. 14-3515

UNITED STATES OF AMERICA,
                                                   Plaintiff-Appellee,

                                  v.

EUGENE CLARKE, also known as
Imhotep Bey, also known as Eugene
Clark, Jr.,
                                                Defendant-Appellant.

         Appeal from the United States District Court for the
          Northern District of Indiana, Hammond Division.
         No. 2:13-cr-00139-RL-JEM-1 — Rudy Lozano, Judge.

    ARGUED MAY 28, 2015 — DECIDED SEPTEMBER 8, 2015

   Before BAUER, EASTERBROOK, and RIPPLE, Circuit Judges.
    BAUER, Circuit Judge. On June 2 and 3, 2014, defendant-
appellant, Eugene Clarke, stood trial for seven counts of filing
a false claim with the United States in violation of 18 U.S.C.
§ 287. At the close of the government’s evidence, Clarke moved
for judgment of acquittal under Federal Rule of Criminal
Procedure 29, arguing that the government failed to present
2                                                    No. 14-3515

any evidence that he knew the claims he presented were false.
The district court denied the motion. Clarke also requested a
jury instruction on good faith, which the district court also
denied. The jury ultimately convicted him on all counts. Clarke
now appeals his conviction, as well as the district court’s ruling
on the jury instruction.
                      I. BACKGROUND
    In August 2009, Clarke submitted federal tax returns for the
“Eugene Clarke Trust” for tax years 2006, 2007, and 2008. Each
return claimed that the trust had received $900,000 in income
and expended $900,000 in fiduciary fees, but did not identify
a particular source for the income. Each return further reported
that $300,000 of federal tax had been withheld and paid over
to the Internal Revenue Service (“IRS”), and each therefore
requested $300,000 in refunds. Clarke identified the trust’s
fiduciary as “Timothy F. Geither” (an apparent misspelling of
the name of then-Secretary of the Treasury, Timothy Geithner),
which raised a red flag at the IRS regarding the legitimacy
of the returns. As a result, the IRS notified Clarke that the
returns were considered frivolous and would not be processed.
Undeterred, Clarke resubmitted the returns for years 2006,
2007, and 2008 in December 2009. The returns again asked that
the “Eugene Clarke Trust” be refunded $300,000 for each year,
but did not name “Geither” as the fiduciary of the trust.
Astonishingly, the IRS processed all three returns and mailed
Clarke three $300,000 checks on January 5, 2010.
   Four days after receiving the checks, Clarke attempted to
cash one of them at PLS Check Cashers in Gary, Indiana.
Suspicious of the validity of the check, district manager
No. 14-3515                                                     3

Stephen Eyabi questioned Clarke about how he obtained it.
Clarke explained that the check was given to him out of a trust
fund from his deceased father. Eyabi then gave Clarke a partial
payment of $2,500 with the understanding that Clarke would
receive the remaining amount after the check cleared (less the
5-10% check cashing fee).
    Before the check cleared, Clarke returned the $2,500 and
took the check back. On January 12, 2010, Clarke opened a
bank account with Harris Bank and deposited one of the
$300,000 checks. He deposited the second check into the
account on January 13, 2010, and the third on February 24,
2010. Within months of depositing the checks, Clarke spent all
of the funds.
    It was not until 2013 that Clarke was indicted in connection
with the three fraudulent refunds. On November 21, 2013,
Clarke was charged with a total of seven counts of presenting
false claims to the United States through the IRS.
    Clarke pleaded not guilty to the charges against him and
the case proceeded to trial. The government put on three
witnesses. Kristy Morgan, a Court Witness Coordinator for the
IRS, testified regarding the IRS’s process for examining tax
returns. She also testified that whoever signed a tax return
form was declaring that the return contained information that
was true and correct. Gerard Hatagan, a Revenue Agent for the
IRS, testified that although a trust could be drawn up and not
funded, as was Clarke’s alleged fund, Clarke’s return lacked
some degree of economic reality. Lastly, Stephen Eyabi, the
district manager of the check cashing company where Clarke
tried to cash his first $300,000 check, testified that Clarke told
4                                                             No. 14-3515

him that he came to possess the check because of “a trust fund
because his dad had passed.”
    At the close of the government’s evidence, Clarke moved
for acquittal pursuant to Rule 29, arguing that the government
had not proven one of the elements of the offense—that the
defendant knew the claim was false. The district court denied
Clarke’s motion for acquittal, on the ground that there was
sufficient evidence from which a jury could reasonably find
Clarke guilty on all counts.
    After the parties rested, the district court distributed the
proposed jury instructions, which did not include a good faith
instruction that Clarke had requested prior to trial.1 Objecting
to the omission, Clarke argued that the instruction comple-
mented the instruction on the elements of an 18 U.S.C. § 287
offense. When asked whether he presented any evidence of
good faith, Clarke responded that it was the government’s
burden to prove there was no good faith. The government
disagreed and argued that the good faith instruction submitted
related to willfulness, which is not an element of a § 287
offense. The district court denied the instruction and gave the
following instruction instead:
      A person acts knowingly if he realizes what he is
      doing and is aware of the nature of his conduct, and

