Filed: Mar. 15, 2017
Latest Update: Mar. 03, 2020
Summary: NOT PRECEDENTIAL UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT _ No. 15-3960 _ UNITED STATES OF AMERICA v. COURTNEY JOHNSON, Appellant _ Appeal from the United States District Court for the District of New Jersey (D.C. Criminal Action No. 3-13-cr-00417-001) District Judge: Honorable Anne E. Thompson _ Submitted Under Third Circuit LAR 34.1(a) January 17, 2017 Before: AMBRO, VANASKIE, and SCIRICA, Circuit Judges (Opinion filed: March 15, 2017) _ OPINION* _ AMBRO, Circuit Judge * This dispo
Summary: NOT PRECEDENTIAL UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT _ No. 15-3960 _ UNITED STATES OF AMERICA v. COURTNEY JOHNSON, Appellant _ Appeal from the United States District Court for the District of New Jersey (D.C. Criminal Action No. 3-13-cr-00417-001) District Judge: Honorable Anne E. Thompson _ Submitted Under Third Circuit LAR 34.1(a) January 17, 2017 Before: AMBRO, VANASKIE, and SCIRICA, Circuit Judges (Opinion filed: March 15, 2017) _ OPINION* _ AMBRO, Circuit Judge * This dispos..
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NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
________________
No. 15-3960
________________
UNITED STATES OF AMERICA
v.
COURTNEY JOHNSON,
Appellant
________________
Appeal from the United States District Court
for the District of New Jersey
(D.C. Criminal Action No. 3-13-cr-00417-001)
District Judge: Honorable Anne E. Thompson
________________
Submitted Under Third Circuit LAR 34.1(a)
January 17, 2017
Before: AMBRO, VANASKIE, and SCIRICA, Circuit Judges
(Opinion filed: March 15, 2017)
________________
OPINION*
________________
AMBRO, Circuit Judge
*
This disposition is not an opinion of the full Court and pursuant to I.O.P. 5.7 does not
constitute binding precedent.
Following a jury trial, Courtney Johnson, a certified public accountant, was
convicted of six counts of aiding and assisting in the preparation of false federal income
tax returns in violation of 26 U.S.C. § 7206(2). The District Court imposed a sentence of
48 months’ imprisonment, one year of supervised release, a $50,000 fine, $10,280 in
restitution, and a $600 special assessment. Johnson raises six issues on appeal. Three
concern his indictment, trial, and conviction; the other three relate to his sentence. We
address each in turn.
None of Johnson’s arguments about the process leading to his conviction are
persuasive. However, at least one of the objections to his sentence is. Accordingly, we
affirm Johnson’s conviction but vacate his sentence and remand for resentencing.
I. STATUTE OF LIMITATIONS
Johnson contends that several of the charges relating to tax returns he prepared
and submitted to the Internal Revenue Service on April 15, 2008, were filed after the
applicable statute of limitations had run. Our review of the District Court’s interpretation
of the statute of limitations is plenary. United States v. Midgley, 142 F.3d 174, 176 (3d
Cir. 1998). However, “the statute of limitations does not go to the jurisdiction of the court
but is an affirmative defense that will be considered waived if not raised in the district
court before or at trial.” United States v. Karlin,
785 F.2d 90, 92–93 (3d Cir. 1986);
Musacchio v. United States,
136 S. Ct. 709, 717 (2016) (statute of limitations “is a
defense that becomes part of a case only if the defendant presses it in the district court”).
In his pretrial motion, Johnson argued that “the statute of limitations bars [him]
being prosecuted for any allegedly fraudulent tax return before June 19, 2007.” J.A. 42
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(emphasis in original); see also Suppl. App. 56-57 (restating the same at motions
hearing). On appeal, Johnson contends that the statute of limitations should have
precluded his prosecution for aiding and assisting the filing of false income tax returns on
April 15, 2008. The Government argues that Johnson has failed to “make the same
argument in the District Court that he makes on appeal,” United States v. Joseph, 730
F.3d 336, 341 (3d Cir. 2013), and thus has waived it.
We need not, however, reach the question of whether Johnson’s reference to an
earlier cut-off date was enough to preserve his current argument because all relevant
charges were timely filed. The four counts Johnson questions relate to tax returns filed on
April 15, 2008. Those counts have an applicable statute of limitations of six years, 26
U.S.C. § 6531(3), which began to run when the returns were filed, U.S. v. Habig, 390
U.S. 222, 223 (1968), and would ordinarily have expired on April 15, 2014. However,
Johnson agreed to toll the limitations period for 175 days, until October 7, 2014. Suppl.
