United States v. Root

result, As a on taxes the commissions were McKEE, Before HARDIMAN and withheld and reflected on Root’s W-2 GREENBERG, Judges. Circuit thereafter, however, forms. Soon Root requesting wrote to McCracken that his THE OPINION OF COURT paid commissions be to KGR New Per- HARDIMAN, Judge. Circuit (New spectives Perspectives), a limited lia- bility company that Root established in appeals judgment Root Thomas his time, Ohio. Around the same McCracken—(cid:127) conspiracy conviction for tax evasion and who receiving also was commissions from following to defraud the United States Master Media requested that his sales— jury Although challenges trial. Root paid commissions be to his own limited venue of the District Court and the suffi- (Framco) liability company which Root had ciency of conspiracy the evidence as to the request. formed McCracken’s Between count, principal question prece- 2004, paid 2001 and RBI Perspectives New import dential appeal is whether the $94,077.34 $509,210.43. and Framco Be- may charge Government a defendant for cause requested Root and McCracken had evading the assessment of taxes for multi- that the paid commissions be to their re- ple years in a single count. spective liability companies, limited these payments were not reflected on their re- I. spective W-2 forms. We review light the facts most January In bookkeeper, RBI’s favorable to the Government because the Williamson, Barbara asked McCracken jury found Root guilty charges. of both Root whether she should issue Form Mornan, United States v. Perspectives 1099s to New and Framco to (3d Cir.2005). account for the paid commissions to those entities. Both men responded they A. did not know whether 1099s were neces- A attorney, began former Root working sary payments when were made to limited in the special projects mid-1990s as liability companies, di- they but would rector at Reading Inc. Broadcasting, look into the matter further. When Wil- (RBI), an independent inquired television station liamson a second time some Reading, Pennsylvania. later, Root worked weeks McCracken told her that she closely with RBI’s Presidents —Micheál did not need to issue 1099s to those enti- Parker result, and Frank reviewing ties. As a RBI never notified the McCracken— contracts, preparing payments. shareholder corre- IRS of these work and covered his related ex- they time failed to inform for his At the same $56,000 being paid to penses. of the commissions Root earned from Parker the IRS Ka- Root and his wife Perspectives, New in 2001 and 2002. Parker never issued income on thy Perspectives cited the New 1099s connection with these they when submitted application a loan payments.

refinancing mortgage their home by RBI to New Per- payments made B. into Ka- spectives deposited equally were joint him- preparing into a In tax returns for thy’s personal account and New Kathy Perspectives account on which self and his wife for the tax In signatory.1 applying the lone Root failed to disclose the loan, the Roots listed as income Thomas commissions he received from RBI or the $3,000 salary RBI as well as Ford, Merullo, Root’s income received from Perspectives income from New monthly Furthermore, Perspectives Parker. New Because the Kathy attributable to Root. years. did not file tax returns for those tax couple produce verifi- required bank Consequently, Root taxes in the fol- owed income, Root cation of the listed Thomas 2001, $19,619 $11,571 in lowing amounts: sign a “Commission asked McCracken $6,473 2002, in and 2003. After New RBI New Per- Agreement” between and grand jury Perspectives was served with pay under which RBI would New spectives 2004, subpoena Root filed amended re- percent a two commission on Perspectives 2001, 2003, 2002, turns for which dis- that RBI collected from monthly revenues payments closed the made to New Per- sales ser- exchange Master Media for years. spectives those Root still failed Though Kathy signed vices. Root Ford, Merullo, to disclose the income from Perspectives, on behalf of New agreement Parker, or however. performed solely by were the services grand jury A indicted Root on one count Root. Thomas conspiracy to defraud the United States RBI, payments to the from In addition § count in violation of 18 U.S.C. one income from two Ohio attor- Root received years for 2000 to 2003 in of tax evasion Merullo. neys, George Ford and Victor and seven violation of 26 U.S.C. legal writing performed Root research filing a false return in violation of counts of attorneys for the and instructed services 7206(1). conspiracy The count 26 U.S.C. they propri- him his sole pay that agreed alleged that Root and McCracken etorship, Legal Information Services Asso- by hiding to defraud the United States (LISA). paid ciates Ford and Merullo portions of Root’s income from the IRS. independent Root as an contractor but did not withhold taxes or issue 1099s to Root. Root, Ohio, moved who is resident $58,041.91 From 2001 to Root earned of the tax evasion and false dismissal $19,573.85 from Merullo. from Ford and counts, contending return that the Eastern Pennsylvania improper was an District of for Mi-

Finally, performed Root services bring charges. those The Gov- RBI, venue work at cheál Parker unrelated to his agreed to the false return ernment dismiss including setting up companies in connec- to limit the tax evasion count charges and many tion with Parker’s business ventures. acknowledging 2001 to paid directly Parker Root—either or relating to alleged “success fee” or “bonus” that evasive acts through LISA—a by Kathy Perspectives Root and Thomas Root. 1. New was owned 15% 85% exclusively multiple years 2000 occurred in Ohio. After or whether can be combined concessions, the Government made those question in one count. That was consid- District Court determined venue Shorter, ered in United States v. 809 F.2d proper regard remaining to the (D.C.Cir.1987), where the Government proceeded counts and the case to trial. charged felony the defendant with one jury convicted Root of both tax eva- count of tax evasion that covered twelve conspiracy. Following sion and the ver- years. During peri- the relevant time dict, judgment acquittal Root moved for od, the defendant had conducted all of his or, alternatively, for a new trial. The Dis- cash, personal professional business trict Court denied both motions.2 acquisition avoided the of attachable as- sets, receipts and failed to record and dis- II. bursements. See at id. 57. The defendant argues first his convic argued trying him for all twelve tion for tax evasion should be vacated and duplicitous. one count was Id. at 56. alleged multiple years dismissed because it single of evasion in a count and was there Appeals The Court of for the District of duplicitous. fore “Duplicity improp is the disagreed, holding Columbia Circuit joining er separate of distinct and offenses “tax evasion covering years may several single Haddy, count.” United States v. count aas course of (3d Cir.1998). Whether underlying conduct where the basis of an duplicitous question indictment is ais consistent, the indictment is an allegedly subject law to de novo review. long-term pattern of conduct directed at the evasion of for years.” taxes Id. [those] A. The court held that the defendant’s activi- To determine whether a count is ties a constituted continuous course of con- duplicitous, we must ascertain the allow duct, and each affirmative act of evasion able unit of prosecution to decide whether payment was intended to evade of all taxes properly charges indictment a violation anticipated owed or at the time. Id. The pertinent statute. Id. at 548. To do so, inquire we Congressional by into intent court also observed that section 7201 does examining the language of the statute. Id. directly possible address whether it is charge to a continuing scheme to evade

