353 F.3d 490 | 6th Cir. | 2003
Before: GUY and GILMAN, Circuit Judges; REEVES,
District Judge. [*] UNITED STATES COURT OF APPEALS _________________ FOR THE SIXTH CIRCUIT _________________ COUNSEL ARGUED: Lawrence J. Phelan, HAEHNEL & PHELAN, U NITED S TATES OF A MERICA , (cid:88) Grand Rapids, Michigan, Kevin M. Schad, SCHAD & (cid:45) Plaintiff-Appellee, COOK, Indian Springs, Ohio, Richard E. Zambon, (cid:45) MITCHELL & ZAMBON, Grand Rapids, Michigan, Daniel (cid:45) Nos. 02-1662/ v. R. Fagan, DANIEL R. FAGAN & ASSOCIATES, Grand (cid:45) 1673/1700/1703/ >
Rapids, Michigan, John M. Karafa, Grand Haven, Michigan, 1736/1769/1771 (cid:44) for Appellants. Donald A. Davis, ASSISTANT UNITED J OAN M ARIE A NDERSON (cid:45) STATES ATTORNEY, Grand Rapids, Michigan, for (02-1662); F RANCIS A LBERT (cid:45) Appellee. ON BRIEF: Lawrence J. Phelan, HAEHNEL & S AGORSKI (02-1673); R ODGER (cid:45) PHELAN, Grand Rapids, Michigan, Kevin M. Schad, (cid:45) B RUCE Y ATES (02-1700); SCHAD & COOK, Indian Springs, Ohio, Richard E. (cid:45) A RTHUR H ENRY Zambon, MITCHELL & ZAMBON, Grand Rapids, (cid:45) M ODDERMAN (02-1703); Michigan, Daniel R. Fagan, DANIEL R. FAGAN & (cid:45) ASSOCIATES, Grand Rapids, Michigan, John M. Karafa, S USAN E LAINE S LOBODA (cid:45) Grand Haven, Michigan, Anthony J. Valentine, TWOHEY (02-1736); R OBERT L EE (cid:45) MAGGINI, PLC, Grand Rapids, Michigan, Keith W. Turpel, (cid:45) G OODWIN , J R . (02-1769); Kalamazoo, Michigan, for Appellants. Donald A. Davis, (cid:45) R UTH E LAINE S HRIVER ASSISTANT UNITED STATES ATTORNEY, Grand (cid:45) (02-1771), Rapids, Michigan, for Appellee. (cid:45) Defendants-Appellants. (cid:45) _________________ (cid:78) OPINION Appeal from the United States District Court _________________ for the Western District of Michigan at Grand Rapids. No. 01-00175—Robert Holmes Bell, Chief District Judge. PER CURIAM. These seven consolidated appeals by defendants Joan Marie Anderson, Arthur Henry Modderman, Argued and Submitted: December 2, 2003 Decided and Filed: December 23, 2003
sentences. The 73-count Superceding Indictment in this case $550 million and the use of IRS Form 8300 to falsely report charged 14 defendants with conspiracy both to defraud and to that 113 transactions occurred with third parties with an commit offenses against the United States in violation of aggregate value of more than $490 million. In addition, 18 U.S.C. § 371 (count 1); substantive offenses relating to the defendants refused to appear before or cooperate with the making and offering of fictitious “sight drafts” purporting to grand jury, its subpoenas, or the federal district court. be actual financial instruments issued under the authority of Defendants also filed frivolous “notices” (including criminal the United States in violation of 18 U.S.C. § 514(a)(2) (counts complaints) against prosecutors, law enforcement and judicial 2-24); and substantive offenses involving the making and officers involved in the investigation and prosecution of this subscribing, or aiding, assisting or counseling the making and case. subscribing of false reports of cash transactions to the IRS on In 1998, defendant Rodger Yates was serving a sentence in Form 8300 in violation of 26 U.S.C. § 7206(1) and federal prison for activities involving the “Montana Freemen” (2) (counts 25-73). Two defendants pleaded guilty and the at the same time that defendant Jerry Allen Chase was serving remaining twelve defendants were convicted by a jury on all a sentence for violating income tax laws. Chase testified that charges following a joint trial. After review of the record and Yates told him that he and Roger Elvick were perfecting a the defendants’ respective challenges to their convictions
scheme using false financial instruments that appeared to be and/or sentences, we affirm in all respects. drawn on the United States. Yates enlisted the aid of I. individuals outside prison; namely, Joan Anderson, her common law husband Arthur Modderman, and Phillip Leroy The indictment alleged that beginning in late 1998 and (a.k.a. PJ) Hammond (who has not appealed). Yates, who continuing through July 2001, the defendants joined in a was in prison for having used earlier forms of fictitious single conspiracy with multiple objectives: namely, to defraud instruments, told Chase that the new “sight draft” theory was the United States by impeding, impairing, obstructing, and “more sound” than earlier schemes. defeating the lawful government functions of the IRS and other federal agencies; and to commit offenses against the During that same time frame, defendants Ruth Shriver United States with respect to both the fictitious sight drafts (Shriver) and her husband Jack Shriver (who has not and the false reports of cash transactions to the IRS. [1] The
appealed) were in financial trouble with the IRS. The indictment described the “means and methods” of the Shrivers communicated with Elvick and his partner, Roger Knutt, both of whom had recently been released from prison and claimed to have recovered their farm using false sight drafts. In late summer 1998, PJ Hammond ordered thousands [1] of blank sight drafts from a commercial printing company. A bank representative, Paul Wegener, contrasted a check with a
sight draft. A check is payable on demand when presented to a bank, The drafts were paid for by someone named “Ruth.” On while the maker or drawer of a sight draft instructs the drawee to pay a
September 9, 1998, the Shrivers sent the IRS a sight draft third party. A sight draft is not deposited in an account like a check, but appearing to be drawn on the United States Treasury in the must be pro cessed through the collection de partm ent. Nos. 02-1662/1673/1700/1703/ United States v. 5 6 United States v. Nos. 02-1662/1673/1700/1703/ 1736/1769/1771 Anderson, et al. Anderson, et al. 1736/1769/1771
belonged to Modderman. [2] Most of the false 8300s reported amount of $1.75 million. Although the IRS initially credited the Shrivers in that amount, the credit was reversed. Within nonexistent transactions involving a number of judges, a week of the first sight draft, six other codefendants each prosecutors, attorneys, public officials, and law enforcement wrote similar sight drafts to the IRS (including appellants and corrections officers. The forms were filled out to indicate Sagorski, Hammond, Anderson, and Modderman). that the target had refused to give his or her social security