App. 24-29. The Government filed its initial Indictment on June 19, 2013 and a
Superseding Indictment on June 11, 2014. Thus, both were filed within the limitations
period as extended by the tolling agreement.
Yet Johnson contends that, when the Government filed a Second Superseding
Indictment after October 7, 2014, the charges against him became barred as untimely.
When “the government has filed a superseding indictment, the day on which the original
indictment was filed controls for statute of limitation purposes, provided that . . . the
superseding indictment does not materially broaden or substantially amend the
charges[.]” United States v. Oliva, 46 F.3d 320, 324 (3d Cir.1995); United States v.
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Friedman, 649 F.2d 199, 204 (3d Cir. 1981) (“a superseding indictment returned while
the original indictment is validly pending is not barred by the statute of limitations if it
does not expand the charges made in the initial indictment”). Thus, charges in the Second
Superseding Indictment relate back to those in the previous Indictments, unless the later
Indictment “materially broaden[ed] or substantially amend[ed] the charges” against
Johnson.
Oliva, 46 F.3d at 324. He contends that it did.
Johnson points to several differences between the Second Superseding Indictment
and the prior Indictments. Not one is compelling. First, he notes that the Second
Superseding Indictment added two new counts of aiding and assisting in preparation of a
false return. But these two counts arose from tax returns filed on April 15, 2010, and their
statute of limitations had not run. They were timely regardless whether they related back
to the previous Indictments.
Second, he notes that the Second Superseding Indictment expanded the time
period of a conspiracy charge that appeared in all three Indictments and added additional
factual allegations about the conspiracy. Johnson, however, was not convicted of
conspiracy, so even if the last Indictment materially broadened the scope of that charge,
its inclusion was harmless. See United States v. Atiyeh, 402 F.3d 354, 373 (3d Cir. 2005)
(inclusion of time-barred charges in charging document did not affect verdict on other
charges when defendant did not identify evidence submitted on time-barred charges that
would have been inadmissible on other charges).
Third, the Second Superseding Indictment added allegations that Johnson’s tax
preparation business, “Johnson & Associates[,] was owned and operated by defendant
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Courtney Johnson and [his wife] defendant Carol Johnson,” and that the Johnsons, as
professional tax preparers, had obtained tax preparer identification numbers from the
IRS. J.A. 30-31. Addition of these contextual facts did not amend or broaden any
charges.
The same is true for Johnson’s fourth objection that the Second Superseding
Indictment alleged a tax loss to the Government “in excess of $400,000,” J.A. 37, while
the previous Indictment alleged “a tax loss of approximately $400,000,” J.A. 24.
Finally, Johnson’s last argument—that the Second Superseding Indictment added
allegations about Refund Anticipation Loans used by Johnson and his clients—also fails.
Johnson makes no attempt to explain how including this additional information
materially broadened or substantially amended the four counts of aiding and assisting the
filing of false income tax returns on April 15, 2008. Accordingly, those counts are timely.
II. JURY INSTRUCTIONS
Johnson next argues that the District Court abused its discretion by failing to give
an instruction cautioning the jury against reliance on the testimony of potential
accomplices or co-conspirators. Specifically, he claims that the taxpayers whose returns
he prepared could be accomplices or co-conspirators because they signed forms attesting
to the accuracy of their tax returns.
When a defendant has raised the issue before the trial court, “[w]e review a district
court’s refusal to give a certain instruction for abuse of discretion[.]” United States v.
Powell, 693 F.3d 398, 406 n.9 (3d Cir. 2012). But where, as here, the defendant failed to
request the jury instruction he now presses on appeal, we review for plain error. Fed. R.
5
Crim. P. 30(d) & 52(b).1 To prevail, Johnson must show “that (1) there is an error; (2) the
error is clear or obvious, rather than subject to reasonable dispute; (3) the error affected
[his] substantial rights, which in the ordinary case means it affected the outcome of the
district court proceedings; and (4) the error seriously affect[ed] the fairness, integrity or
public reputation of judicial proceedings.” United States v. Marcus, 560 U.S. 258, 262
(2010) (internal quotation marks omitted). He doesn’t come close.
The problem with Johnson’s contention is that no evidence was presented at trial
that the taxpayers knew of or were criminally involved with his scheme. In fact, the
evidence shows that Johnson went to significant lengths to keep his clients in the dark.
For example, he registered clients for tax refund loans without their knowledge in order
to guarantee his tax preparation fees, which the lender would deduct from the clients’
refunds and deposit into one of Johnson’s accounts. Often Johnson would retain a portion
of those refunds, depositing them into one of his accounts and giving the clients personal
checks for smaller amounts. For one client, he prepared and presented a tax return with
correct information, only to send a different return with inflated deductions to the IRS.