The tax provides: evasion statute Rather, years. taxes for several the stat- Any person willfully who attempts in merely ute makes it a felony any per- any any manner to evade or defeat tax “willfully son to imposed by attempt[ any payment ] this title or the manner thereof shall ... guilty felony of a to evade or defeat imposed by this and, upon thereof, conviction shall be payment title or the thereof.” Id. at 57 $100,000 ..., fined not than more or 7201). (quoting § 26 U.S.C. This broad imprisoned years, not more than 5 or language, concluded, the court supported both.... finding multi-year that a tax evasion count § 26 U.S.C. 7201. “may fairly charge single be read to but a scheme and duplicitous.” Section 7201 is silent is therefore not regarding whether each tax must be separately Id. jurisdiction pursuant

2. The District pursuant Court had to 28 U.S.C. jurisdiction to 18 U.S.C. 3231 and we have multiple years followed in United ment’s inclusion of of eva- This Court Shorter Pollen, Cir.1992), count, F.2d 78 single sion in a finding States that Root’s charge upheld we the Government’s where actions constituted “continuous course of evasion, which Shorter, four counts of tax each of conduct.” 809 F.2d at 57. These In seven-year period. the same covered diverting actions included: commission count, alleged a dis each the Government payments RBI years from for the 2001 to illegal act: the transfer of tinct affirmative through Perspectives New without hundreds of thousands of dollars succes income; declaring funneling them as his attempts payment to of taxes sive evade legal payments research from Ford and years. at 86. stated over seven We years Merullo for the 2001 to at logical charge that while “it is income; without declaring LISA them as to evade the assessment of taxes tempts avoiding the issuance of 1099s to New counts,” years in separate for distinct id. LISA; Perspectives or failing de- permissible “it is also under section any payments clare as income from Parker charge covering tax evasion sever years for the 2001 or 2002. The court count as a ‘course of al determined that these actions—taken over un conduct’ circumstances ‘where the represent course of three — derlying alleg basis of the indictment is an “consistent, long-term sort of pattern of consistent, pattern edly long-term of con conduct directed at the evasion of taxes” duct directed at the evasion of taxes for found in Shorter and Pollen. ” Shorter, years,’ (quoting these id. at 84 58). 809 F.2d at noted the breadth of We B. statutory language, finding that “[t]he dispute Root does not plain language of this section ... evinces Shorter and distinct, Pollen congressional approve multi-year intent to allow tax evasion Instead, significant, prosecutions. affirmative acts of tax evasion attempts he to dis- separate to constitute section 7201 of tinguish those cases drawing line fenses,” regardless of whether the evasion prosecutions between under 26 U.S.C. single year carried out over a or mul assessment, § 7201 for evasion of tax tiple years. Additionally, Id. at 86. we which involve efforts to shield taxable in- that “nothing legis stated in section 7201’s prevent come to determining the IRS from history requires lative us to conclude that liability, one’s tax pay- and evasion of tax Congress provision’s intended to limit this ment, designed which concern conduct prosecution unit of to an individual tax place out of prevent assets reach to year” legislative history and “the scant of settling liability. IRS from one’s tax See provision simply this does not address States, 343, Sansone v. United 380 U.S. question prosecu of its allowable unit of 354, 1004, (1965); 85 S.Ct. 13 L.Ed.2d 882 Rep. (citing n. 14 tion.” Id. H.R. Nos. McGill, 222, United States v. (1954), reprinted 83-1337 and 83-2543 (3d Cir.1992). Here, the Government al- 5343). 4137, 4572; 5280, 1954 U.S.C.C.A.N. leges assessment, evasion of arguing that Pollen,

Relying largely on Shorter and Root failed to disclose certain income in an upheld liability.3 the District Court the Govern- effort to decrease his tax By taxes,” erroneously argues 3. The Government come the reason Root evaded that charged evading payment aspects Root was both the as- was that he shielded of his payment Though being place. sessment and of his taxes. income from assessed in the first definition, charged every the indictment that Root "evaded Under the Government's eva- $40,000 payment of more than in federal in- sion of would also be an assessment evasion contrast, were evasion Manual for which cites “two distinct and Pollen Shorter § by which one can violate 7201: they involved manners” cases because payment of recovery by assets from efforts to shield income taxes are an annual Because tax liabilities once the defendants’ IRS event, alleged an evasion of assessment argues that unlike calculated. Root were year it specific must relate to a cases, in of evasion payment evasion of upon the income must be shown cases, must the Government assessment the tax was evaded was received which the basis for a treat each tax as year. Consequently, in that in most separate count.4 cases, of each tax evasion assessment a year charged separate stands alone as Pollen, acknowledged In a dictum in we Thus, charge taxpayer offense. that a and evasion of that evasion of assessment attempted to evade and defeat taxes for may differently be treated payment cases years and 1992 would practice noting under that the of separate three counts in an constitute combining years particularly appropri “is indictment. charging tax evasion commit ate case hand, payment, Evasion of on the other payment.” ted the evasion of in- often involves acts which are F.2d at 87. This is because “a defendant payment tended to evade the of several attempting payment to evade of taxes Thus, years government. of tax due the engage designed in transactions cases, it payment evasion of is some- attempt in an conceal assets from IRS permissible charge multiple times payment to evade the of taxes due for owing due and one count. contrast, years.” By number of we charging explained, cases evasion “[i]n Department Tax United States of Justice tax, alleged assessment of fraudu Tax Division Criminal Manual directly action lent defendant often (internal omitted). citations 8.07[2] particular affects assessment for a tax Manual cites both Shorter and Pollen as year. Consequently, logical it in that is examples approved cases where courts type charge attempts of case to to evade multi-year payment prosecu- evasion of the assessment of taxes for distinct tions. Fifth separate counts.” Id. The Circuit Notwithstanding guid- the Manual’s similarly in has remarked: “Because our analogous ance—and the nature of the basis, system come tax on an annual hypothetical posed find it nei- therein' —-we report failure to income must be controlling persuasive. pre- ther nor As a year.” a specific United States v. matter, liminary legal the Manual lacks (5th Cir.1978). Boulet, Manual, authority. The which pub- was argument supported by by Attorney

