Filed: Apr. 24, 2008
Latest Update: Mar. 02, 2020
Summary: RECOMMENDED FOR FULL-TEXT PUBLICATION Pursuant to Sixth Circuit Rule 206 File Name: 08a0164p.06 UNITED STATES COURT OF APPEALS FOR THE SIXTH CIRCUIT _ X Plaintiff-Appellee, - UNITED STATES OF AMERICA, - - - No. 07-5229 v. , > GREGORY D. GOOSBY, - Defendant-Appellant. - N Appeal from the United States District Court for the Western District of Tennessee at Memphis. No. 06-20127—Jon Phipps McCalla, Chief District Judge. Argued: March 18, 2008 Decided and Filed: April 24, 2008 Before: RYAN, SILER,
Summary: RECOMMENDED FOR FULL-TEXT PUBLICATION Pursuant to Sixth Circuit Rule 206 File Name: 08a0164p.06 UNITED STATES COURT OF APPEALS FOR THE SIXTH CIRCUIT _ X Plaintiff-Appellee, - UNITED STATES OF AMERICA, - - - No. 07-5229 v. , > GREGORY D. GOOSBY, - Defendant-Appellant. - N Appeal from the United States District Court for the Western District of Tennessee at Memphis. No. 06-20127—Jon Phipps McCalla, Chief District Judge. Argued: March 18, 2008 Decided and Filed: April 24, 2008 Before: RYAN, SILER, a..
More
RECOMMENDED FOR FULL-TEXT PUBLICATION
Pursuant to Sixth Circuit Rule 206
File Name: 08a0164p.06
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
_________________
X
Plaintiff-Appellee, -
UNITED STATES OF AMERICA,
-
-
-
No. 07-5229
v.
,
>
GREGORY D. GOOSBY, -
Defendant-Appellant. -
N
Appeal from the United States District Court
for the Western District of Tennessee at Memphis.
No. 06-20127—Jon Phipps McCalla, Chief District Judge.
Argued: March 18, 2008
Decided and Filed: April 24, 2008
Before: RYAN, SILER, and COLE, Circuit Judges.
_________________
COUNSEL
ARGUED: Arthur E. Quinn, THE BOGATIN LAW FIRM, PLC, Memphis, Tennessee, for
Appellant. Stuart J. Canale, ASSISTANT UNITED STATES ATTORNEY, Memphis, Tennessee,
for Appellee. ON BRIEF: Arthur E. Quinn, THE BOGATIN LAW FIRM, PLC, Memphis,
Tennessee, for Appellant. Stuart J. Canale, ASSISTANT UNITED STATES ATTORNEY,
Memphis, Tennessee, for Appellee.
_________________
OPINION
_________________
SILER, Circuit Judge. Defendant Gregory Goosby appeals his jury conviction and sentence
on thirty counts of willfully aiding or assisting in the preparation and presentation of false or
fraudulent income tax returns under 26 U.S.C. § 7206(2). He challenges (1) the sufficiency of the
evidence, (2) the district court’s evidentiary ruling on a motion in limine, (3) the jury charge
regarding IRS publications, and (4) the reasonableness of his sentence. We AFFIRM.
BACKGROUND
Goosby operated a tax preparation business or, as he would characterize it, an electronic tax-
filing center from his home. Goosby’s business prepared 558 returns in 1999, 877 returns in 2000,
and 1,435 returns in 2001. In 2006, Goosby was indicted on thirty-three counts of violating
26 U.S.C. § 7206. The government dismissed three counts, and Goosby was found guilty on the
remaining thirty counts. He was sentenced to a 46-month term of imprisonment.
1
No. 07-5229 United States v. Goosby Page 2
The witnesses at trial included IRS employees, numerous taxpayers, and several of Goosby’s
former employees. The trial began with testimony to explain the background of the IRS
investigation. Investigative Analyst Carl Gibeault explained that he received a list of tax return
preparers for the region that included Goosby’s business. Gibeault used a computer program that
allows him to review all the returns by a given tax preparer and rank the returns by amount of
refund. He then compared the ratio of adjusted gross income to the amount of deductions; a high
ratio is an indicator of potential fraud. Gibeault found a high ratio for returns prepared by Goosby’s
business and referred the case for further investigation.
