United States v. James Morris
723 F.3d 934
| 8th Cir. | 2013Background
- James Morris, an Army veteran, received VA and SSA disability/unemployability benefits from the 1980s through 2000s, totaling over $450,000, based on representations he could not work.
- Concurrently, James held an Arkansas public accountant (PA) license, certified annual continuing education and practice, operated B. Morris Limited (accounting/tax prep), and prepared large numbers of tax returns (2002–2007).
- Karen Morris worked at BML, filed tax returns for herself and her daughters, and her daughters received $28,870 in Pell Grants (2005–2007) based on FAFSA information including household income and marital status.
- A 2011 superseding indictment charged the Morrises with 44 counts: theft of government funds (VA/SSA), conspiracy to defraud, concealment of material facts to SSA, obtaining Title IV funds by fraud, filing false tax returns (I.R.C. §7206(1)), and causing/assisting false returns (I.R.C. §7206(2)).
- After a joint jury trial, both were convicted on all counts. James received 48 months’ imprisonment and $668,647.87 restitution; Karen received 24 months’ imprisonment and $295,397.00 restitution. The Eighth Circuit affirmed.
Issues
| Issue | Morris' Argument | Government's/Respondent's Argument | Held |
|---|---|---|---|
| Sufficiency of evidence / mens rea for fraud and related counts | Government failed to prove knowing/willful intent; inconsistencies have innocent explanations | Circumstantial evidence (inconsistent statements, pattern of misreporting, manipulated filing statuses, false FAFSA/tax documents) permits inference of intent | Affirmed: evidence sufficient for convictions on theft, concealment, Title IV fraud, conspiracy, tax offenses, and preparer offenses |
| Willfulness for I.R.C. §7206(1) & §7206(2) (tax fraud and preparer offenses) | No specific intent; errors may be good-faith or confusion over rules | Pattern of underreporting/inconsistent income, inflated deductions/EITC, and similar false entries across many returns supports willfulness | Affirmed: jurors could infer willfulness from patterns and inconsistencies |
| Joinder of defendants for joint trial | (Raised for first time on appeal) Joinder prejudiced both defendants | Indictment alleged related series of fraudulent acts and cooperative scheme; joinder liberally permitted; no plain error affecting fairness | Affirmed: joinder proper and no plain error |
| Exclusion of expert testimony & jury instruction/restitution challenges | District court wrongly excluded defense expert on tax-preparer standard (Circular 230); requested good-faith instruction and challenged restitution calculation | Circular 230 irrelevant absent reliance-on-client defense; district court adequately instructed on good faith; restitution discussed at sentencing and challengers failed to specify error | Affirmed: exclusion not an abuse of discretion; good-faith instruction adequate; restitution not shown to be erroneous |
Key Cases Cited
- United States v. Yarrington, 634 F.3d 440 (8th Cir. 2011) (standard for reviewing sufficiency of evidence)
- United States v. Ojeda-Estrada, 577 F.3d 871 (8th Cir. 2009) (rational-jury standard)
- United States v. Gabe, 237 F.3d 954 (8th Cir. 2001) (credibility determinations for jury)
- United States v. Henderson, 416 F.3d 686 (8th Cir. 2005) (intent may be inferred from inconsistent statements)
- United States v. Erdman, 953 F.2d 387 (8th Cir. 1992) (credibility and knowledge issues are for factfinder)
- United States v. Jenkins-Watts, 574 F.3d 950 (8th Cir. 2009) (elements of conspiracy)
- United States v. Boesen, 491 F.3d 852 (8th Cir. 2007) (conspiracy inference from coordinated fraudulent submissions)
- United States v. Schaefer, 4 F.3d 679 (8th Cir. 1993) (willfulness can be shown by a pattern of not reporting income)
- United States v. McLain, 646 F.3d 599 (8th Cir. 2011) (elements of §7206(2) preparer offense)
- United States v. Kouba, 822 F.2d 768 (8th Cir. 1987) (willfulness requires specific intent beyond careless disregard)
- United States v. Goosby, 523 F.3d 632 (6th Cir. 2008) (similar false deductions support inference of willfulness)
- United States v. Poitra, 648 F.3d 884 (8th Cir. 2011) (plain error review standard)
- United States v. Liveoak, 377 F.3d 859 (8th Cir. 2004) (liberal joinder standards)
- Harris v. Chand, 506 F.3d 1135 (8th Cir. 2007) (abuse-of-discretion review for evidentiary rulings)
- United States v. Renner, 648 F.3d 680 (8th Cir. 2011) (jury instructions must fairly submit issues like good faith)
- United States v. Gill, 513 F.3d 836 (8th Cir. 2008) (standard for reviewing rejection of proposed jury instruction)
- Meyers v. Starke, 420 F.3d 738 (8th Cir. 2005) (issues not briefed are waived)
- United States v. Ross, 77 F.3d 1525 (7th Cir. 1996) (Title IV fraud by intentional falsification of documents)