Root’s also is lished the Assistant General Department Department of Justice’s Criminal Tax for the of Justice’s Tax Divi- Moreover, payment of because the evasion of assessment evasion of assessment. to the ex- logically pay- would lead to a shortfall in tax tent that Pollen addressed the issue of Therefore, reject ment. we the Government's "multiplicitous” “duplicitous” not characterization of the evasion in this case. charges, today our decision clear that makes reasoning charg- of Pollen extends both concurring colleague 4. Our asserts that this ing scenarios. See Concurrence 159 n. import precedential case is not because the of ("As the issue Pollen was whether in- today resolution of the issue we decide was 'multiplicitous,' dictment we did not di- by foretold Pollen. But Pollen concerned an here.”). payment rectly duplicity evasion of and this case concerns an address as we do Pollen, sion, inquiry which accurate- As our here contains disclaimer concerns conduct, in- provides only regardless length “This Manual Root’s of the of ly notes: guidance. place. of Justice It time over which his acts took Fed Department ternal 7(e)(1) to, not, does eral Rule of Criminal Procedure is not intended any rights, single allege allows a count to upon relied to create sub- “that the be procedural, by enforceable at law defendant committed one [the offense] stantive or any specified matter civil or crimi- or more means.” by any party Fed.R.Crim.P. 7(c)(1) added). any hereby (emphasis true, It nal. Nor are limitations of course, that placed litigative pre- on otherwise lawful taxes are assessed on an annu basis; sense, al in that rogatives Department willfully of Justice.” evad assessment, ed his 2001 federal tax his Additionally, the distinctions drawn in assessment, and his 2003 assessment. not follow from the statuto- the Manual do However, found, as the District Court each ry language, penalizes “[a]ny person which year’s evasion resulted from the same con any willfully attempts who manner to multi-year duct: a scheme which he any imposed by evade or defeat this money tunneled liability a limited payment title or the thereof.” 26 U.S.C. company and a sole proprietorship to hide distinguishes 7201. Section 7201 neither money from the IRS. Government evasion of assessment and evasion between alleged evasion of assessment of the same payment, suggests type nor that one sources of for all years: income three tax differently should be treated than evasion payments commission to New Perspec purposes determining the other for legal performed tives and the work Instead, prosecution. unit of the statute Merullo, Ford and payments as well as focuses on a defendant’s acts—his willful received from Parker in 2001 and 2002. attempts any to evade or defeat tax “in Furthermore, Pollen’s dictum does not any concentrating manner” —rather than foreclose an evasion of prose assessment on the or when such conduct relating years; cution to multiple merely it explained in occurred. As we Pollen: that an observes evasion of assessment language straight- “The of section 7201 is “often” affects the assessment of a it prohibits attempts forward: “willful case, year’s however, income. In this any any manner to evade or defeat tax.’ Root’s evasive acts affected the assessment proscribes ‘attempts’ It to evade or defeat multiple income for years. speaks tax and thus act terms evasion, as well as the Accordingly, taxes evaded.” we decline Root’s invitation 86; Spies 978 F.2d at see also to treat evasion of assessment cases differ- States, 492, 499, ently payment 317 U.S. 63 S.Ct. than evasion of cases and (1943) (analyzing predecessor reasoning L.Ed. 418 we hold that the of Pollen ex- statute) (“Congress tax evasion prosecu- did not tends to evasion of assessment limit Though define or the methods which a tions as well. the Government attempt might brought willful to defeat and evade could have separate three counts accomplished perhaps single pattern did not de- for this of events spanning years, require fine lest its effort to do so result in some three section 7201 does not limitation.”). unexpected that it do so.5 reason, 1951, 5. For the same Root’s reliance on that the defendant evaded his taxes in Smith, (7th 1952, v. 335 F.2d States 1953. The defendant claimed a 1964), case, process regard Cir. asks too much. In that the due violation with to the 1951 government brought separate alleging sought counts count and dismissal of his entire case prohibition against duplici- poses of the