number, which automatically caused the IRS to send a stern Sight drafts made payable to the IRS were written by all but form letter to the target demanding compliance with the law. two defendants, Sloboda and Goodwin, and formed the basis for the substantive charges in counts 2 through 24. As A total of eight defendants were charged with making false referenced earlier, numerous other sight drafts were presented declarations under penalty of perjury by signing a false IRS to state and local governments, credit card companies, banks Form 8300, in violation of § 7206(1); including appellants and credit unions, brokerages, and were also used for personal Modderman (counts 37-45), Sagorski (counts 46-47), Sloboda expenses. Part of the scheme was the hope that some (counts 48-49), and Goodwin (counts 28-30). The remaining financial institutions had such sloppy computer systems that charges for aiding, assisting, counseling, or advising others to at least some sight drafts would be accepted and the credits make false declarations on the 8300s in violation of § 7206(2) could be spent or used to eliminate other debts. were brought against Yates (counts 50-53) and Anderson
(counts 50-73). Another aspect of the conspiracy involved the filing of false returns with the IRS that reported cash transactions of over The evidence showed that Anderson and Modderman $10,000, when no transaction had in fact occurred, in order to explained the “redemption theory” and instructed others how intimidate and harass the individual identified as having to write the sight drafts and fill out the false 8300s. One participated in the nonexistent transaction. Under federal law, witness, Diana Arndt-Mammen (Arndt), testified that a return, Form 8300, must be filed with the IRS when a Anderson and Modderman offered the sight-draft scheme as person engaged in a trade or business receives over $10,000 a way for her to resolve her severe financial problems, in a cash transaction. 26 U.S.C. § 6050I. Form 8300 includes showed her how to fill out the sight drafts and false 8300s, a jurat, stating that: “Under penalties of perjury, I declare that and asked if she had filed false 8300s against those who to the best of my knowledge the information I have furnished rejected the sight drafts. Another coconspirator, Herbert above is true, correct, and complete.” Lawrence, testified that Anderson and Modderman instructed
him on how to use the false 8300s to “bring the IRS down” on Targets of the false 8300s included individuals who officials and other individuals to harass them. Anderson and rejected sight drafts and both public officials and private Modderman also told Lawrence to avoid lawyers, that he did individuals against whom a defendant bore a grievance. For example, four members of the Westveld family were targeted because one of them had purchased property that had once [2] An emp loyee o f a cred it union was targeted by Hammond, and a
disabled worker in the mailroom of a credit card company was targeted after op ening an app lication fro m de fendant Carney.
Nos. 02-1662/1673/1700/1703/ United States v. 7 8 United States v. Nos. 02-1662/1673/1700/1703/ 1736/1769/1771 Anderson, et al. Anderson, et al. 1736/1769/1771 not have to obey the corrupt court system, and that he would Anderson, Modderman, Yates, Sagorski, Sloboda, Goodwin be protected if he recited their “shield” or “mantra.” [3]
and Shriver. Use of the mantra was taught as part of the scheme and was II. recited by various defendants through all stages of the With the exception of Sloboda and Shriver, defendants proceedings. It was part of the refusal to cooperate with the appeal from the denial of judgment of acquittal with respect grand jury and in contempt proceedings, which resulted in to some or all of their convictions. On appeal, “the relevant obstruction of justice enhancements at sentencing. question is whether, after viewing the evidence in the light Handwriting exemplars were ultimately provided to the grand most favorable to the prosecution, any rational trier of fact jury, but not until after defendants were held in contempt of could have found the essential elements of the crime beyond court. At trial, each of the defendants—except for Sagorski, a reasonable doubt.” Jackson v. Virginia , 443 U.S. 307, 319 Dewey Metcalf, Sr., and Dewey Metcalf, Jr.—disrupted the
(1979). This standard applies to both direct and trial by standing and reciting the mantra. circumstantial evidence, and all reasonable inferences must be This disruption involved several defendants rising together, drawn in favor of the government. United States v. Searan , repeatedly reciting the mantra and being removed from the 259 F.3d 434, 441 (6th Cir. 2001). courtroom. The first time, seven defendants were removed. The next day, a total of nine defendants were removed. [4] With
A. Form 8300 that, the district court decided, after consulting with counsel, Challenging their convictions for violations of 26 U.S.C. that the nine defendants would be allowed to return only if § 7206(1) and (2), as well as the portion of the conspiracy they gave assurances that they would not disrupt the charge relating to these offenses, Anderson, Yates, proceedings any further. Unwilling to give any assurances, Modderman, Sagorski, and Goodwin argue first that these none of the nine were present in the courtroom for the rest of convictions must be reversed because there is no duty to file the trial. Although the defendants do not challenge the Form 8300 for nonexistent transactions. Defendants reason district court’s handling of the situation, it was the basis for that if there is no duty to file a return, there can be no upward departures at sentencing as well as Sagorski’s motion prosecution for filing a form containing false information for severance or mistrial. either because it cannot be a “willful” violation or because the falsity cannot be “material.” While there are apparently no Defendants were convicted on all counts and, after cases addressing this argument, we are satisfied that it is the sentencing, timely notices of appeal were filed on behalf of novelty of the defendants’ conduct that accounts for this fact and not the inapplicability of § 7206 to this situation. Defendants emphasize that most cases involving the “What is your name ? D o you have a claim against me? Do you know of currency transaction report required by 26 U.S.C. § 6050I are any others that have a claim against me? I request the order of the Court be released to me immediately.” prosecutions for willful failure to file the return under 26
