United States v. Eugene Clarke
2015 U.S. App. LEXIS 15937
| 7th Cir. | 2015Background
- In 2009 Clarke filed federal tax returns for the "Eugene Clarke Trust" for 2006–2008 claiming $900,000 income and $900,000 fiduciary fees each year and $300,000 withheld, requesting $300,000 refunds per year. The returns initially listed a misspelled Treasury Secretary as fiduciary; IRS treated them as frivolous but Clarke resubmitted and the IRS issued three $300,000 checks in January 2010.
- Clarke tried to cash one check at a check-cashing business, telling the manager the funds came from a trust from his deceased father; he later deposited all three checks into a bank account and spent the proceeds.
- In 2013 Clarke was indicted on seven counts of presenting false claims to the United States in violation of 18 U.S.C. § 287; he pleaded not guilty and went to trial in 2014.
- The government presented IRS employees and the check-casher as witnesses; evidence included the tax returns (which omitted sources for income and showed implausible fiduciary fees and withholding) and testimony that the returns lacked economic reality.
- Clarke moved for judgment of acquittal arguing the government failed to prove he knew the claims were false; he also requested a good-faith jury instruction. The district court denied both motions and the jury convicted him on all counts.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Sufficiency of evidence that Clarke "knew" claims were false under 18 U.S.C. § 287 | Government: Returns themselves and witness testimony provided sufficient evidence of knowledge | Clarke: No evidence of willfulness or actual knowledge; claimed good-faith belief he was owed the money | Affirmed — viewing evidence in prosecution's favor, returns were "patently false and utterly groundless," permitting a jury to infer knowledge |
| Entitlement to a good-faith jury instruction | Clarke: Good-faith belief negates culpable knowledge and should be instructed | Government: Willfulness is not an element of § 287; good-faith instruction unnecessary/misleading | Affirmed — district court did not abuse discretion; willfulness is not required for § 287 so good-faith instruction was not required |
Key Cases Cited
- United States v. Catton, 89 F.3d 387 (7th Cir. 1996) (willfulness not required element for § 287; knowledge of falsity suffices)
- United States v. Ferguson, 793 F.2d 828 (7th Cir. 1986) (patently false tax forms can demonstrate defendant's knowledge of falsity)
- United States v. Haddon, 927 F.2d 942 (7th Cir. 1991) (elements of § 287 explained)