C. ty.”). inquiry present Our in the case are in this These concerns absent case simply to consideration of

not limited conduct consis because Root’s evasive permits the text of section 7201 whether during three-year period. tent time charge to Root’s conduct the Government in a engaged Because Root was “continu Rather, count. we next exam conduct,” of the evidence relat ous course traditionally associated ine the concerns year ing to each is identical and it would charging “in one count what could be logically jury be inconsistent for the to find charges” and conclude independent several conduct, guilty light of his 2001 but they implicated are not in this case. guilty upon not based the same conduct Shorter, purposes F.2d at 58 n. 1. The implies 2002 and 2003. Root that the Gov against duplicity include: prohibition years to lumped together ernment (1) avoiding uncertainty of whether a requirement meet section 7201’s of a “sub general guilty finding verdict of conceals a deficiency.” stantial tax See United States finding to one crime and a guilty as (3d McKee, v. 506 F.3d 235-36 Cir. (2) another; avoiding as to guilty 2007). The record demonstrates Root jurors may risk not have been evaded the assessment of more than unanimous as to one of the crimes $50,000 of income each of the (3) charged; assuring the defendant ade question. yet spoken While we have not (4) notice; quate providing the for basis specific on what dollar amount constitutes (5) appropriate sentencing; protecting deficiency, a “substantial” our sister cir against jeopardy subsequent double in a fairly cuits have established a low thresh Id.; prosecution. Margi United States v. v. Davenport, old. See United States Cir.1981). otta, (2d 646 F.2d 732-33 (7th Cir.1987) F.2d 1516-17 policy An assessment of such consider ($3,358.68in taxes sufficient sup evaded any duplicity analysis, ations is critical to conviction); port taxpayer’s United States process for fundamental fairness and due Gross, Cir.1961) 286 F.2d 60-61 may prohibit combining of law what could (unreported income the amount of two independent be several charges into a sin $2,500 “substantial”); payments deemed count, if gle particular even the text of a Nunan, United States v. Shorter, it. statute allows See 809 F.2d at (2d Cir.1956) (“[A] few thousand dollars of (“in determining 58 n. 1 whether fairness given omissions of taxable income requires dismissal of an indictment which prosecution.”). case warrant criminal Ac includes in one count what could be several cordingly, Root’s evasion—even when con independent charges, the Court must single-year sidered in increments —was against pur measure that indictment “substantial.”6 disagreed: independent charge, as a result. The Seventh Circuit can exist of the 1951 agree might "We that the charges three counts be said part larger even if were those of a pertain 'continuing illegal course of pattern activity that also included the 1951 conduct,' in the sense that the intention was challenge. sup- count which was under This continued, long payoffs to avoid taxes so as ports charges separate the notion that but in a criminal tax evasion case each years may brought separately, they not that alone, pay stands and the failure to taxes in brought separately. must be sepa each of the involved constitutes a correctly 6. The concurrence notes that infla- argues rate offense.” Id. at 900-01. Root money requires tion diminishes the real value of over appropriate that Smith that the unit Thus, prosecution year. time. at 168-69. must be one But Smith See Concurrence "$3,358.68 charges that the indicates 1952 and 1953 of taxes held to be substantial

155 Moreover, proven by relating cannot val- evidence to similar point con- period years. over a being concern. Instead of duct sentencing id single-year for three counts of convicted sum, statutory In because the language evasion, convicted on one Root was prohibit does not the Government’s deci- circumstances, “In three-year count. such charge multiple years sion to Root for may actually inure to a defen- duplicity analysis one count and because of the con- by limiting the maximum dant’s benefit traditionally cerns with duplici- associated penalties might he face if he were charges tous that demonstrates Root was separate counts for what and convicted decision, prejudiced by we hold single amounts to a scheme.” United that the charge Government’s was not im- Olmeda, 271, v. 461 281 States F.3d permissibly duplicitous. Accordingly, we Cir.2006) (internal omitted) (as- quotations affirm the will District Court’s denial of sessing practice charging illegal two judgment Root’s motion for of acquittal. count). possessions single ammunition III. duplicity “If the doctrine of is to be argues Root next the Dis formalism, than an exercise in mere more trict Court lacked venue as to the tax only it must be invoked when an indict evasion count and that his case should policy ment affects the considerations” Ohio, brought have been where he re underlie doctrine. United States sides. We review a District Court’s denial (2d Cir.1980). 892, Murray, v. 618 F.2d 897 change of a motion to venue for abuse of The identification of these considerations 641, Inigo, discretion. U.S. v. 925 F.2d suggests single that a count of an indict (3d Cir.1991). 654 The Government bears impermissibly ment should not found proving the burden of a prepon venue duplicitous whenever it contains several derance of the evidence and venue must be allegations that could have been stated as for each proper count of the indictment. offenses, separate but when the fail Perez, United States v. 280 F.3d 328- ure to do so risks unfairness to the defen (3d Cir.2002). 30 States, dant. See Cohen (9th Cir.1967); F.2d see also Proper venue in criminal trials is Sturdivant, United States v. 244 F.3d just procedural requirement; more than (2d Cir.2001) (noting n. 3 that duplici constitutionally it guaranteed is safe charging impermissible only Baxter, tous is if it guard. United States v. 884 F.2d defendant). (3d Cir.1989). prejudices slight 734, That risk is The Constitution alleged wrong a case like this where the “The Trial ... states: of all Crimes shall is a scheme that can to defraud be be held the State where said Crimes 2001, $19,619 $6,473 year Davenport the tax evasion for 1980 in in 2003. $7,218.72 equivalent Therefore, the first accounting even after for effect charged.” for which Root is Id. at 168— inflation, deficiency Root’s tax for the (analyzing Davenport, 1516— 2002 would still far exceed the low 17). inflationary impact, This the concur Davenport. level found to be “substantial” in argues, significance rence undermines the Further, $6,473 deficiency Root’s tax for support several of the older cases we cite to just $745.72 2003 would be less than the 2001 require our conclusion that section 7201's equivalent deficiency of the tax that the Sev- deficiency ment of a "substantial” tax does enth Circuit found to be substantial in Daven- high not set a bar Government. port. case, however, present In the Root’s indi- $11,571 deficiency vidual tax amounted to 156 ” spans multiple districts United States U.S. been committed.... have