U.S.C. § 7203. That may be, and, in those cases, proof of a [4] Ruth Shriver also rose and stepped toward someone near the duty to file a return may be required for conviction since
podium, but was intercepted by security and removed from the courtroom. Nos. 02-1662/1673/1700/1703/ United States v. 9 10 United States v. Nos. 02-1662/1673/1700/1703/ 1736/1769/1771 Anderson, et al. Anderson, et al. 1736/1769/1771 § 7203 refers to any person “required to make a return.” We Taking a slightly different tack, Modderman argues that the have no difficulty concluding, however, that proof of a duty falsity of the information on the 8300s was not “material” to file a return is not required to establish a violation of because in the absence of any reportable transaction there was § 7206(1) or (2) for filing reports of nonexistent transactions. no duty to file the 8300s and no tax to be computed by the See United States v. Tarwater , 308 F.3d 494, 504 (6th Cir. IRS. Of course, the failure to report income or other items 2002) (describing § 7206 as a perjury statute criminalizing necessary to the computation of tax is material. Tarwater , lying on any document filed with the IRS). 308 F.3d at 505. In general, however, “a false statement is
material if it has ‘a natural tendency to influence, or [is] “Willfulness” for purposes of the tax laws connotes “‘a capable of influencing, the decision of the decisionmaking voluntary, intentional violation of a known legal duty.’” body to which it was addressed.’” Neder v. United States , Cheek v. United States , 498 U.S. 192, 200 (1991) (citation
527 U.S. 1, 16 (1999) (alteration in original) (citation omitted). The relevant duty for purposes of willfulness is the omitted). We reject defendants’ contention that it is duty imposed by the provision of the statute or regulation the immaterial as a matter of law to falsely report a transaction on defendant is accused of violating. Id. at 201-02. Under Form 8300 when no transaction has in fact occurred. § 7206(1), the government must show the defendant willfully made and subscribed “any return, statement, or other B. Sight Drafts document, which contains or is verified by a written The convictions for violation of 18 U.S.C. § 514(a)(2), as declaration that it is made under the penalties of perjury, and well as the portion of the conspiracy charge relating to those which he does not believe to be true and correct as to every offenses, are challenged on appeal by Modderman (counts 1, material matter.” The companion section, § 7206(2), makes 15-17), Yates (counts 1 and 24), Sagorski (counts 1, 18-22), it a felony for any person to willfully aid, assist, procure,
and Goodwin (count 1). [6] Defendants make three main claims: counsel, or advise the preparation or presentation under the that the sight drafts are not “fictitious” obligations; that they internal revenue laws a return, affidavit, claim or other do not appear to be “actual” financial instruments; and that document which is fraudulent or false as to any material there was no evidence of an intent to defraud because they did matter. The clear import of these provisions is that when one not attempt to get a refund from the IRS. None of these makes and subscribes a return, or aids and counsels the claims have merit. preparation and presentation of a return, an obligation arises that the return not be false as to any material matter. This
Added in 1996, § 514(a)(2) makes it a felony to pass, duty arises with the making of the return, without regard to whether there was an obligation to file one in the first place. [5] present, offer, issue, attempt or cause the same, or possess,
with intent to defraud, Nos. 02-1662/1673/1700/1703/ United States v. 11 12 United States v. Nos. 02-1662/1673/1700/1703/ 1736/1769/1771 Anderson, et al. Anderson, et al. 1736/1769/1771
any false or fictitious instrument, document, or other by any of the recipients, we agree with the court in Howick item appearing, representing, purporting, or contriving that because the “very purpose of the statute is to supplement through scheme or artifice, to be an actual security or the preexisting counterfeit laws by criminalizing bogus other financial instrument issued under the authority of obligations that are not copies of any actual obligation” the the United States, a foreign government, a State or other term “actual” in § 514(a)(2) cannot be given its most natural political subdivision of the United States, or an meaning. 263 F.3d at 1067 (emphasis in original). Instead, organization[.] it should be interpreted to encompass the idea of
“verisimilitude”—the quality of appearing to be true or real. Id. [7] The legislative history of this provision indicates that it was intended to cover “fictitious” instruments, as opposed to “counterfeit” instruments, in order to close a loophole in the Recognizing the infinite range of financial instruments, criminal statutes. United States v. Howick , 263 F.3d 1056, both genuine and fictitious, the court in Howick interpreted 1066-67 (9th Cir. 2001), cert. denied , 535 U.S. 946 (2002). the phrase “‘actual security or other financial instrument’” to The court in Howick articulated the distinction between mean “one that appears to be ‘actual’ in the sense that it bears counterfeit and fictitious documents as follows, id . at 1067: a family resemblance to genuine financial instruments” or, in
other words, “include[s] enough of the various hallmarks and A “counterfeit” obligation is a bogus document contrived indicia of financial obligations so as to appear to be within to appear similar to an existing financial instrument; a that class.” 263 F.3d at 1068. In this case, the government “fictitious” obligation is a bogus document contrived to presented testimony from William Kerr of the Office of the appear to be a financial instrument, where there is in fact Comptroller describing the sight drafts as having good no such genuine instrument, and where the fact of the physical quality (including microencoding, microprinting, a genuine instrument’s nonexistence is presumably
colored background, and an artificial watermark), and noting unknown by, and not revealed to, the intended recipient that their invalidity would not necessarily be apparent just of the document. from looking at them.