The taxpayer witnesses testified to similar experiences in their dealings with Goosby’s tax
preparation business. The greatest areas of commonality concerned how the taxpayers came to
employ Goosby’s business, what they experienced while meeting with Goosby or his employees,
their reliance on Goosby’s business to properly prepare their returns and determine their entitlement
to deductions, and the type and number of deductions on their returns. Eighteen of the taxpayers
testified that they relied on Goosby to properly prepare their tax returns. At least ten of these
taxpayers met or talked with Goosby in person and provided him with documents and/or answered
questions asked by Goosby. The remaining taxpayer witnesses met with Goosby’s employees and
provided them with documents and/or answered questions asked by the employees. Most of the
taxpayers testified that neither Goosby nor his employees reviewed the completed tax returns with
them, and most did not receive a copy of their return from Goosby or his employees as IRS
regulations require.
During the trial, the taxpayers were shown copies of their returns, and all identified
deductions for which they had provided no information or deductions that were based on answers
given to Goosby or his employees in response to questions. They identified numerous false or
inflated deductions of which they were unaware. Nearly all of the taxpayers identified false
deductions for personal property taxes and/or false charitable contribution deductions. Most also
identified false or inflated reporting of un-reimbursed employee expenses—generally, some
combination of deductions for cell phones, computers, internet access, extra phone lines, uniforms,
dry cleaning, laundry expenses, work boots, mileage, meals, entertainment, and travel. Instead of
providing the information needed to properly determine whether they were eligible for specific
deductions, most of the taxpayers testified that they were simply asked questions about how far they
drove to work and how much they paid for items such as cell phones and computers. Their tax
returns then claimed deductions for the full cost of these items. As a result of the false deductions,
most of the taxpayers were audited or voluntarily filed amended tax returns, and most paid
thousands of dollars in additional taxes.
One of the taxpayers, Idella Branch, filed a tax return that contained only one deduction, for
gambling losses. In 2001, she won two jackpots totaling approximately $163,000 and took home
around $104,000 after taxes. Branch testified that she loaned approximately $55,000 to family
members and spent or gambled away the rest. Her tax return, prepared by Goosby, reported
$162,886 of gambling losses, thereby entitling her to a refund of the previously withheld taxes.
Branch testified that it was impossible for her to have lost that amount and that she never told
Goosby she had lost that amount.
The employee witnesses all testified that they were data entry personnel. Their job was to
enter data into a computer program that filled out the customers’ tax returns. They had no training
in tax preparation. Several employees testified that they relied on Goosby to determine whether
particular items were deductible; others testified that the returns were reviewed, presumably by
Goosby, before being submitted to the IRS. Some of the employees testified that they asked
customers questions about mileage and how much they paid for items such as uniforms, cell phones,
and computers; these amounts were either recorded and passed on to someone else or entered
directly into the computer program.
No. 07-5229 United States v. Goosby Page 3
Goosby testified at the trial and denied any wrongdoing. He denied that he was a tax
preparer and admitted to preparing only one tax return, a 1999 amended return. He essentially
accused the taxpayer witnesses of lying.
DISCUSSION
A. Sufficiency of the Evidence
When a defendant claims there is insufficient evidence to support a conviction, we must
decide “whether, after viewing the evidence in a light most favorable to the government, any rational
trier of fact could have found the essential elements of the crime beyond a reasonable doubt.”
United States v. Gardner, 488 F.3d 700, 710 (6th Cir. 2007). A conviction will be reversed based
on insufficient evidence only if it is “not supported by substantial and competent evidence upon the
record as a whole.” United States v. Barnett,
398 F.3d 516, 522 (6th Cir. 2005). Furthermore,
“[c]ircumstantial evidence alone, if substantial and competent, may support a verdict and need not
remove every reasonable hypothesis except that of guilt.” United States v. Tarwater,
308 F.3d 494,
504 (6th Cir. 2002) (quoting United States v. Humphrey,
279 F.3d 372, 378 (6th Cir. 2002)).
Goosby was convicted of thirty violations of 26 U.S.C. § 7206(2). An offense under
§ 7206(2) has three essential elements:
(1) that defendant aided, assisted, procured, counseled, advised or caused the
preparation and presentation of a return;
(2) that the return was fraudulent or false as to a material matter; and
(3) that the act of the defendant was willful.
United States v. Sassak, 881 F.2d 276, 278 (6th Cir. 1989) (quoting United States v. Hooks,
848 F.2d
785, 788-89 (7th Cir. 1988)). Goosby argues that the evidence is insufficient with respect to the
second and third elements—materiality and willfulness.
