United States v. Preston Harrison
15-3936
| 6th Cir. | Nov 1, 2016Background
- Harrison and Jackson co-founded Imperial to market "OXYwater" and sought investor funds via a Private Placement Memorandum (PPM); investors contributed roughly $9.3 million.
- The PPM contained false statements (bogus Vitaminwater/Coke personnel, false celebrity endorsements, and misstated management payroll/use of funds).
- Jackson, who controlled Imperial bank accounts, transferred over $1 million of investor funds into Forever Now, an LLC account controlled by Harrison and his wife and used for personal expenses.
- Investigators seized vehicles and cash traceable to the Forever Now account; Forever Now did not file a tax return for 2011 while the Harrisons reported only about $23,000 of personal income that year.
- A federal jury convicted Harrison of conspiracy to commit wire fraud, money laundering and money-laundering conspiracy, conspiracy to defraud the United States, and filing a false tax return; district court denied acquittal motion and sentenced him to 83 months and restitution.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Sufficiency of evidence for conspiracy to commit wire fraud | Prosecution: circumstantial evidence showed Harrison knowingly joined a scheme to defraud investors (PPM misrepresentations, joint presentations, contacts with recruits, investor testimony). | Harrison: he had a limited/behind-the-scenes role, no evidence he drafted or knew PPM contents, inconsistent acquittals on substantive wire-fraud counts show lack of conspiracy. | Affirmed — jury could infer a tacit agreement from circumstantial evidence showing Harrison’s participation. |
| Sufficiency of evidence for money laundering and conspiracy | Prosecution: transfers from Imperial to Forever Now and expenditures tied to those funds support knowledge and participation in laundering. | Harrison: lacked knowledge that transferred funds were fraud proceeds; his role was mere association. | Affirmed — evidence supported that Harrison knew source of Forever Now funds and spent them, satisfying laundering elements. |
| Sufficiency of evidence for filing false tax return (26 U.S.C. § 7206(1)) | Prosecution: electronic tax return listed Harrison as taxpayer with PINs; return omitted funds from Forever Now and claimed small income/credits; forensic testimony tied filings to them. | Harrison: PIN filing means unclear who actually submitted the return; wife may have prepared/favored the false return without his knowledge. | Affirmed — IRS agent testimony and joint filing allowed a rational jury to find Harrison willfully signed/ subscribed to the false return. |
| Sufficiency of evidence for conspiracy to defraud the United States (tax conspiracy) | Prosecution: joint electronic filing, knowledge of large family receipts from Forever Now, and business registration supported an inference of agreement between spouses. | Harrison: no direct evidence of communications/agreement with wife to file false return. | Affirmed — conspiracy can be inferred from circumstantial evidence; jury reasonably inferred agreement. |
Key Cases Cited
- United States v. Vichitvongsa, 819 F.3d 260 (6th Cir.) (standard of review for sufficiency of the evidence)
- Jackson v. Virginia, 443 U.S. 307 (Sup. Ct.) (evidence must be viewed in light most favorable to the prosecution)
- United States v. Stewart, 729 F.3d 517 (6th Cir.) (substantial and competent evidence standard)
- United States v. Gunter, 551 F.3d 472 (6th Cir.) (courts do not reweigh evidence or assess witness credibility on sufficiency review)
- United States v. Rogers, 769 F.3d 372 (6th Cir.) (elements of wire fraud and conspiracy)
- United States v. Hamilton, 263 F.3d 645 (6th Cir.) (conspiracy may be proved by tacit understanding)
- United States v. Powell, 469 U.S. 57 (Sup. Ct.) (inconsistent jury verdicts are permissible)
- United States v. Martinez, 430 F.3d 317 (6th Cir.) (conspiracy may be inferred from circumstantial evidence)
- United States v. Prince, 618 F.3d 551 (6th Cir.) (elements of money-laundering conspiracy)
- United States v. Damra, 621 F.3d 474 (6th Cir.) (agreement to conspire can be inferred)