shall any in Furthermore, prosecuted “may inquired the of and Const, Ill, 2,§ cl. 3. art. begun, offense was all crimi in which such district provides: “[i]n Amendment Sixth continued, enjoy 18 U.S.C. completed.” accused shall or prosecutions, nal 3237(a). trial, by locality of a crime for public § and The right speedy to the whole the State and district venue extends “over impartial jury purpose an commit an propelled have been the crime shall area which force wherein (emphasis amend. VI v. United States operates.” ted ...U.S. offender Const. added). Johnson, 273, 275, 65 S.Ct. 323 U.S. (1944). noted, As we have 89 L.Ed. 236 require the constitutional In addition to “consistent, for a responsible Root was ments, Federal Rules of Rule 18 which long-term pattern of conduct” “Unless a provides: Procedure Criminal place spanned numerous took otherwise, permit or these rules statute Although multiple states and districts. offense prosecute must an government from another Root’s taxes were mailed committed.” the offense was in a district where “a dispute does not jurisdiction, he held We have Fed .R.Crim.P. to the leading evasion] few of acts [the lay out the power has the Congress of Penn- occurred in the Eastern District prosecution permit of a crime to elements Consequently, prop- was sylvania.” venue in which the or of the districts one 3237(a). 18 er there under U.S.C. Perez, performed. crucial elements are 280 F.3d at 329. charges could argues Root that “[a]ll constitutional and argues his brought by have been the Government he statutory rights were violated because true, of no argument, This while Ohio.” in the Eastern District prosecuted was por- though moment. Even substantial the Northern Dis- Pennsylvania instead of committed in the tion of Root’s acts were Ohio, activity in trict of where most of the may have District of Ohio and he Northern instance, Root place. For this case took there, charged preferred that he had been returns, in- his LISA filed his tax earned nothing required the Government Parker, come, income from received his charge majority Root where a of the acts much of his services performed Root is correct not- place. took While RBI in the state of Ohio. As Root acknowl- recog- has not ing Supreme that the Court however, illegal of his activi- edges, some jurisdiction in criminal pendent nized ties occurred within the Eastern District Cabrales, cases, v. 524 see United States Pennsylvania. headquartered RBI is 1, 6-7, 118 S.Ct. L.Ed.2d U.S. Agreement Reading and the Commission (1998), pen- appeal implicate his does not Perspectives between RBI and New was jurisdiction; allegations of tax dent Additionally, offices there. found RBI’s count brought evasion were Reading in connec- Root often traveled to which, supra, in Part II as determined job. tion with his Furthermore, jury duplicitous. that, you instructed specifically “[f]or with the was Root’s contacts

Given verdict, government guilty return a Pennsylvania, we find to Eastern District act in fur- you must convince that some there. Tax evasion proper that venue was took the crime therance of continuing is a offense under U.S.C. Barker, District of Penn- 3237(a), place here the Eastern United States (8th According- Cir.2009), jury so found. Congress sylvania.” F.3d subject trial in the Eastern ly, Root was against that an offense provided has Pennsylvania District of and the District argument McCracken did so as well. This it Court did not abuse its discretion when overstates the Government’s burden. his motion to dismiss for improper denied Root heavily relies on United States v. venue. Adkinson, (11th Cir.1998), 158 F.3d 1147 in which the Court of Appeals for the IV. Eleventh Circuit reversed the convictions Finally, argues Root that his of four defendants absence “evi- conspiracy conviction—which alleged that agreement by dence of an all for each to Root and agreed impede McCracken to evade his income taxes.” 158 F.3d at 1154. lawful function of the IRS the assess factually Adkinson is distinguishable, how- ment and collection of Root’s income tax case, ever. In that to asserting addition es—should be vacated because the Govern a conspiracy, the alleged Government presented ment insufficient evidence to each of the three defendants had failed to prove conspiracy govern to defraud the file tax returns or filed a false return. “very ment. Root must heavy overcome Therefore, at 1154 n. 15. the court re- jury’s burden” to overturn the verdict for quired “evidence of an agreement by all insufficiency of the evidence. United for each to evade his income taxes.” This (3d Dent, States v. 149 F.3d Cir. stray language interpreted should not be 1998). if, We will sustain his conviction require to that all conspiracies tax-related viewing light the evidence in the most require that each conspirator file a false Government, “any favorable to the rational case, return. In Root’s the Government trier of fact could have found the essential only prove need that he and McCracken beyond elements of the crime a reasonable agreed impede to the lawful functions of doubt.” Voigt, United States v. 89 F.3d in some IRS manner and that one of (3d Cir.1996) (quoting Jackson the two men took some overt act in fur- 307, 319, Virginia, v. 443 U.S. 99 S.Ct. goal. therance of that (1979)). 2781, 61 L.Ed.2d 560 case, In present the Government conspiracy To establish a to de asserts that Root and McCracken con- fraud the United States violation of 18 spired to defraud the United States with U.S.C. the Government prove must taxes; respect to Root’s there is no need (1) beyond a agree reasonable doubt: an for the Government prove to that the men (2) States; ment to defraud the United an conspired regard also with to McCracken’s overt act one conspirators taxes as well. If they conspired also to (3) conspiracy; furtherance of the an defraud respect the IRS with to McCrack- part intent on the conspirators en’s taxes—which is alleged not this agree as well as to defraud the United entirely case—that would be an different McKee, States. F.3d conspiracy and could have been argues that the Government can- separately. not meet its burden regard to the prong first because it prove cannot an argues Root also that the Gov agreement between Root and McCracken prove ernment did not that Root and argues defraud the United States. Root any agreement. McCracken had Though prove that to that he and McCracken con- there is no direct of an agree evidence States, spired case, to defraud the United the ment in this an agreement to defraud prove Government must that Root proven United States “can be circum taxes, himself evaded stantially but also that upon based reasonable infer- bookkeeper, en RBI’s Barbara actions and statements directed drawn from enees Williamson, payments to or from the circum to send Root’s conspirators McKee, Perspectives payments the scheme.” New and his own surrounding stances 238; liability company that Root F.3d at see also United States limited Cir.2002) Smith, juror created for him. A reasonable had juror that a could cer the (finding reasonable infer that the men had discussed could tainly agreement that a tacit ex diverting payments conclude to a limited benefits of they amongst group people a when ists de- liability company and McCracken acts”); many unusual engage “so example. Further- cided to follow Root’s (3d Barr, F.2d 650 Cir. States v. 963 more, a testified that she had Williamson 1992) (“It that a written or is well settled and Root discussion with both McCracken among alleged co-con spoken agreement regarding 1099s should be issued whether rather, unnecessary; indirect spirators is liability compa- respective to their limited understanding mere tacit evidence of [a] regard payments. nies with to those suffice.”). will the Government re When matter, they men said would look into the lies on circumstantial evidence to establish later told Williamson that but McCracken conspiracy, a tax “the circumstances must Though not fill out such forms. she need jury’s finding as to warrant a be such Williamson could not recall whether Root alleged conspirators the had some common conversation, in the second a participated unity impede the design purpose with juror reasonable could infer that Root and McKee, 506 F.3d at 240. The evi IRS.” agreed to misinform William- McCracken dence must be sufficient to show that attempt in an to conceal Root’s income. son impeding conspira the IRS was one of the Finally, at request, Root’s McCracken objects, cy’s merely and not a foreseeable signed Agreement” divert- “Commission consequence or collateral effect. United ing Perspec- Root’s commissions to New Gricco, 277 States v. F.3d Kathy signed tives. Root’s wife Cir.2002). Perspectives, on agreement behalf New presented ample though performed