1. Willfulness
The element of willfulness requires the government to prove an “intentional violation of a
known legal duty.” Sassak, 881 F.2d at 280 (citing United States v. Pomponio,
429 U.S. 10, 12-23
(1976) (per curiam)). Goosby claims that the government failed to prove he intentionally violated
the law. However, viewing the evidence in the light most favorable to the government, it is
sufficient to permit a finding that Goosby intentionally assisted in the filing of false or fraudulent
tax returns. The taxpayer witnesses came to Goosby, or to his business, to have their taxes prepared.
They were assisted by either Goosby or one of his employees. The taxpayers relied on Goosby to
determine what deductions were legal and proper, and some of the employees explicitly testified that
they also relied on Goosby to determine the propriety of deductions and to review the returns before
they were submitted. All of the employees testified that they were data entry personnel and did not
have the knowledge or training to determine whether deductions were proper. Further, Goosby’s
claim that he did not prepare returns, aside from the one he admits to, is contradicted repeatedly by
the taxpayers’ testimony.
A defendant may be convicted under § 7206 even if his involvement in the preparation of
certain returns was minimal. See United States v. Searan, 259 F.3d 434 (6th Cir. 2001). In Searan,
a mother and son operated a tax preparation business.
Id. at 438. The son was convicted under
§ 7206 and argued there was insufficient evidence to support the conviction.
Id. at 443. Although
the evidence showed that his mother had prepared and signed most of the returns and sometimes
even spoke with taxpayers outside his presence, we upheld the son’s conviction because “he actively
No. 07-5229 United States v. Goosby Page 4
participated . . . by assuring victims of his and his mother’s competency to file tax returns,
particularly returns containing allegedly legitimate ‘deductions’ known to few other people.”
Id.
at 445.
In this case, the similarity in the type of false deductions claimed on most of the tax returns
is strong circumstantial evidence that the defendant willfully submitted tax returns containing false
statements. Viewing the evidence in the light most favorable to the government, the jury could find
beyond a reasonable doubt that Goosby was responsible for submitting the tax returns with
numerous false deductions and that his actions were willful.
2. Materiality
Goosby’s second contention involves the requirement that the return be “fraudulent or false
as to a material matter.” Sassak, 881 F.2d at 278. He argues that the government failed to prove the
returns were materially false and that it was error for the district court to submit the issue of
materiality to the jury. “When materiality is an element of the offense, it must be submitted to the
jury.” United States v. Kone,
307 F.3d 430, 436 (6th Cir. 2002). Therefore, the district court did
not err in submitting the question of materiality to the jury.
Goosby acknowledges that the government presented evidence of materiality at the
sentencing hearing, but he argues there was no such proof at trial. However, the evidence at trial
established that most of the taxpayers had been audited or filed amended returns, and they paid or
owed additional money to the IRS as a result of the false statements. Further, some of the false
deductions were so large or inflated, e.g., the approximately $162,000 of gambling losses, that they
were obviously material. Therefore, sufficient evidence was presented at trial to prove that the tax
returns contained materially false statements.
B. Evidentiary Ruling on Gibeault’s Testimony
Goosby filed a pre-trial motion in limine that sought to prohibit the testimony of
Investigative Analyst Gibeault. The district court allowed Gibeault’s testimony. Goosby argues that
the testimony was inadmissible hearsay and that it was in violation of the Sixth Amendment
Confrontation Clause, FRE 404(b), and FRE 403. We review the evidentiary rulings of the district
court for abuse of discretion. United States v. Lloyd, 462 F.3d 510, 516 (6th Cir. 2006).
We have allowed similar background testimony in other contexts. In United States v. Aguwa,
DEA agents were permitted to testify about information they received from an informant, which
precipitated a controlled purchase of heroin from the defendant. 123 F.3d 418, 421 (6th Cir. 1997)
(“The statements were not offered ‘for the truth of the matter asserted,’ see Fed. R. Evid. 801(c), but
only to provide background information and to explain how and why the agents even came to be
involved with this particular defendant.”). As in Aguwa, the testimony here was limited to
“constructing the sequence of events” in the investigation and did not directly implicate the
defendant in criminal activity.
Id. (brackets omitted). Likewise, the purpose of Gibeault’s testimony
was to provide background information about the investigation, not to discuss the character or prior
bad acts of the defendant; thus, FRE 404(b) is not implicated. There is also no Confrontation Clause
violation because Gibeault did not make statements that would be characterized as testimonial
hearsay. See Davis v. Washington,
126 S. Ct. 2266, 2273-74 (2006).
Goosby’s final evidentiary argument is that Gibeault’s testimony violates FRE 403 because
its prejudicial effect outweighs its probative value. The only statement by Gibeault that approaches
having an unduly prejudicial effect is that he was able to find fifteen returns with a suspicious ratio
“very quickly.” However, that statement was not before the district court when it ruled on the
No. 07-5229 United States v. Goosby Page 5
motion in limine and cannot be 1considered in determining whether the district court abused its
discretion in denying the motion.