After the IRS had opened an investigation of Johnson’s tax preparation business, he
wrote it a letter pretending to be one of his clients without that client’s knowledge or
consent.
1
Johnson contends that, despite his failure to request the jury instruction about taxpayer
testimony, we should review for abuse of discretion because he requested a “related
instruction as to the existence of co-conspirators.” Johnson’s Br. at 52. Specifically, he
requested an instruction “that [the] Government must prove that at least one other alleged
co-conspirator was involved in the conspiracy[.]” J.A. 91. That simply is not the jury
instruction he now seeks.
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We cannot conclude that the District Court’s failure to give an instruction
cautioning skepticism of the taxpayer’s testimony was error, much less clear error.
III. SUFFICIENCY OF THE EVIDENCE
Next, Johnson contends that his conviction must be reversed because the
Government failed to prove sufficiently that he acted willfully when he submitted false
information in his clients’ tax returns. “Willfulness, as construed by [the Supreme
Court’s] prior decisions in criminal tax cases, requires the Government to prove that the
law imposed a duty on the defendant, that the defendant knew of this duty, and that he
voluntarily and intentionally violated that duty.” Cheek v. United States, 498 U.S. 192,
201 (1991). In assessing the sufficiency of the evidence, “the relevant question is
whether, after viewing the evidence in the light most favorable to the prosecution, any
rational trier of fact could have found the essential elements of the crime beyond a
reasonable doubt.” Jackson v. Virginia,
443 U.S. 307, 318-19 (1979).
The record is replete with evidence presented at trial from which a rational trier of
fact could find willfulness beyond a reasonable doubt. A few examples stick out. As
mentioned above, Johnson provided one client with a copy of the latter’s tax return and
then submitted a falsified return to the IRS. He did this in order to obtain a $5,787 refund,
only $679 of which did he pay to the client. In response to an audit, Johnson submitted
false documentation to the IRS claiming that one client, a practicing Hindu, made
charitable donations to the New Life Christian Fellowship. And after the IRS’s pending
investigation led to suspension of Johnson & Associates’ Electronic Filing Identification
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Number (“EFIN”), Johnson reached an agreement with another tax preparer to use her
EFIN. He used it to file two more tax returns containing false information.
Johnson asserts that he could not possibly have acted willfully because he would
receive no benefit from providing false information in his clients’ tax returns. But, as
already noted above, Johnson did receive a benefit; in addition to securing future
payment of his tax preparation fees, he placed some clients’ refunds into his own
accounts and gave the clients personal checks for lesser amounts.
Accordingly, we have little trouble concluding that the Government presented
sufficient evidence to uphold Johnson’s conviction.
* * * * *
Having concluded that Johnson’s attempts to undermine his conviction
underwhelm, we proceed to his objections to the sentence imposed by the District Court.
Here there is more merit.
IV. DISPUTED TAX LOSS AMOUNT
At his sentencing hearing, Johnson objected to the Government’s calculation of
the tax loss caused by his fraud, contending that at least one $146,523 deduction the
Government believes led to a $90,729 tax loss was in fact legitimate; that several tax
returns contained (unintentional) errors that, if corrected, would yield refunds for the
relevant taxpayers rather than tax loss to the Government; and that tax loss arising from
returns prepared by his wife should not be attributed to him. The District Court heard
significant argument on these issues and denied Johnson’s request for an evidentiary
hearing. “The sentencing guidelines and Federal Rules of Criminal Procedure do not
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require that a district court conduct an evidentiary hearing in addition to a sentencing
hearing at which the parties can be heard.” United States v. Kluger, 722 F.3d 549, 562
(3d Cir. 2013). But the Court did not state on the record its resolution of Johnson’s three
objections to the tax-loss calculation. Johnson argues that the Court’s failure to accept or
reject explicitly each of his objections to the tax loss calculation warrants vacating his
sentence and remanding for resentencing. He is correct.
Federal Rule of Criminal Procedure 32(i)(3)(B) provides that “[a]t sentencing . . .
the court . . . must—for any disputed portion of the presentence report or other
controverted matter—rule on the dispute or determine that a ruling is unnecessary[,]
either because the matter will not affect sentencing, or because the court will not consider
the matter in sentencing[.]” “[T]he purpose of Rule 32 is to ensure that the defendant’s
sentence is based on accurate and reliable information and that subsequent recipients of
the report are aware of whatever resolutions occurred at sentencing.” United States v.