The Government cir- even Thomas Root all of support jury’s meriting payments. cumstantial evidence to those services finding that Root and had an Agreement McCracken The Commission was later agreement regard defraud IRS with found at RBI a folder marked “Fram- to Root’s taxes. Root not an co,” was unedu- allowing juror a reasonable to connect caught up complexities cated citizen in the liability company with McCracken’s limited code; experienced of the tax he was an liability company. Root’s limited Accord- lawyer businessman and former who had ingly, we hold that the evidence was suffi- knowledge familiarity of tax issues and support conspiracy cient to Root’s convic- creating liability companies limited tion. proprietorships. Viewing the evidence V. verdict, light in the most favorable to the reasons, juror foregoing reasonable could conclude that For the we find no requests by Root’s to have his commissions error the District Court and will affirm payments judgment and other to New Per- of conviction. directed Root’s spectives and LISA were intended to avoid McKEE, Concurring in Judge, Circuit paying income taxes on that income. In- Judgment. deed, shortly requested after Root writ- principal “the ing assign My colleagues commission believe McCracken his payments Perspectives, question precedential import appeal New McCrack- this is whether the Government duct directed at the evasion of case] taxes for [in ” evading for may charge defendant Shorter, years.’ (quoting those Id. at 84 multiple of taxes for assessment 58). at F.2d However, Maj. single Op. count.” Therefore, question posed by my question answer to that is foretold colleagues my is not as novel colleagues as Pollen, our decision in United States v. Pollen, (3d Cir.1992). There, suggest.8 In we relied on Shorter adopted F.2d 78 we analysis Appeals Court in determining whether a charge for the District of Columbia United States multiple permissible under the Shorter, (D.C.Cir.), 809 F.2d 54 cert. statutory provision, relevant 26 U.S.C. denied, 484 U.S. S.Ct. provision’s based on the legislative (1987). L.Ed.2d 35 As I will discuss be history and the nature pro- of the conduct low, Pollen, in the Government combined by scribed the statute. The same statuto- violating methods of 26 U.S.C. different ry provision Accordingly, is issue here. evasion, § into four counts of tax but we need not focus on whether the Govern- seven-year each was for the same time ment can combine several violations of 26 him in argued charging frame. Pollen single U.S.C. 7201 into a count aas subjected him to multiple pun this manner matter of law. already We have deter- ishments for the same offense and was mined that it can. We should instead be “impermissibly multiplicitous.” therefore focusing on whether the Government Pollen, rejecting 978 F.2d at 83.7 In transgressing do so here without the de- argument, we relied Shorter and held: fendant’s to right process due of law. ... permissible is under section 7201 “[i]t precisely, More we question should wheth- charge covering tax evasion several er the pro- Government denied Root due years single count aas ‘course of cess of joining law 3 tax into a in conduct’ circumstances ‘where the un single count of tax evasion under these derlying of the indictment an alleg basis is consistent, edly long-term pattern of con- circumstances. For reasons I shall ex- fense, placed 7. As the issue in Pollen was whether the in- ... and that he was thus in "multiplicitous,” dictment was we did not jeopardy double because the overt acts al- directly duplicity address as we do here. identical.”). See leged in the two counts were al., Wright 1A Charles Alan et Federal Prac- will As be seen from the discussion that 1999) tice and Procedure ed. follows, although multiplicity Pollen involved ("[M]ultiplicity” the refers to Government im- duplicity, quite and not the doctrines are sim- properly charging the same in offense multi- they ilar and both limit the manner in which counts; ple "duplicity” refers to an indict- (or multiple crimes a course of conduct con- charges ment where the Government two or crime) stituting single charged. a can be I in more distinct offenses one count. In the agree therefore that Pollen is relevant situation, latter it cannot be determined if the duplicity. claim Root's jury’s verdict was unanimous as to each dis- offense.) Nolan, tinct See also United States v. distinguishable 8. Pollen is somewhat because (3d Cir.1983) (“Appel- 594 n. charged the indictment there evasion of taxes charge argues ... that the in V ... lant Count rather than the evasion of assessment that the 'duplicitous' conspiracy of the Count I is Nevertheless, Government here. the charge encompassing the same ‘Du- events. reasoning apply of Pollen should with full plicity joining is the in count of two My colleagues signifi- force here. dismiss the separate or more distinct and offenses.' defined, making appel- cance of that distinction in de- duplicity, But so is not what their complaining We termination that this indictment does not vio- lant is about. assume disregarding appellant process I V are late due while means that Counts extent i.e., multiplicitous, they charge analysis applies the same of- to which the in Pollen here. ..., $100,000 or not more than fined improper- I the indictment plain, believe or potential years, not more than 5 imprisoned and created the ly duplicitous even on Count Two jury to convict both.... that he was jurors agreed all though not indicted, an om- After he was Root filed evading taxes each guilty for argued he pretrial motion which nibus However, as in that count. years charged (in District that venue the Eastern part) demon- explain, “the record my colleagues all Pennsylvania improper was because the assessment strates Root evaded alleged tax underlying of the actions $50,000 in each of the than of income more In re- evasion 2000 occurred Ohio. at 154. Ac- Maj. Op. question.” during subsequent telephone sponse, indict- clearly duplicitous cordingly, this court, with the the Government conference integrity of impair ment “did drop charges related to of- agreed case in such put a whole or trial as in 2000.10 fense conduct that occurred to undermine confi- light so as different duplic- II argued verdict.” United States Root also that Count was dence (3d Cir.2002). Milan, I F.3d itous. judgment. concur in the Never- therefore “Duplicity improper joining is the of dis

