UNITED STATES OF AMERICA v. JEFFREY M. REED
No. 22-4258
United States Court of Appeals for the Fourth Circuit
July 31, 2023
Appeal from the United States District Court for the Southern District of West Virginia, at Bluefield. David A. Faber, Senior District Judge. (1:20-cr-00066-1)
Argued: March 10, 2023
Decided: July 31, 2023
Before WILKINSON, HARRIS, and RUSHING, Circuit Judges.
Affirmed by published opinion. Judge Rushing wrote the opinion, in which Judge Wilkinson and Judge Harris joined.
ARGUED: David Robert Bungard, OFFICE OF THE FEDERAL PUBLIC DEFENDER, Charleston, West Virginia, for Appellant. Erik S. Goes, OFFICE OF THE UNITED STATES ATTORNEY, Charleston, West Virginia, for Appellee. ON BRIEF: Wesley P. Page, Federal Public Defender, Jonathan D. Byrne, OFFICE OF THE FEDERAL PUBLIC DEFENDER, Charleston, West Virginia, for Appellant. William S. Thompson, United States Attorney, OFFICE OF THE UNITED STATES ATTORNEY, Charleston, West Virginia, for Appellee.
A jury convicted Jeffrey M. Reed of two crimes arising out of an elaborate ploy to intimidate an Internal Revenue Service (IRS) agent into halting her efforts to collect his delinquent tax debt. On appeal, Reed challenges the validity of both convictions along with three enhancements the district court imposed at sentencing. We affirm.
I.
Reed owed the IRS a substantial amount in past-due taxes. After the IRS‘s ordinary collection efforts failed, the agency transferred Reed‘s case to its Abusive Tax Avoidance Transactions division, a specialized unit that handles difficult cases involving tax avoiders and repeat offenders. An IRS agent using the agency-approved pseudonym T.L. Blake was assigned to pursue Reed‘s case. Initially, Blake sent Reed a collection letter and attempted to visit him at home, but to no avail. Blake also sent a notice of levy to Reed‘s employer, the Holiday Lodge & Conference Center in Oak Hill, West Virginia, directing the hotel to garnish Reed‘s wages. When the Holiday Lodge did not respond, Blake traveled to West Virginia and visited the hotel. There, she served a final notice of levy directing the hotel to begin garnishing Reed‘s wages or risk facing a penalty.
The hotel‘s owner, Sara Nelson, decided to comply with Blake‘s directive and garnish Reed‘s wages. When Nelson told Reed her intentions, Reed became upset and tried to convince Nelson to send a letter on his behalf, written by him, challenging the garnishment. In one of Reed‘s draft letters, he included a thinly veiled threat to sue Nelson if she garnished his wages. Nelson declined to send a letter for Reed, garnished his wages,
Around the same time, Reed mailed back to the IRS copies of documents Blake had served on the hotel and mailed to Reed. In an accompanying letter, Reed claimed the documents were instruments good for the value of his debt. Frivolous avoidance tactics like this were not new to Reed. Years prior, in 2013, the IRS sent Reed a letter warning him against such conduct. Blake referred the mailing to the IRS‘s Frivolous Return Unit, which handles such correspondence.
In response to Blake‘s attempts to collect his taxes, Reed filed a lien and various related documents against Blake and Nelson with the Mercer County, West Virginia clerk alleging the two owed him nearly $5 million arising from 165 constitutional violations they supposedly committed against him. Reed then recorded financing statements purporting to perfect security interests in the lien. The financing statements listed Nelson and Blake as lien debtors and asserted that Reed, as the creditor, had a security interest in their real and personal property because of the supposed debt. Reed recorded one financing statement against Blake in Maryland and one against Nelson in West Virginia, the latter of which he twice amended. Before he filed the lien and related documents, Reed sent “courtesy notices” of some of these documents to IRS officials on at least three occasions to apprise them of “the legal action” he was taking against Blake. J.A. 460. He also sent
When Blake learned of the financing statement Reed had filed against her, she referred it to the Treasury Inspector General for Tax Administration, which investigated the filing. As part of the investigation, two officers interviewed Reed, who voluntarily spoke with them at his home. Reed admitted creating and filing the lien and financing statement against Blake, acknowledged receiving the 2013 letter warning him against frivolous tax-avoidance tactics, and initialed each document. Reed explained he developed the strategy to file a lien and financing statement by “talk[ing] to individuals and research[ing] it on the internet and that [he] had concluded that this was going to be the only way he could get the IRS to leave him alone.” J.A. 151. Although Reed disclaimed an intention to try to enforce the lien, he told the officers he could enforce it “at any time” and that the filings “would not go away without him signing off, or making them go away, that they would exist continuously“; he also acknowledged that the filings could impact Blake‘s credit score and ability to obtain credit. J.A. 152.
