United States v. Sherri Davis
2017 U.S. App. LEXIS 13109
| D.C. Cir. | 2017Background
- Sherri Davis owned a tax-preparation business (2FT Fast Facts) that the IRS found was filing returns with fabricated charitable and business deductions; her niece/employee LaDonna cooperated with the government and pleaded guilty to a related conspiracy.
- After IRS action in 2011, Sherri continued preparing returns under a new business name (Davis Financial Services); a 2012 EFIN application listed her son Andre Davis as principal/primary contact.
- Undercover videotapes and client testimony established extensive false returns prepared at 2FT; LaDonna testified Sherri taught her to fabricate deductions and that Sherri often finalized returns entered under employees’ logins.
- Indictment charged Sherri and Andre with conspiracy to defraud the United States and multiple counts of aiding/filing false returns; at trial the jury convicted both on conspiracy and convicted Sherri on many counts and Andre on one aiding-count (Count 19).
- The district court denied motions for acquittal/new trial; Andre moved for acquittal on one count granted at close of evidence. Sentences: Sherri imprisoned and ordered restitution; Andre received probation and restitution.
- On appeal the court reversed Andre’s convictions (finding prosecutorial misstatements and insufficient evidence) and affirmed Sherri’s convictions but vacated her sentence and remanded for resentencing and consideration of ineffective-assistance claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Prosecutorial misconduct in closing toward Andre (misstating evidence about Andre’s knowledge and income) | Prosecutor argued Andre knew of criminal investigation and personally received large unreported fees; this showed willfulness | Andre said evidence was equivocal; prosecutor misstated or inflated evidence about his mens rea and income | Court: Misstatements were blatant, central given weak evidence; plain error requiring reversal of Andre’s convictions |
| Sufficiency of evidence as to Andre’s mens rea and participation (Counts 1 and 19) | Gov’t: Collective inferences from EFIN application, TaxWise records, LaDonna and Jaycox testimony support conviction | Andre: Records only show he was listed as contact/principal and worked at business; no direct evidence he entered false data or knew of fraud | Held: Evidence equivocal/insufficient beyond reasonable doubt; convictions reversed and retrial barred under Burks |
| Prosecutorial misconduct in closing toward Sherri (last rebuttal urging jury to "tell her to stop") | Gov’t: closing was proper emphasis on continuing harm and required conviction | Sherri: statement appealed as impermissibly arousing passion and urging conviction for public protection | Held: District court cured by curative instruction; prejudice mitigated and evidence against Sherri was overwhelming; conviction affirmed |
| Sentencing and restitution calculations for Sherri (tax-loss reliability) | Sherri: government loss charts were internally inconsistent and lacked reliable foundation; federal loss may be overstated | Gov’t: sentencing loss supported by IRS evidence and witness testimony | Held: Government’s loss chart and proof lacked sufficient indicia of reliability; remand for resentencing and restitution factfinding; also remand to consider ineffective-assistance claims |
Key Cases Cited
- Hammerschmidt v. United States, 265 U.S. 182 (establishes elements of conspiracy to defraud the United States)
- Cheek v. United States, 498 U.S. 192 (mens rea requirement for tax offenses and specific intent principles)
- Valdez v. United States, 723 F.3d 206 (D.C. Cir. 2013) (prosecutor may not argue evidence not in record; factors for prejudicial error)
- Small v. United States, 74 F.3d 1276 (D.C. Cir. 1996) (standards for improper prosecutorial argument)
- McGill v. United States, 815 F.3d 846 (D.C. Cir. 2016) (plain-error review and prejudice factors)
- Kotteakos v. United States, 328 U.S. 750 (harmless-error principles where error may affect jury verdict)
- Burks v. United States, 437 U.S. 1 (retrial barred when conviction reversed for insufficient evidence)
- Jackson v. Virginia, 443 U.S. 307 (standard for reviewing sufficiency of evidence)
- Direct Sales Co. v. United States, 319 U.S. 703 (evidence cannot sustain conviction when equivocal)
- Gaither v. United States, 413 F.2d 1061 (D.C. Cir. 1969) (limitations of jury instructions as cure for improper argument)
- Strickland v. Washington, 466 U.S. 668 (ineffective assistance of counsel standard)
- Brady v. Maryland, 373 U.S. 83 (government duty to disclose exculpatory/impeachment evidence)