theless, I this indictment believe in a separate single tinct and offenses I am in dubitante about duplicitous, and an States indictment].” count United [of finding for Count propriety venue (3d Cir.1998). 542, Haddy, v. 134 F.3d 548 Pennsylva- in the Eastern District of Two explained Haddy, “[d]uplicitous As we nia the circumstances here.9 under specific charges, conceal the counts Background. jury deciding guilt or I. prevent from respect particular with to a of innocence charged Root originally The indictment fense, endanger sentencing.” ... fair or tax evasion single with a count of income 1). Shorter, n. (citing 809 F.2d 58 § 7201 as to his in violation of 26 U.S.C. im “An indictment should be dismissed as 2002, 2000, 2001, tax returns. 26 and 2003 ... if trial on a permissibly duplicitous § provides: 7201 U.S.C. single count would be unfair to the defen willfully attempts who Any person Shorter, v. 608 dant.” United States tax any manner to evade or defeat (D.D.C.1985) 871, (collecting F.Supp. 879 imposed by payment this title or the cases), (D.C.Cir.), aff'd, 809 F.2d 54 cert. felony ... guilty thereof shall of a denied, 71, thereof, 817, and, 108 S.Ct. upon conviction shall be 484 U.S. signi- prejudice, ... to Defendant’s motion without not- [used] "The term 'dubitante' 'is 9. judge] fy op- doubted the decision ren- ing [a have the that the Defendant would ” (5th Dictionary 448 dered.’ Black’s Law any objection portunity to venue to reassert ed.1979); Army Dep't Cmty see v. Salvation at trial. N.J., State 919 F.2d trial, leading up Affairs of weeks to Defendant In the Cir.1990). Two, asking again the Court attacked Count duplicitous, and to dismiss Count Two as proceedings explains The district court reasserting objection. Following a his venue leading agreeing to the Government’s to fore- conference, agreed telephone the Government go any violation for 2000 as follows: year drop allegations pertaining to the to argued allega- that ... all of the Defendant Indictment. 2000 from Count Two of the deficiency acts and tax tions of evasive Root, F.Supp.2d v. States by tax return covered the 2000 (internal (E.D.Pa.2008) quotation marks and exclusively in Ohio.... Ultimate- occurred omitted). following hearing, ly, this Court denied citations (1987). Support II. Improperly aggregat- Shorter Pollen Do Not L.Ed.2d 35 Combining Tax Years in of law into a One Count ing multiple violations Appropriate (absent Without Precautions. that were not precautions count here) improper because “there taken is The defendant in Shorter was [may way knowing general no with be] separate with twelve offenses of tax eva- joined separate verdict on offenses sion, in violation of 26 U.S.C. jury was unani- single count whether failing pay to income taxes for the respect [any of the of- mous as well as several mis- Starks, United States 515 F.2d fenses].” demeanor counts not relevant to our dis- (3d Cir.1975). 112, 117 Shorter, cussion. See 809 F.2d at 56. He challenged the indictment arguing that it majority explains, As the establish improperly included offenses that were be- liability Root’s criminal under 7201 for yond the statute of limitations and that during conduct that occurred the 3 remain- combining several tax “imper- ing years parties on which the went to missibly duplicitous.” Id. In rejecting the trial, required the Government was argument, the Court of Appeals for the present showing evidence a “substantial District of agreed Columbia with other deficiency.” Maj. Op. (citing at 154 appeals courts of and held that it is per- McKee, United States v. to charge conspiracy missible to evade sev- (3d Cir.2007)). It is axiomatic 235-36 years’ eral taxes as one count “where right by jury “require[s] to trial crimi- underlying basis of the indictment an upon jury nal convictions to rest determi- consistent, allegedly long-term pattern of guilty every nation that the defendant is conduct directed at the evasion of taxes for of the with element crime which he is (citations omitted). years.” these Id. The charged, beyond a reasonable doubt.” appeals court of also any analy- noted that Gaudin, United States v. 515 U.S. “(1) to, duplicity sis of claim of look must 115 S.Ct. 132 L.Ed.2d 444 language legislative the history of the (1995). Accordingly, jury the had to de- (2) statute and the nature of pro- the cide the amount of deficiency whether the Shorter, (citing scribed conduct.” Id. that charged actually the Government was 877). at F.Supp. majority That is what the “substantial” in each which he was here, does and I do disagree not with that charged violating part my colleagues’ analysis. rely My colleagues heavily on Pollen However, another factor was crucial to support Shorter to their conclusion rejection the district court’s of Shorter’s grouped that Count Two—which tax eva- duplicity claim appellate and the court’s charges sion 2002 and 2003—is affirmation of that ruling. As the district duplicitous; not the Government’s brief explained: court duplicity “[Shorter’s] ar- frequent also makes reference to those gument stands or falls not on the narrow However, a closer cases. examination of basis of tax evasion law but on how it both of those cases reveals neither up against general measures more princi- supports the Government’s decision to in- Shorter, ples.” F.Supp. at 876-77. dict Root for evasion of taxes over 3 Thus, the district court made clear “if count, in 1 as the Government did here. In trial on a count would be unfair to fact, support defendant,” Root’s claim that both Count duplicitous the indictment impermissibly duplicitous. Two was though should be dismissed even the following explanation the of how it may permit it. offered charging statute otherwise danger: address that would Id. at 879. whether the indictment that,