In this case, there was testimony that although there is a Finally, defendants assert that there was insufficient legitimate financial instrument known as a sight draft, the evidence of an intent to defraud because they made no United States Treasury has not used sight drafts in modern attempt to obtain a refund from the IRS. As the government history. Moreover, the United States Treasury maintains no points out, however, it was not necessary to prove defendants depository accounts against which an individual could draw requested a refund in order to establish that the sight drafts a check, draft, or any other financial instrument. The sight were presented with intent to defraud. Intent may be proven drafts at issue here were properly charged as fictitious
through circumstantial evidence, and there was evidence from instruments under § 514(a)(2). Yates asserts, without elaboration or citation to authority, § 7206(1) (counts 28-30 and 46-47). Sagorski specifically with employees of financial institutions, as well as judges, relies on the fact that the document examiner was unable to lawyers, and court officers. Special Agent Robert Walker identify him as having signed the 8300s that bore his name. testified that Sagorski admitted to having prepared the 8300s The witness did testify, however, that Sagorski authored all and sight drafts bearing his name and insisted that the IRS other entries on the form and that no conclusion could be
was a fictitious entity with no right to collect taxes. In made about the signatures because Sagorski’s handwriting addition, Sagorski was responsible for bringing Lawrence and Arndt into the conspiracy. [8]
exemplar was “very quickly executed and partially illegible.” Goodwin, on the other hand, relies on the fact that the document examiner could only identify him as the “probable Finally, Goodwin argues that it was error to have admitted preparer” of the 8300s bearing his name. another piece of evidence, the only sight draft purportedly
written by him, because it preceded the conspiracy. To the In addition to the expert witness testimony, the jury was contrary, the sight draft was dated May 21, 1999, and was entitled to consider both circumstantial evidence as well as endorsed on the reverse side to Jerry M. Beurkens on July 13, the rebuttable presumption afforded by 26 U.S.C. § 6064, 1999; well within the period of the conspiracy. Beurkens, a which provides that the fact that an individual’s name is
city attorney, testified that he had prosecuted Goodwin on a signed to the return is prima facie evidence that the return was traffic ticket several years earlier; received several documents signed by him. We have no difficulty finding that when the evidence and inferences are viewed in the light most favorable to the prosecution, there was sufficient evidence from which a rational trier of fact could conclude that making a reliable judgment about guilt or innocence.” Zafiro
necessary assurances. Moreover, the jury was properly v. United States , 506 U.S. 534, 539 (1993). A trial court’s instructed to separately consider the evidence as to each limiting instructions may “cure” such prejudice. Id . The defendant. United States v. Stull , 743 F.2d 439, 447 (6th Cir. defendant bears the burden of making a “strong showing of 1984). We find no abuse of discretion in the denial of factually specific and compelling prejudice resulting from a Sagorski’s motion for severance or mistrial.
IV.
[9] Go odw in also argues that this sight draft was neither the subject of
Several evidentiary claims are raised by defendants a substantive charge nor listed as an overt act in furtherance of the Anderson, Modderman, Sagorski, and Goodwin. We review conspiracy. The government may offer proof of overt acts not listed in the district court’s decisions concerning the admission of the indictm ent. United States v. Henson , 848 F.2d 1 374 (6th Cir. 1988). evidence for abuse of discretion. United States v. Middleton , The government also notes that this exhibit was admitted twice without objection from Goo dwin.
246 F.3d 825, 836 (6th Cir. 2001). Even if an abuse of discretion has occurred, “[a]ny error, defect, irregularity, or [10] At trial, counsel for Sagorski agreed with the district court’s chara cterization that the motio n was in essence one fo r mistrial. Nos. 02-1662/1673/1700/1703/ United States v. 17 18 United States v. Nos. 02-1662/1673/1700/1703/ 1736/1769/1771 Anderson, et al. Anderson, et al. 1736/1769/1771 variance that does not affect substantial rights must be allow a defendant to thwart prosecution by sending damaging disregarded.” F ED . R. C RIM . P. 52(a). material to the prosecutor. This is an unusual case in that the
letters and notices were relevant to the conspiracy charge and Anderson, joined by Modderman, claims error occurred were not themselves of an inflammatory nature. Moreover, when Agent Jon Street was allowed to testify concerning a defendants have not identified any questioning or argument box of documents which consisted of correspondence by the prosecutor relating to the correspondence that would
tend to inflame the jury. [11] received from the defendants and addressed to individuals including judges, prosecutors, and IRS investigators (the “Gateway” box). The essence of Anderson’s claim on appeal Sagorski claims that the district court erred in allowing is twofold: that it was an abuse of discretion to allow Agent Steven Baker to testify concerning items seized from testimony concerning the entire collection of documents the Anderson-Modderman residence. Specifically, defendant without admitting all of the documents; and that it was points to testimony about a letter from a bank in response to unfairly prejudicial because it allowed the jury to speculate correspondence from Sagorski; a copy of the alert from the about the voluminous “collective misdeeds” of the Comptroller’s Office to financial institutions about the defendants. We reject these contentions as meritless. fictitious sight drafts; excerpts from a book called “Accepted
for Value”; portions of pamphlets outlining the use of the The record reflects that Street testified generally concerning mantra; and literature referencing the “Kingdom of Heaven” the contents of the box to explain how the documents were group and other teachings. Defendant argues that the accumulated and organized, but did not include specifics evidence was hearsay, and claims it was irrelevant and highly about documents that were not admitted into evidence. In prejudicial because it branded the defendants as “anti- addition, the box was present so that it would be available for government” and because some of the references might have defense counsel to use in cross-examination. From the box,
called to mind similarly named cults. There is no indication, Street selected documents sent by various defendants that however, that an objection was made on either basis. As contained the same or very similar captions or verbiage. such, our review is for plain error. United States v. Thomas , Those selected documents were offered as exhibits to show 11 F.3d 620, 629-30 (6th Cir. 1993). the existence of and participation in the conspiracy. To the extent that the voluminous number of documents reflected This evidence was relevant to the question of the badly on defendants, it was not unfairly prejudicial. There defendants’ knowledge and intent and would not have been was no claim that the box did not contain the kind of offered for the truth of the matter asserted. Moreover, this documents that the exhibits represented. At least one was hardly the only evidence of “anti-government” sentiment defendant was able to clarify on cross-examination that none of the selected documents were sent by him.
concerted action by the defendants. Nos. 02-1662/1673/1700/1703/ United States v. 19 20 United States v. Nos. 02-1662/1673/1700/1703/ 1736/1769/1771 Anderson, et al. Anderson, et al. 1736/1769/1771 on the part of the defendants. Finally, it would be pure This determination is not challenged on appeal. To be speculation to conclude that references to the “Kingdom of included as an intended loss, the district court must find the Heaven” group might have led the jurors to associate defendant intended the loss; it was possible for the defendant defendants, specifically Anderson and Modderman, with a to cause the loss; and the defendant completed or was about cult known by a similar name. We find no reversible error. to complete, but for interruption, all of the acts necessary to
bring about the loss. Watkins , 994 F.2d at 1196.