Although Reed never attempted to enforce the lien, his filings negatively impacted both Blake and Nelson. When Blake tried to purchase a home, she had to list her pseudonym as an alias on her mortgage application. The lender then found Reed‘s lien, requiring Blake to undertake significant efforts to clear up the matter to complete her
In May 2020, a grand jury charged Reed with filing or attempting to file a false lien or encumbrance against a federal employee in violation of
When the Government concluded its case-in-chief, Reed moved for a judgment of acquittal. The district court reserved ruling on the motion, and the jury convicted Reed on both counts. At sentencing, the court denied Reed‘s motion for acquittal and explained the decision in a written order. The court overruled Reed‘s objections to various sentencing enhancements and sentenced Reed to 60 months’ imprisonment on Count 1 and 36 months’ imprisonment on Count 2, to run concurrently, followed by 3 years of supervised release. Reed appealed, and we have jurisdiction under
Reed contests the sufficiency of the evidence supporting his convictions on both counts. Viewing the evidence in the light most favorable to the Government, we will uphold a conviction if substantial evidence supports the jury‘s verdict. See United States v. Mathis, 932 F.3d 242, 258 (4th Cir. 2019). “Substantial evidence is evidence that a reasonable finder of fact could accept as adequate and sufficient to support a conclusion of a defendant‘s guilt beyond a reasonable doubt.” United States v. Hackley, 662 F.3d 671, 678 (4th Cir. 2011) (internal quotation marks omitted). We do not “assess witness credibility,” and we presume “that the jury resolved any conflicting evidence in the prosecution‘s favor.” United States v. Savage, 885 F.3d 212, 219 (4th Cir. 2018) (internal quotation marks omitted). A defendant “bears a heavy burden” to justify reversal under this standard. Id. (internal quotation marks omitted).
A.
Count 1 of the superseding indictment charged Reed with filing and attempting to file a false lien or encumbrance against Blake in retaliation for her efforts to collect his past-due taxes. At trial, the Government rested on the theory that Reed attempted to file a false lien against the IRS agent who was working to collect his overdue taxes and only failed to complete the crime because he used Blake‘s pseudonym instead of her real name on the lien. The jury accepted that argument. On appeal, Reed contends that his attempt conviction is invalid because he filed the lien against a pseudonym, and so he did not attempt to file it against an “individual,” as required under Section 1521. We disagree.
Because Section 1521 covers attempts and conspiracies, “the statute is not confined to completed acts” and “can be violated without completed conduct.” Neal, 776 F.3d at 653; see United States v. Jordan, 851 F.3d 393, 397–398 (5th Cir. 2017). To obtain a conviction on an attempt theory, the Government had to prove that (1) Reed “had culpable intent to commit the crime” and (2) “he took a substantial step towards completion of the crime that strongly corroborates that intent.” United States v. Engle, 676 F.3d 405, 419–420 (4th Cir. 2012).
The evidence against Reed on Count 1 was overwhelming. Reed admitted to Treasury Department investigators that he developed his scheme as “retaliation for the [IRS] going after him” and with the intent “to get the IRS to leave him alone.” J.A. 151,
Despite this evidence against him, Reed argues that he did not attempt to file a false lien or encumbrance against an “individual” within the meaning of Section 1521 because he filed the lien against “T.L. Blake,” the IRS agent‘s pseudonym. According to Reed, the statute does not apply to fictitious persons and his mistake about Blake‘s real name precludes criminal liability.