Rosa, 891 F.2d 1063, 1070 (3d Cir. 1989) (internal quotation marks omitted). “A finding
on a disputed fact or a disclaimer of reliance upon a disputed fact must be expressly
made[, and] the Rule requires that the findings and determinations be appended to a copy
of the presentence report.” United States v. Electrodyne Sys. Corp.,
147 F.3d 250, 252,
255 (3d Cir. 1998). “This Rule is strictly enforced and failure to comply with it is
grounds for vacating the sentence.”
Id.
The Government rebuts that the District Court did resolve the dispute by stating on
the record it had “reviewed the extensive presentence report and . . . accepted and
adopted [its] recommendations[.]” J.A. 122. But this falls short of the requirement that
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findings on disputed issues must “be expressly made.” Electrodyne, 147 F.3d at 255. The
Court made that statement after it had heard from the Government and Johnson on other
issues in addition to the tax-loss disputes. The statement is untethered from the tax-loss
calculation, and there is no indication whether the Court resolved Johnson’s objections in
the Government’s favor or decided that the presentence report’s recommendations could
stand without reliance on or resolution of the contested tax loss calculation. Indeed, the
presentence report stated that “[t]he Court must rule on [the tax-loss] issue.” PSR at 35.
By offering blanket approval of a report that asked the Court for a specific ruling, it left
unclear what it decided and why.
In a discussion of the evidence providing the basis for Johnson’s conviction, the
District Court did state that it was “absolutely convinced that these were knowing, false
deductions[.]” Suppl. App. 1699. Although this statement was not directly tied to
Johnson’s specific objection to the $146,523 deduction, it arguably may have resolved
that dispute.
But the Government points to no statement similarly addressing Johnson’s
objection that he should not be held responsible for tax losses stemming from returns
prepared by his wife or that errors in some tax returns led to an overstated tax-loss figure.
Thus it is unclear whether or how the Court relied on these disputed facts.
In the Government’s view, remand is unnecessary because “the Court’s resolution
of Johnson’s factual disputes with the tax loss, if not explicit, was certainly implicit in the
record.” Gov’t’s Br. at 52. That is not the case. When a factual dispute arises at
sentencing, the District Court must either state its finding on the disputed fact or disclaim
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reliance on it. Electrodyne, 147 F.3d at 255. The record here leaves unclear which of
Johnson’s objections the Court resolved and which disputed facts it might have chosen to
disregard.
Because the District Court failed to resolve expressly the tax-loss dispute or
disclaim reliance on the disputed calculations, we vacate Johnson’s sentence and remand
for resentencing.
V. INTERPRETATION OF GUIDELINES § 3B1.1(b)
The District Imposed a three-level enhancement under Sentencing Guidelines
§ 3B1.1(b) because Johnson acted as a “manager or supervisor . . . and the criminal
activity involved five or more participants or was otherwise extensive[.].” U.S.S.G.
§ 3B1.1(b). It is undisputed that Johnson’s criminal activity did not involve five or more
participants. He contends that the District Court erred by imposing the enhancement
without identifying countable non-participants that amount to the “functional equivalent
of five participants.” United States v. Helbling, 209 F.3d 226, 248 (3d Cir. 2000) (internal
quotation marks omitted).
Even if the Court might have been more clear as to how it determined that
Johnson’s criminal activity was “otherwise extensive,” we need not decide whether the
enhancement under § 3B1.1(b) was appropriate. Because we must vacate Johnson’s
sentence for the reasons stated above, the District Court will have the opportunity to
reconsider this question on remand.
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VI. RESTITUTION
The presentence report cited 18 U.S.C. § 3663 (authorizing imposition of
restitution for certain offenses under Titles 18 and 49) as the source of the Court’s
authority to impose restitution payable immediately as part of Johnson’s sentence for
violating 26 U.S.C. § 7206 (prohibiting, among other things, willful aid or assistance in
the preparation of a false or fraudulent tax return). PSR at 27. The parties agree that
§ 3663 does not permit the imposition of restitution for violations of § 7206, which
appears in Title 26 of the U.S. Code. So do we, and thus the District Court’s order of
restitution must be vacated.
The Government contends, however, that the District Court was authorized to
impose restitution as a condition of supervised release under 18 U.S.C. § 3583(d)
(providing for conditions of supervised release) and asks that we remand to allow the
Court to correct the basis and timing of Johnson’s obligation to pay restitution. Johnson
disagrees, arguing that restitution simply may not be imposed for violations of Title 26.
We need not resolve whether § 3583(d) authorizes restitution in Johnson’s case
and leave the question to the District Court to decide in the first instance on remand.
* * * * *
For these reasons we affirm Johnson’s conviction, vacate his sentence, and remand
to the District Court for resentencing.
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