United States v. Bickart
2016 U.S. App. LEXIS 10984
| 7th Cir. | 2016Background
- In May 2009 Jerlene Bickart, assisted by her husband Clark, filed a tax return overstating income and withholding supported by nine fabricated 1099‑OID forms; the IRS paid a $115,412 refund.
- IRS audit in 2011 revealed the 1099‑OID forms were fraudulent; by March 2011 the IRS billed Jerlene for $217,923.
- Over several years the Bickarts engaged in obstructive conduct (fraudulent payment coupon, letters to IRS, frivolous lawsuit, and other filings) and were interviewed by IRS agents.
- Indicted in May 2014 for conspiracy and false claims under 18 U.S.C. §§ 286 and 287; tried pro se, convicted by jury on both counts in March 2015.
- PSR applied a two‑level "sophisticated means" enhancement and a two‑level obstruction enhancement, yielding a guidelines range of 33–41 months; district court sentenced each to 24 months imprisonment and 2 years supervised release.
- On appeal the Seventh Circuit affirmed the sentences and most supervised‑release conditions but vacated and remanded Jerlene’s third‑party notification condition as impermissibly vague.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the two‑level "sophisticated means" enhancement applies | Gov.: fabrication and submission of multiple 1099‑OID forms and related planning demonstrate concealment beyond routine tax fraud | Bickarts: scheme was simple (printing forms), one‑time, readily detectable, not more than inherent concealment | Affirmed: fabrication of multiple false 1099‑OID forms and planning sufficed; enhancement not plain error |
| Whether the court adequately justified the two‑year supervised‑release terms | Gov.: supervised release is part of sentence; reasons given for imprisonment apply to supervised release | Defs.: §3583(c) requires separate consideration and oral pronouncement for each defendant | Rejected: Armour controls; district court tied conditions to §3553(a) and defendants waived separate oral recitation |
| Whether condition to “seek, and work conscientiously” is unconstitutionally vague | Defs.: term "conscientiously" is undefined and vague | Gov.: ordinary meaning is adequate to ensure compliance and restitution payment | Rejected: not plain error; condition sufficiently clear |
| Whether prohibition on new credit lines absent probation approval is overbroad | Defs.: would prevent essential purchases and unduly burden rehabilitation | Gov.: applies only if restitution obligations not met and allows approval; restitution schedule protects necessities | Rejected: condition reasonably tailored to restitution enforcement |
| Whether requirement to notify court of any "material change in economic circumstances" is vague | Defs.: "material change" undefined | Gov.: ties notification to ability to pay restitution, reasonably clear | Rejected: sufficiently precise for plain‑error review |
| Whether third‑party notification condition (notify third parties of risks from criminal "personal history or characteristics") is vague | Jerlene: terms like "personal history," "characteristics," "risks," and "third parties" are undefined and overbroad | Gov.: district court added court‑approval and 7‑day objection window to cure vagueness | Reversed (limited): modification procedural but substantive vagueness remains; condition vacated for Jerlene and remanded to define or remove vague terms |
| Whether permitting probation officer visits at "any reasonable time" is overbroad | Clark: unnecessary, intrusive, hinders employment; alternatives exist (pay stubs, employer contact) | Gov.: reasonable‑time limitation avoids abuses; useful for supervision, justified by offense | Rejected: condition not overly intrusive and within district court's discretion |
Key Cases Cited
- United States v. Kontny, 238 F.3d 815 (7th Cir. 2001) (explains that "sophisticated means" requires concealment beyond inherent tax fraud and supports a two‑level enhancement)
- United States v. Fife, 471 F.3d 750 (7th Cir. 2006) (clarifies that enhancement requires greater planning or concealment than run‑of‑the‑mill tax evasion)
- United States v. Kappes, 782 F.3d 828 (7th Cir. 2015) (district court must adequately justify supervised‑release conditions and avoid vague conditions)
- United States v. Armour, 804 F.3d 859 (7th Cir. 2015) (supervised release is part of the sentence; justifications for imprisonment apply to supervised release)
- United States v. Thompson, 777 F.3d 368 (7th Cir. 2015) (struck similar third‑party notification and intrusive visit conditions for vagueness/overbreadth)
- United States v. Austin, 806 F.3d 425 (7th Cir. 2015) (explains plain‑error standard where sentencing objections were not preserved)