V.
Consequently, the district court categorically excluded the Five defendants—Anderson, Shriver, Sloboda, Goodwin, value of all the 8300s, leaving a base offense level of 6 for the and Sagorski—appeal from certain aspects of the district § 7206 offenses. The court then discriminated between sight court’s calculation of their adjusted offense level under drafts that would be counted as intended losses, excluding United States Sentencing Guidelines Manual (USSG) § 2F1.1 those for more than $100,000 and including those that related (2000). This guideline applies to both the group of offenses
to an existing debt or an attempt to obtain credit. In this way, relating to the sight drafts and those relating to the false the district court determined that Anderson and Sagorski 8300s, and provides for a base offense level of 6. USSG would each receive a 12-level increase in the offense level § 2F1.1(a). The guideline applicable to the conspiracy relating to their convictions under § 514(a)(2) for intended charge, USSG § 2X1.1(a), incorporates this base offense level losses of more than $1.5 million and less than $2.5 million and any specific offense characteristics for intended conduct under § 2F1.1(b)(1)(M). Anderson and Sagorski claim that that can be established with reasonable certainty. Because a this was error. broad range of offenses are covered by USSG § 2F1.1, the guidelines include a number of specific offense characteristics A. Intended Loss and § 514(a)(2) Offenses – the most significant of which is the incremental increase of
At the outset, Anderson argues that no sight drafts should up to 18 levels based on the value of the loss or intended loss. USSG § 2F1.1(b)(1). [12] have been included as intended losses because they were so
obviously bogus that it was impossible for the scheme to Although the probation department recommended that the succeed in causing a loss. In Khan , we explained that the offense level be increased based on the face value of all the incremental increases for intended losses “assume a sight drafts and 8300s attributable to each defendant, the fraudulent scheme that would have created some actual loss district court rejected that approach as inconsistent with this but for the interruption of the scheme by detection or failure court’s precedent concerning the calculation of intended to carry out all the steps necessary to succeed.” 969 F.2d at losses. United States v. Watkins , 994 F.2d 1194 (6th Cir. 221. This limitation applies when the impossibility of 1993); United States v. Khan , 969 F.2d 218 (6th Cir. 1992). pecuniary loss is “entirely unrelated to the fraud or its
discovery.” Id. at 220. See United States v. Ly , No. 98-3783, 1999 WL 196573 (6th Cir. Mar. 29, 1999) (unpublished [12] USSG § 2F1.1 was repealed and amende d provisions were consolidated in USSG § 2B1.1, effective November 1, 2001. See USSG § App. C, amendment 617. Although defendants were sentenced after the effective d ate, the o ld provision was used in order to avoid ex po st facto prob lems. Nos. 02-1662/1673/1700/1703/ United States v. 21 22 United States v. Nos. 02-1662/1673/1700/1703/ 1736/1769/1771 Anderson, et al. Anderson, et al. 1736/1769/1771 decision). While no sight drafts were accepted for value in culpable for the conduct of Arndt and Boerma because “one this case, it is because the fraud was detected. [13]
can say without a shadow of a question that he knew what [Arndt] and her son Boerma were doing, and the amounts that
Anderson and Sagorski both claim the district court erred they defrauded and intended to defraud are culpable to him as by holding them accountable for sight drafts written by a co-conspirator because it was clearly foreseeable within that others. To be considered “relevant conduct,” the conduct portion of the conspiracy.” Because Sagorski has not must have been (1) reasonably foreseeable to the defendant demonstrated that the district court’s findings were either and (2) undertaken in furtherance of the jointly undertaken inadequately individualized or clearly erroneous, we find no criminal activity. USSG § 1B1.3(a)(1)(B) and comment. error in the 12-level adjustment in the offense level under (n.2) (2000); United States v. Orlando , 281 F.3d 586, 600 § 2F1.1. (6th Cir.), cert. denied , 537 U.S. 947 (2002). The district court must make individualized findings regarding these Anderson was held accountable for intended losses of requirements in order to differentiate between coconspirators. $2,205,749, of which only $31,000 was attributable to sight 281 F.3d at 600. drafts she wrote herself. This resulted in a 12-level increase
in the offense level for the § 514(a)(2) convictions. Anderson Sagorski does not contest the amount of losses representing argues, as she did at sentencing, that it was not reasonably sight drafts he wrote himself, to the tune of about $820,000, foreseeable that her “students” would write these sight drafts. but only disputes the inclusion of sight drafts written by She claims she merely explained the redemption theory and Arndt and her son, Chad Boerma, on the grounds that the the use of the sight drafts and could not control what her court failed to make particularized findings concerning the “students” did with that “knowledge.” The issue, however, is foreseeability of their conduct and the scope of the joint not control but foreseeability. activity. The record shows, however, that the district court made the requisite findings. [14]
We find no error in the finding that it was reasonably foreseeable to Anderson that her coconspirators would write The district court found that Sagorski recommended the the sight drafts in question. She explained how the sight scheme to Arndt, and arranged for Anderson and Modderman drafts could be used to escape debts and secure credit, showed to teach her. Arndt explained the theory to her son, who, with them how to fill out the sight drafts, and encouraged the filing prompting from Sagorski, wrote a series of sight drafts. The of false 8300s against those who rejected the sight drafts. The district court concluded that Sagorski should be found only coconspirator Anderson did not personally instruct was