We agree with the district court that Reed‘s argument misses the mark because he attempted to file the lien against the property of a real federal employee. Even accepting Reed‘s definitions of “individual” for the sake of argument—“a single human being” or “a private or natural person“—Blake‘s use of a pseudonym does not make her any less an “individual described in section 1114.” Opening Br. 17–18 (internal quotation marks omitted). Blake was a federal employee and a “natural person” who testified at trial. She used a pseudonym while on the job pursuant to a statute and IRS rules allowing her to do so. See
The use of a pseudonym is fundamentally different from the creation of a wholly fictitious persona. For example, Reed relies on United States v. Haas, 986 F.3d 467, 472, 479–480 (4th Cir. 2021), which concerned information about nonexistent children used to lure a suspect during a sex-trafficking investigation. See id. at 472, 479–480. Interpreting a provision of the Sentencing Guidelines, we noted that “the term ‘individual‘” as used there did not “unambiguously include[] fictitious victims.” Id. at 479 n.6. The problem for Reed, aside from the different statutory context, is that Blake is a real person—and a real IRS agent—working under an alias. She is no more fictitious than George Eliot or Mark Twain.
At best, Reed‘s argument amounts to a factual impossibility defense, which “exists where the objective is proscribed by the criminal law but a factual circumstance unknown to the actor prevents him from bringing it about.” United States v. Hamrick, 43 F.3d 877, 885 (4th Cir. 1995) (internal quotation marks omitted). Reed doesn‘t dispute on appeal that he attempted to file a false lien against the IRS agent who was working to collect his overdue taxes; he simply argues that his mistake about her real name prevented him from
Because the Government presented ample evidence to convict Reed of attempting to file a retaliatory false lien against Blake, we affirm his conviction on Count 1.
B.
The jury also convicted Reed on Count 2, which charged a violation of the so-called “Omnibus Clause” of
Under Marinello, the Government had to prove that a “nexus” existed “between [Reed‘s] conduct and a particular administrative proceeding.” Id. at 1109. This is because the phrase “due administration of [the Tax Code]” in the Omnibus Clause,
Reed argues only that Blake‘s actions were routine IRS work and not the kind of targeted administrative action that Marinello requires. He does not contest the jury‘s finding that he corruptly endeavored to obstruct or impede Blake‘s administration of federal tax law. Nor does he challenge the jury instructions articulating the elements of the crime. We conclude that substantial evidence supported the jury‘s finding that Blake‘s enforcement efforts were a “particular administrative proceeding” such as “an investigation or audit” and not “routine day-to-day work carried out in the ordinary course of business by the IRS.” J.A. 385–386 (jury instructions).
By the time Blake was assigned to Reed‘s case, the IRS‘s regular collection efforts had already failed, and the IRS had transferred Reed‘s case to a specialized division. In fact, the IRS had been trying to collect taxes from Reed for years. After being assigned to Reed‘s case, Blake completed “an analysis of the case,” “[i]ssued correspondence to [Reed],” and “[t]ried to make field contact” by visiting Reed at home. J.A. 209. She then issued a notice of levy to Reed‘s employer, and when that produced no response, she traveled to West Virginia and personally visited the Holiday Lodge to serve a final demand that the hotel garnish Reed‘s wages. These efforts were far from routine IRS work carried out in the ordinary course and instead were a targeted investigation into and enforcement action against Reed‘s persistent refusal to pay taxes. See Graham, 981 F.3d at 1259
In response, Reed raises several unpersuasive arguments. First, he contends Blake‘s work was routine because she did no investigation to determine “the nature or amount of the delinquency.” Opening Br. 25. But the jury heard that Blake inherited Reed‘s case from other revenue officers who had made unsuccessful collection attempts for years. And Blake testified that she completed “a normal investigation” that included undertaking “an analysis of the case and all the actions that had taken place prior to [her] assignment.” J.A. 209. Her analysis of the case and subsequent efforts to collect these past-due amounts can qualify as targeted administrative action without necessitating a recalculation of the delinquency. Second, Reed relies on Blake‘s trial testimony that garnishing wages was a part of her “day-to-day duties” and her “normal course of business.” J.A. 268. Yet what constitutes routine work for an officer in a specialized division that handles difficult cases and repeat tax avoiders does not define what is routine for the whole agency.
