United States v. Anthony Sertich, Jr.
879 F.3d 558
| 5th Cir. | 2018Background
- Anthony P. Sertich, Jr., a physician who owned two medical practices, was charged with ten counts under 26 U.S.C. § 7202 (willful failure to collect or truthfully account for and pay over payroll taxes) for quarters between 2008–2010, and one count under 26 U.S.C. § 7201 (tax evasion) for attempting to evade payment of over $2.9 million in payroll taxes.
- The government presented evidence that Sertich submitted forms showing withholdings and claimed credits on personal returns while repeatedly failing to remit those funds to the IRS.
- The IRS repeatedly attempted collection; Sertich filed multiple bankruptcies (2004–2010) that temporarily halted collection but often were dismissed when he failed to make payments.
- Accountants and revenue officers repeatedly warned Sertich that payroll taxes were due and that he needed to deposit and pay them; testimony contradicted his claim that he believed withheld funds were a repayable “loan.”
- Sertich testified he intended to pay, blamed personal/financial difficulties, and said he misunderstood the law; the jury convicted on all counts.
- The district court sentenced Sertich to 41 months’ imprisonment and three years supervised release; he appealed challenging a § 7202 jury instruction and the sufficiency of evidence for §§ 7201 and 7202 convictions.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Proper construction of § 7202: whether the phrase “account for and pay over” is conjunctive or disjunctive | § 7202 requires both failing to account for AND failing to pay over (conjunctive); thus conviction improper if he truthfully accounted but did not pay | Government: § 7202 is violated if defendant willfully fails EITHER to truthfully account for OR to pay over withheld taxes (disjunctive) | Court held § 7202 is disjunctive: conviction may rest on willful failure to either account for or pay over taxes; instruction was correct |
| Sufficiency of evidence for § 7201 (tax evasion) | Sertich: lacked willfulness; believed he had a lawful loan from IRS and lacked intent to evade | Government: pattern of avoidance, bankruptcy filings to delay collection, use of funds for personal purposes, accountant/IRS warnings showed knowledge and affirmative acts to evade | Evidence sufficient: jury could find willfulness beyond reasonable doubt |
| Sufficiency of evidence for § 7202 | Sertich: good-faith belief that he was not committing a crime (loan belief); lack of willfulness | Government: accountants and revenue officers repeatedly warned him; he retained/used withheld funds and failed to remit | Evidence sufficient: jury could credit government and disbelieve the loan belief; willfulness proved |
| Application of rule of lenity to statutory ambiguity | Sertich: any ambiguity should resolve in defendant’s favor | Government: statute’s text, purpose, and precedent resolve issue | Court: no grievous ambiguity; lenity not applicable; adopted disjunctive reading |
Key Cases Cited
- United States v. Gilbert, 266 F.3d 1180 (9th Cir. 2001) (interpreting § 7202 as disjunctive)
- United States v. Thayer, 201 F.3d 214 (3d Cir. 1999) (holding § 7202 penalizes failure to either account for or pay over)
- United States v. Evangelista, 122 F.3d 112 (2d Cir. 1997) (reading § 7202 to punish failure to complete statutory duty to account and pay)
- Slodov v. United States, 436 U.S. 238 (1978) (construing civil analogue § 6672 to require duty to withhold and pay sums withheld)
- Cheek v. United States, 498 U.S. 192 (1991) (defining willfulness in tax offenses and relevance of good-faith belief)
- Almendarez-Torres v. United States, 523 U.S. 224 (1998) (use of statutory titles/headings in interpretation)