Boerma. Not only did Anderson fail to object to those sight drafts, but any error in the inclusion of the $156,000 in sight whom Shriver exerted control, we can infer the necessary defendant. Conceding that about half of the 8300s that were finding from the district court’s explanation that she had a the subject of her convictions under § 7206(2) targeted federal leadership role in that she secured the sight drafts, met with or state employees, Anderson argues that it was error to apply and connected people, and had a leadership role both pretrial the enhancement to all of those counts. However, the § 7206 and at trial. United States v. Dupree , 323 F.3d 480, 494 (6th convictions were grouped together without objection. Cir. 2003); see also Caseslorente , 220 F.3d at 736 (although preferable, it is not required that the district court state the C. Upward Departures under USSG § 5K2.0 and § 5K2.7 [16] specific facts relied on in applying § 3B1.1 enhancement). The record indicates that Shriver was an organizer in the conspiracy and an instigator among the defendants at trial. We have reviewed a district court’s decision to depart The government notes that there can be little doubt that she upward or downward from the sentencing guideline range exerted control with respect to the participation of her under an abuse of discretion standard. United States v. husband. It was not clearly erroneous for the district court to Chance , 306 F.3d 356, 393 (6th Cir. 2002). Recent find the enhancement applied to Ruth Shriver. amendments to 18 U.S.C. § 3742(e) require de novo review
of whether a departure was based on proper factors, but [16] In a novel claim, Anderson argues that although proper notice was [15] Anderson also questions the accuracy of some of the figures sent regarding possible departure under § 5K2.7, the district court had an included by the district court and complains that the adding machine tape obligation to amend that notice to advise her regarding the possibility of referenced by the district court is not part of the record. Inviting this court departure under § 5K2.0. We find no error, however, because the to remand to expand the record, Anderson asserts that there are gove rnment’s prehearing motio n for departure ad equately disclosed that discrepancies in the totals of the sight drafts written by Arndt and Boerma. departure under § 5K 2.0 was at issue. Burns v. United States , 501 U.S. Anderson did not object to or ask for c larification conc erning the amounts 129, 138 (1991) (notice is required before the district court may depart that were being included in the loss calculation, and we find no plain upward “on a ground not identified as a ground for departure in the error. presentence report or in a prehearing submission by the Government”). Nos. 02-1662/1673/1700/1703/ United States v. 25 26 United States v. Nos. 02-1662/1673/1700/1703/ 1736/1769/1771 Anderson, et al. Anderson, et al. 1736/1769/1771 review of the extent of such a departure continues to be for governmental function, the court may increase the sentence abuse of discretion. See PROTECT Act of 2003, § 401(d), above the authorized guideline range to reflect the nature and Publ. L. No. 108-21, 117 Stat. 650 (2003). Because we extent of the disruption and the importance of the would affirm the upward departures under either standard, we governmental function affected.” The district court found that need not decide whether this modification applies to appeals the disruptions during trial represented significant disruption pending as of the effective date of the PROTECT Act. of a governmental function for which upward departures
would be warranted in calculating the offense levels for both The applicable guidelines allow for upward departures the § 514(a)(2) and § 7206 offenses. Anderson, Sloboda, and when “there exists an aggravating . . . circumstance of a kind, Shriver appeal from these departures. or to a degree, not adequately taken into consideration by the Sentencing Commission in formulating the guidelines.” 1. Shriver 18 U.S.C. § 3553(b); see USSG § 5K2.0 (2000). When a
Convicted of one count each of conspiracy and violating factor being considered is an encouraged factor, the court may § 514(a)(2), Shriver had an adjusted offense level of 10 prior depart if the applicable guideline does not already take the to any departure. The district court found this offense level factor into consideration, or, if already taken into account, it did not accurately reflect the seriousness of her conduct and is present to a degree that makes the case different from the granted an 8-level upward departure under USSG § 5K2.0. In ordinary case in which it is present. Koon v. United States , explaining the reasons for this departure, the court noted that 518 U.S. 81, 95-96 (1996).
the one sight draft at issue for $1.75 million was sent to the Once the district court excluded all of the false 8300s and IRS at a time when Ruth and Jack Shriver had a tax obligation many of the sight drafts from the loss calculations, the offense of $114,000. Given the amount of the sight draft, however, level could not be increased under USSG § 2F1.1(b)(1) for the district court did not increase the base offense level to any of the convictions under § 7206, or for Ruth Shriver’s account for intended losses. Nonetheless, the court found that conviction under § 514(a)(2). Granting the government’s the sight draft sent to the IRS was obviously designed to motion for upward departures under USSG § 5K2.0, the commit fraud and the tax liability related to her own anti- district court found that without additional increases the government animus. The district court also found that, in offense level would not reflect the seriousness of the addition to the enhancement under USSG § 3B1.1(c), the defendants’ conduct. As the commentary to USSG § 2F1.1 extent of her participation in the larger conspiracy had not explains: “In cases in which the loss determined under been taken into account. In deciding to upwardly depart 8 subsection (b)(1) does not fully capture the harmfulness and levels, the district court observed that a loss of $114,000 seriousness of the conduct, an upward departure may be would alone result in a 6-level increase in the offense level
under USSG § 2F1.1(b)(1). [17] warranted.” USSG § 2F1.1, comment. (n.11). Shriver, Anderson, Sloboda, and Goodwin challenge these departures.