Third, Reed cites data indicating that in 2020 and 2021, the IRS sent several hundred thousand notices of levy annually and argues this shows that garnishing wages is a routine, day-to-day IRS action. See IRS, Internal Revenue Service Data Book, 2021 59 (2022). However, data from the same years also shows the IRS received over 157 million individual income tax returns in 2020 and over 167 million such returns in 2021. See id. at 4-5. The vast disparity between the total numbers of individual returns and notices of levy rebuts Reed‘s argument that garnishments are akin to “routine administrative
III.
Reed also challenges his sentence on appeal, disputing the district court‘s application of three sentencing enhancements. In assessing whether a sentence is procedurally unreasonable because of a misapplication of the Guidelines, we review the district court‘s legal conclusions de novo and factual findings for clear error. See United States v. Morehouse, 34 F.4th 381, 387 (4th Cir. 2022). “‘Where a Guidelines application involves a mixed question of law and fact, the applicable standard turns on the nature of the circumstances at issue.‘” United States v. Dodd, 770 F.3d 306, 309 (4th Cir. 2014) (quoting United States v. Adepoju, 756 F.3d 250, 256 (4th Cir. 2014)). “If the application turns on a question of fact, the clear error standard applies; if it turns on a legal interpretation, de novo review is appropriate.” Id.; see Adepoju, 756 F.3d at 256 (“If the application is ‘essentially factual,’ we apply the clearly erroneous standard.” (quoting United States v. Daughtrey, 874 F.2d 213, 217 (4th Cir. 1989))).
Reed first argues the district court erroneously applied a six-level enhancement to Count 1 under U.S.S.G. § 2A6.1(b)(1). That Guideline, which applies to “threatening or harassing communications,” “hoaxes,” and “false liens,” calls for a six-level increase “[i]f the offense involved any conduct evidencing an intent to carry out such threat.” U.S.S.G.
The district court applied Section 2A6.1(b)(1) because Reed sent “courtesy notices” to various IRS officials advising them of legal action he was initiating against Blake and demonstrated his intent to carry out those threats by actually filing the false lien and related financing statement. In support, the court relied on United States v. Jordan, in which the Fifth Circuit upheld application of the same enhancement to a conviction under Section 1521 for filing false liens against a judge and prosecutor after threatening to do so. 851 F.3d at 395–396, 401–402.
Next, Reed contends the district court erred by applying an eight-level enhancement to Count 2 for “causing or threatening to cause physical injury to a person, or property damage, in order to obstruct the administration of justice.” U.S.S.G. § 2J1.2(b)(1)(B). The Sentencing Commission included “property damage” in the enhancement “to address cases in which property damage is caused or threatened as a means of intimidation or retaliation.”
Finally, Reed contends the district court erred by applying a two-level enhancement to Count 2 for conduct “otherwise extensive in scope, planning, or preparation.” U.S.S.G. § 2J1.2(b)(3)(C). Several factors may be relevant to that assessment, “‘including the length and scope of the criminal activity as well as the number of persons involved.‘” United States v. Pegg, 812 Fed. App. 851, 860 (11th Cir. 2020) (quoting United States v. Holland, 22 F.3d 1040, 1046 (11th Cir. 1994)). The district court relied on Reed‘s efforts to convince Nelson not to garnish his wages, his numerous frivolous legal filings in multiple States, and his “campaign of serving notarized documents on Blake” purporting to show she “personally wronged him” and owed him “millions of dollars.” J.A. 557–558. Although Reed cites cases suggesting his conduct was less extensive than some other defendants who received the same enhancement, the district court‘s reasoning does not
Thus, we affirm the district court‘s application of the challenged sentencing enhancements.
IV.
Upon review, we find no reason to disturb the jury‘s verdict in this case or the district court‘s application of the Sentencing Guidelines. Accordingly, the judgment of the district court is
AFFIRMED.