1
   Clarke had argued that the instruction was appropriate because he had
a good faith belief that the government owed him the money he received.
Though barred from trial pursuant to the government’s motion in limine,
a pretrial psychiatric report explained that Clarke was of the belief that the
United States is a business front designed to regulate commerce and has
established bank accounts in the names of its citizens.
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     does not act through ignorance, mistake, or accident.
     In deciding whether the defendant acted knowingly,
     you may consider all of the evidence, including
     what the defendant did or said.
   Thereafter, the jury convicted Clarke on all counts.
                       II. DISCUSSION
   Clarke raises two challenges on appeal. First, he argues that
the district court erred in denying his motion for judgment of
acquittal because the government failed to present any
evidence of an essential element of the charges against him.
Second, he argues that the district court erred in rejecting his
good faith jury instruction. We review each argument in turn.
   A. Sufficiency of the Evidence
    Clarke first argues that the district court erred when it
denied his motion for judgment of acquittal. We review a
district court’s decision to deny a motion for judgment of
acquittal de novo. United States v. Westerfield, 714 F.3d 480, 484
(7th Cir. 2013). “In considering challenges to the sufficiency of
the evidence, we ‘view the evidence in the light most favorable
to the prosecution,’ and then ‘ask whether any rational trier of
fact could have found the essential elements of a crime beyond
a reasonable doubt.’” United States v. Foley, 740 F.3d 1079,
1082–83 (7th Cir. 2014) (quoting United States v. Boender, 649
F.3d 650, 654 (7th Cir. 2011)). We will overturn a guilty verdict
only if the record is devoid of evidence from which a reason-
able jury could find guilt beyond a reasonable doubt. United
States v. Groves, 470 F.3d 311, 323 (7th Cir. 2006).
6                                                      No. 14-3515

    The indictment charged Clarke with violating 18 U.S.C.
§ 287. The statute provides in pertinent part:
       Whoever makes or presents to any person or
       officer in the … service of the United States, or
       to any department or agency thereof, any claim
       upon or against the United States, or any depart-
       ment or agency thereof, knowing such claim to
       be false, fictitious, or fraudulent, shall be impris-
       oned not more than five years and shall be
       subject to a fine … .
Thus, to convict Clarke, the government bore the burden of
proving that (1) Clarke presented claims to the IRS; (2) those
claims were false, fictitious, or fraudulent, and (3) Clarke knew
the claims were false, fictitious, or fraudulent. See United States
v. Haddon, 927 F.2d 942, 950–51 (7th Cir. 1991).
    Only the third element is in dispute. According to Clarke,
the government did not prove that he knew his claim was false
because it failed to put forth evidence that Clarke willfully
presented false claims. Clarke claims that he had a good faith
belief that the money he requested from the IRS belonged to
him, and without evidence of willfulness negating that belief,
the government cannot meet its burden of proof.
    Contrary to Clarke’s contention, the government need not
prove willfulness in a § 287 case. United States v. Catton, 89 F.3d
387, 392 (7th Cir. 1996); see also United States v. Ferguson, 793
F.2d 828, 831 (7th Cir. 1986). In Catton, we stated “[i]t is implicit
in the filing of a knowingly false claim that the claimant
intends to defraud the government, and hence unnecessary to
charge willfulness separately.” 89 F.3d at 392. The government
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need only prove that Clarke made a claim upon the United
States knowing that the claim was false. Ferguson, 793 F.2d at
831.
    The government has presented sufficient proof that Clarke
knew his claims were false; Clarke’s tax returns demonstrate
that knowledge on their face. The returns listed $900,000 in
income, without identifying how this income was obtained.
The fiduciary fees listed on the returns were also in the amount
of $900,000, but with no explanation for why a fiduciary, in
this case “Timothy F. Geither,” would take such a fee. Finally,
the returns claimed withholding of $300,000, but no such funds
were ever withheld. We have held before that “patently false
and utterly groundless” tax return forms were sufficient to
demonstrate the defendant’s knowledge of the falsity of her
claims in violation of 18 U.S.C. § 287. Ferguson, 793 F.2d at 831.
In Ferguson, the defendant filed several forms to the IRS
seeking tax refunds for taxes she paid, as well as taxes with-
held by her employer. 793 F.2d at 831. We concluded that the
“forms on their face demonstrate [the defendant’s] knowledge
of the falsity of her claims,” where the name on one form
reflected her efforts to gain a refund through her baseless
interpretation of tax laws and where some of the forms
reflected a refund for a tax that the defendant was never
required to pay. Id. Clarke’s claims are similarly groundless.
Because the information on Clarke’s tax returns was “patently
false and utterly groundless, id., Clarke’s forms provide
sufficient evidence for a jury to conclude Clarke knew the
falsity of his claims.
8                                                    No. 14-3515

    B. Jury Instruction
    Clarke also contends that the district court erred in declin-
ing to give his proposed good faith jury instruction. We review
a district court’s refusal to give a jury instruction for an abuse
of discretion. United States v. Morris, 576 F.3d 661 (7th Cir.
2009).
   A good faith theory is “essentially a claim that the defen-
dant did not act willfully.” United States v. Kokenis, 662 F.3d
919, 930 (7th Cir. 2011) (citations omitted). An instruction on
such a theory is therefore unnecessary where willfulness is not
an element of the offense charged. As discussed above,
willfulness is not an element of a § 287 claim. See Catton, 89
F.3d at 392; Ferguson, 793 F.2d at 831. Therefore, Clarke was not
entitled to an instruction on good faith and the district court
did not abuse its discretion in denying it.
                      III. CONCLUSION
    For the aforementioned reasons, we AFFIRM the judgment
of the district court and Clarke’s conviction.