In addition, the district court provided defendants with [17] notice of its intention to consider upward departure under The court later rejected the government’s request for further enhancement for more than minimal planning under USSG § 2F1.1(c) USSG § 5K2.7, which provides, in part, that “[i]f the
because Shriver’s overall participation in the conspiracy was factored into defendant’s conduct resulted in a significant disruption of the USSG § 5K2 .0 departure. Nos. 02-1662/1673/1700/1703/ United States v. 27 28 United States v. Nos. 02-1662/1673/1700/1703/ 1736/1769/1771 Anderson, et al. Anderson, et al. 1736/1769/1771
Turning then to the question of departure under USSG loss calculation does not reflect the harmfulness and § 5K2.7, the district court explained that additional upward seriousness of the conduct. Anderson also argues that this departure was “absolutely necessary” because Shriver was departure resulted in double counting when combined with one of the leaders of the disruptive behavior and because she the official-victim enhancement under USSG § 3A1.2. In repeatedly engaged in the disruptive behavior, all of which particular, she emphasizes that more than half of the targets demonstrated contempt for the process and everyone from of the false 8300s were government officials. However, the judge to jury. As a result, the district court found Shriver’s district court explained the departure as warranted because the conduct warranted an additional 6-level increase in the base offense level of 6 did not take into account the large offense level. She contends that this departure was an abuse number of false 8300s that Anderson had aided, assisted, or of discretion because her behavior during trial was adequately counseled others to file. This is distinct from the taken into account by the 2-level enhancement for obstruction enhancement based on the status of the targets themselves. of justice. The district court found otherwise, emphasizing The USSG § 5K2.0 departure did not result in double that the significant disruption of the trial was separate from counting of the same factor. Sloboda and Goodwin, who join the obstruction of the grand jury and contempt proceedings. in this argument, also received a 6-level departure under We agree. [18]
USSG § 5K2.0 based on the number of false 8300s they each filed in an attempt to subvert the IRS and harass the targets (in each case a dozen). [20]
2. Anderson The district court granted a 6-level upward departure under Appealing the 4-level upward departures under USSG
USSG § 5K2.0 with respect to Anderson’s § 7206 offenses § 5K2.7, Anderson argues, as she did at sentencing, that they only, after finding that the base offense level of 6 did not constituted double counting of the same conduct addressed by account for the seriousness of her conduct. In addition, she
the 2-level enhancement for obstruction of justice. As with received a 4-level upward departure in the offense level for Shriver, however, it is clear that these departures addressed both the § 514(a)(2) offenses (counts 2-3) and the § 7206(2) separate conduct from the obstruction of justice enhancement. offenses (counts 50-73) under USSG § 5K2.7. [19]
Alternatively, Anderson suggests the USSG § 5K2.7 departures were error because the trial court could have
Taking issue with the USSG § 5K2.0 departure, Anderson exercised its contempt powers during trial. mistakenly asserts that such a departure must relate to a financial loss. This assertion is refuted by the earlier quoted The district court considered this possibility, but found it commentary to USSG § 2F1.1 authorizing departure when the inappropriate because to bring criminal contempt charges at
trial could have “anointed these people with martyrdom.” Nos. 02-1662/1673/1700/1703/ United States v. 29 1736/1769/1771 Anderson, et al. The district court also explained that “this is not all about contempt. This whole trial, this whole issue, redemption theory, . . . was illustrative of contempt for all authority. Not just judicial authority, but all authority. This contempt for judicial authority was just one aspect of the contempt for governmental authority within a democracy.” We find no error in the determination that upward departures were appropriate under USSG § 5K2.7.
In a related “piling on” argument, Anderson suggests the departures were not necessary because removing her and the others from the trial was punishment enough. That was a question of courtroom management, with defendants being invited to return to the courtroom twice every day, and was not adequately reflected in the sentencing calculations absent the departure. Finally, Anderson challenges the extent of the departures as unreasonable. We cannot say that the 4-level departures under USSG § 5K2.7 represent an abuse of discretion. In particular, the district court emphasized that the conduct involved multiple incidents of disruptive conduct that significantly disrupted an important judicial function. [21]
AFFIRMED.
NOTES
[*] The Honorable Danny C. Reeves, United States District Judge for the Eastern District of Kentucky, sitting by designation. 1 Nos. 02-1662/1673/1700/1703/ United States v. 3 4 United States v. Nos. 02-1662/1673/1700/1703/ 1736/1769/1771 Anderson, et al. Anderson, et al. 1736/1769/1771 Rodger Bruce Yates, Francis Albert Sagorski, Ruth Elaine conspiracy to include the creation and offering of 193 Shriver, Susan Elaine Sloboda, and Robert Lee Goodwin, Jr., fictitious sight drafts purporting to be drawn on the United raise various challenges to their respective convictions and/or States Treasury with an aggregate face value of more than
[3] The mantra consisted of the following three questions and demand:
[5] Although Anderson claims error in the failure to give a requested
[6] instruction on willfulness, the record shows that the jury was instructed Anderson does not appeal her convictions for violation of concerning “willfulness.” The district court denied a request that § 514(a)(2) (counts 2-3), or her conviction on the conspiracy charge “willfully” be added to the verdict form. (count 1).
[7] that it was obvious from the face of the sight draft that it was In contra st with counterfeit statutes, § 514(a)(2) cannot be not an “actual” financial instrument within the meaning of interpreted to includ e a “similitude” requirement; that is, that the document bear such likeness to genuine curren cy as is calculated to § 514(a)(2). While the sight drafts were not in fact accepted deceive an honest unsuspecting person of ordinary observation. Nos. 02-1662/1673/1700/1703/ United States v. 13 14 United States v. Nos. 02-1662/1673/1700/1703/ 1736/1769/1771 Anderson, et al. Anderson, et al. 1736/1769/1771 which the jury could infer that defendants knowingly sent on 11 false 8300s directed at judicial officers, police, and worthless sight drafts drawn on the United States Treasury attorneys that collectively reported over $140 million in with the intention that they be accepted for value. financial transactions which never occurred. Goodwin also refused to cooperate with the grand jury, sent notices to court C. Sufficiency officers, and joined with those who acted to disrupt the trial. Defendants Goodwin and Sagorski argue that the evidence Sagorski signed 34 false sight drafts totaling $49 million was insufficient to support their convictions under 26 U.S.C. and filed 16 false 8300s reporting nonexistent transactions
[8] Sagorski and Goodwin signed the false 8300s that bore their Sago rski, a customer in Lawrence’s muffler shop, heard Lawrence’s names. anger at police and the court system and arranged for him to m eet with Anderson and M odderman at their home. Sagorski also gave Lawrence Next, defendants Sagorski and Goodwin challenge the some audio tapes that included anti-government rhetoric. Under And erson ’s direction, Lawrence signed false 83 00s that were filed with sufficiency of the evidence tying them to the charged the IRS reporting transactions with individuals against whom Lawrence conspiracy. Both defendants argue first that they never joined bore grievances. Arndt, who worked for Sagorski, had severe financial the conspiracy to defraud the United States by obstructing the problems arising from her son’s use of her credit cards. Sagorski referred IRS. Not only does this ignore that the conspiracy had her to Anderson and Modderman and provided her with sight drafts on multiple objectives, but also disregards the evidence one occasion. Arndt sent more than 50 sight drafts and filed false 830 0s. She introduced her son and sister to the schem e and they, in turn, also concerning their participation. Goodwin’s name was signed wrote worthless sight drafts. Nos. 02-1662/1673/1700/1703/ United States v. 15 16 United States v. Nos. 02-1662/1673/1700/1703/ 1736/1769/1771 Anderson, et al. Anderson, et al. 1736/1769/1771 from Goodwin, including the sight draft; and was the target of joint trial.” Moore , 917 F.2d at 221. We adhere to the view a false Form 8300 filed with the IRS.