C. Jury Instruction on IRS Publications
At trial, IRS Agent Janet Cunningham testified about how a taxpayer can properly claim the
deductions seen repeatedly on the returns involved in the indictment. The government also
introduced various IRS publications into evidence. During Cunningham’s testimony, the court gave
a limiting instruction to make it clear that a violation of IRS rules or regulations “is insufficient to
establish criminal conduct.” At the conclusion of the trial, Goosby requested the following jury
instruction regarding the evidence on IRS rules, regulations, and publications:
The violations by the defendant, Gregory D. Goosby, of the rules, regulations, or
directives set out in the publications of the Internal Revenue Service are not evidence
or proof that the defendant committed the criminal acts alleged in the indictment.
The defendant is not on trial for any acts or crimes not alleged in the indictment.
However, the district court agreed with the government that the IRS publications could be
considered as “some evidence” that the defendant violated § 7206. The court ultimately gave an
instruction similar to the one requested by Goosby, except it included the following sentence: “You
may consider them in deciding whether or not the crimes were committed, but violation of the IRS
rules and regulations alone is insufficient.” (emphasis added).
Goosby asserts that the instruction given by the district court was an incorrect statement of
the law. Because Goosby did not object to the instruction, we review the refusal to give his
requested instruction for plain error. United States v. Blood, 435 F.3d 612, 625 (6th Cir. 2006).
Even if an error occurred here, there is no basis to find that its “adverse impact seriously affected
the fairness, integrity or public reputation of the judicial proceedings,” United States v. Koeberlein,
161 F.3d 946, 949 (6th Cir. 1998), particularly where the district court’s instruction emphasized that
a violation of the IRS rules and regulations would not establish a criminal violation. Therefore, the
district court did not commit plain error.
D. Sentencing
We review the district court’s sentencing decision for reasonableness. United States v. Liou,
491 F.3d 334, 337 (6th Cir. 2007). Goosby appeals his sentence on both procedural and substantive
grounds. Procedurally, he challenges the district court’s determination of sentence enhancements.
Findings under the Sentencing Guidelines that increase a defendant’s sentence must be based on
reliable information and supported by a preponderance of the evidence. See United States v. Yagar,
404 F.3d 967, 972 (6th Cir. 2005). The district court’s factual findings regarding the amount of tax
loss and obstruction of justice enhancement are reviewed for clear error. See United States v. Burke,
345 F.3d 416, 428 (6th Cir. 2003).
Goosby contends that it was improper to calculate the tax loss based on Agent McElroy’s
interviews with taxpayers who were not cross-examined and whose reliability was not investigated.
However, we have previously upheld a calculation of tax loss based on IRS interviews with
taxpayers. See United States v. Redmond, 188 F. App’x 377, 382 (6th Cir. 2006) (unpublished
opinion). Goosby also appeals the district court’s decision to apply an enhancement for obstruction
of justice under USSG § 3C1.1. Conduct that gives rise to the obstruction of justice enhancement
includes committing perjury. USSG § 3C1.1 cmt. n.4. In light of Goosby’s testimony, which was
1
Goosby did not raise or renew his FRE 403 objection when Gibeault testified at trial regarding how quickly
he found the sample of fifteen suspicious returns.
No. 07-5229 United States v. Goosby Page 6
contradicted in material respects by the taxpayer witnesses and Agent McElroy, the district court
did not clearly err in determining that the obstruction of justice enhancement should apply. See
Redmond, 188 F. App’x at 381 (quoting Regalado v. United States, 334 F.3d 520, 524 (6th Cir.
2003)) (“Where there are two permissible views of the evidence, the factfinder’s choice between
them cannot be clearly erroneous.”).
Finally, Goosby argues that the sentence imposed is substantively unreasonable under
18 U.S.C. § 3553(a). Because of his stable home life, prior military service, and lack of a criminal
record, Goosby contends that he should have been sentenced to a term of probation. However, the
district court’s imposition of a 46-month term of imprisonment is within the properly calculated
Guidelines range of 41 to 51 months. This court has applied a “‘rebuttable presumption of
reasonableness’ to sentences falling within the applicable Guidelines range.” Liou, 491 F.3d at 337.
In this case, the district court clearly considered Goosby’s history and explained its decision to
impose a sentence within the Guidelines range. That sentence was reasonable.
AFFIRMED.