[9] that the jury must be presumed capable of sorting out the evidence against each defendant separately. Id. at 220. III. In denying Sagorski’s motion, the district court observed at Sagorski claims error in the denial of his motion for the outset that there had been a noticeable difference in the severance or mistrial on the grounds that he was prejudiced appearance, demeanor, and attentiveness of the three by the disruptive behavior of his codefendants. Whether defendants who did not disrupt the proceedings (who were properly articulated as a question of prejudicial joinder also on bond) as compared to the nine defendants who requiring severance, or a motion for mistrial resulting from engaged in the disruptive behavior. The three nondisruptive prejudicial joinder, the record reflects that the district court defendants were also physically separated from the others, addressed the appropriate considerations for determining due to the configuration of the tables in the small courtroom. whether the defendant could demonstrate he was prejudiced. In addition, the court noted that much of the evidence related See United States v. Moore , 917 F.2d 215, 220 (6th Cir. to the sight drafts or 8300s allegedly prepared by the various 1990). Our review of a district court’s decision on a motion individuals. for severance or for mistrial is for abuse of discretion. United States v. Lloyd , 10 F.3d 1197, 1215 (6th Cir. 1993) Finally, in considering the impact of the disruptive (prejudicial joinder); United States v. Chambers , 944 F.2d behavior, the court indicated that the outbursts were short and 1253, 1263 (6th Cir. 1991) (mistrial).
[10] the defendants were quickly escorted out of the courtroom. In fact, the court suggested that Sagorski’s good behavior Relief from prejudicial joinder is required “only if there is may have served to impress the jury and differentiate him a serious risk that a joint trial would compromise a specific from the disruptive defendants. No further disruptions trial right of one of the defendants, or prevent the jury from occurred, as the nine defendants were unwilling to give the
[11] In a related argum ent, Good win asserts that do cuments received by Anderson and Modderman contend that it was an improper the government during trial, including a letter prepared by Goodwin from plea for sympathy to mention that defendants directed notices the holding cell and handed to a Deputy United States Marshal, were and other harassing correspondence to the prosecutor irrelevant, outside the scope of the conspiracy, and unduly prejudicial. The documents, and especially Goodwin’s letter, were relevant to the personally. In overruling objections to such evidence, the alleged conspiracy as they supported the contention that there was district court observed that to exclude the evidence would
[13] drafts written by Boerma would be harmless because even The amendments abandon this circuit’s interpretation of intended loss and clarify that intended loss “includes intended pecuniary harm that would have b een impossible or unlikely to occur.” USSG § 2B1.1, comment. (n.2) (eff. Nov. 1, 2001 ).
[14] The addition of these amounts to the defendant’s intended losses “bum ps” the increase in the base offense level from 11 levels (for losses of more than $800,000) to 12 levels (for losses of more than $1.5 million). Nos. 02-1662/1673/1700/1703/ United States v. 23 24 United States v. Nos. 02-1662/1673/1700/1703/ 1736/1769/1771 Anderson, et al. Anderson, et al. 1736/1769/1771 without it the intended losses would still greatly exceed $1.5 Anderson appeals from the 3-level enhancement imposed million.
[15] under USSG § 3A1.2(a), which applies if “the victim was a government officer or employee . . . and the offense of B. Enhancements under USSG § 3B1.1 and § 3A1.2 conviction was motivated by such status.” This enhancement was added to the offense level for the § 7206(2) offenses Shriver received a two-level enhancement under USSG relating to the false 8300s. Although Anderson challenges the § 3B1.1(c) for her role in the offense as “an organizer, leader, enhancement on the grounds that the target was really the manager, or supervisor” of the criminal activity. To qualify government, rather than government officials, the district for this adjustment, the defendant must have exerted control court did not clearly err in finding that the targets of the false over at least one other participant in a supervisory, 8300s covered individual government officials who were managerial, leadership, or organizational capacity. United targeted because of their positions. For example, individuals States v. Caseslorente , 220 F.3d 727, 734-35 (6th Cir. 2000). targeted included an officer who issued a ticket to a defendant Although the district court did not identify an individual over and a judge who presided over a court matter involving a
[18] W ith a total offense level of 24 and a criminal history score of 0, the guideline range was 51 to 60 months. Shriver was sentenced to 60
[20] mon ths’ imprisonm ent on each count, to run co ncurrently. Sloboda was sentenced to concurre nt terms of 37 m onths’ imprisonment on the conspiracy count and 36 months on each of the two
[19] Anderson was sentenced to 6 0 mo nths on the conspiracy cou nt, § 720 6 conviction s. Goodw in received concurrent terms o f 46 months’ 120 months on the § 514(a)(2) convictions, and 36 months on the § 7206 imprisonment on the conspiracy count and 36 months each on his two convictions, to run concurrently. § 7206 co nvictions.
[21] Sloboda, who ad opts And erson’s argum ents on this issue, also received a 4-level upward departure under USSG § 5K2.7 for the same reasons.