To determine The has concluded while Court remedy prej- unfair required dismissal to may go forward on the prosecution defendant, the district court indictment, udice to the the de- present of the basis in- [the] it “must measure realized protected fendant is entitled to be pro- against purposes that, dictment on such an in- against danger my As against duplicity.” Id. dictment, hibition he will be convicted not on the outlined, colleagues purposes have these of one unanimous verdict on a basis 1) prevention generally: include juror single set of facts but under votes 2) the assurance of ade- jeopardy, which, double depending for conviction on the 3) defendant, quate pro- notice to the jury, particular member of the relate appropriate sentenc- vision of basis for entirely years. different 4) danger that a was ing, conviction may Both interests be accommodated may produced by a verdict that not have appropriate jury special instructions and any been unanimous as to one of the end, jury. interrogatories to the To this 5) the un- charged, avoiding crimes jury the Court intends to instruct certainty general of whether a verdict of some detail on these issues and to request guilty to one crime conceals a verdict as interrogatories. it to answer special Maj. crime. guilty of not as to another (footnote omitted) added). (emphasis Here, Op. at 153. that means that we danger must assess “the that a conviction The district court’s concern was not produced by a verdict by the court of appeals. overlooked have been as to one of unanimous appeals upheld court of the district court’s Shorter, charged.” crimes payment conclusion that the evasion of below, F.Supp. explain 876-77. As I I taxes could be one count as a majority’s incorrectly analysis believe the conduct,” “continuous course of but made danger lacking dismisses the of a verdict inquiry clear that the did not there. end unanimity that could arise from the inclu- rejection In affirming the district court’s multiple years sion of of evasion of as- claim, duplicity ap- Shorter’s the court of sessment in one count. peals explained: “The District cor- Court In analysis rectly its of whether the that in determining indictment noted also fair, the court in requires district Shorter real- whether fairness dismissal of an jurors may ized the that risk some vote for indictment which includes in one count place conviction on independent based actions took what could be several in year, jurors might one while other charges, re- the Court must measure that in- turn a guilty against purposes verdict based on conduct in dictment of prohi- Shorter, entirely year.11 an against duplicity.... different See bition The District F.Supp. 608 at court that all purposes 881. district Court held four were met acknowledge years beyond 11. I the statute of limita- risked conviction for the reach potential prejudice tions issue exacerbated the of the statute of limitations. The verdict was respect duplicity in Shorter with claim. to creating potential returned in thus The statute of limitations for tax evasion is six of a conviction based on Shorter’s failure to years. Shorter was U.S.C. 6531. pay year beyond taxes in a that fell charged single felony with a count of willful Shorter, 608 statute of limitations. See attempt payment to evade of income taxes F.Supp. at 881. through arguably due from 1972 and agree.” guilty plea colloquy, 809 F.2d at 58 n. 4 repeatedly here. We Pollen (italics 879) Shorter, F.Supp. at (citing stated that he knew he owed substantial added). conduct, at taxes the time of his but was specific unaware of the tax he was Pollen, pled guilty to In defendant attempting to evade. See id. of to evade attempting four counts and Against backdrop, we concluded: tax- payment personal defeat of his income [O]n the facts of this case it is clear that charged es. Each of those counts a differ- attempted Pollen all of evade group ent method of evasion for the same group taxes he owed for the of 1967, 1970, years: of seven question through the significant several 1975, and 1982. Pollen had “made several affirmative acts of charged evasion international transfers of of hundreds the counts to which he pleaded guilty. of dollars equally thousands and secreted circumstances, Under these where the States, in the valuable assets acts of charged evasion each count attempts to evade payment of his taxes involve funds far greater than the taxes years.” for a total of tax seven Id. at and, for particular year, owed as acts of payment 86. The evasion of indicated, Pollen himself each act was the different counts included: intended to evade payment of all taxes 1) “placing part of his assets out of reach owed, merely those owed for par by causing approxi- of the Government year, ticular we conclude that section $690,000 mately gold brought to be permits a unit of prosecution based Toronto, Corporation, Bank Swiss separate significant acts of evasion. Canada, with instructions to further trans- Each attempt to evade taxes that gold fer the to a nominee account” in willful involves an amount that can 2) Switzerland, an funds of “transporting additional not logically be broken down and classi $285,000” to the same bank with similar relating as to a particular tax 3) instructions, using “currency, money or- fied is an allowable unit prosecution un ders, buy and cashiers checks to assets plain language der the this section 4) pay expenditures” “maintaining can separately charged and so as $350,000 coins, gold more than bars and evasion the taxes group owed jewelry, gems in safety deposit boxes for years. at the First Union National Bank of North Pollen, added). Carolina” under false name. (emphasis (internal omitted). F.2d at 82 citation circumstances,” “Under we had [those] finding no trouble that it was appropriate fact, In years, Pollen had conducted charge multiple years count his affairs in such a manner as to avoid by Congress. as authorized The facts taxes, payment regardless year, of all 1) the acts of evasion involved funds that disguise and to both hide and assets that greater were than the taxes Pollen owed could be to satisfy seized his tax obli- 2) year, for a particular and that there was “He gations. did not know for which evidence that each act was intended to portion he owed which of the taxes payment of evade all taxes owed and not attempting he was to evade.” Id. The specific year, directed to a dispositive were uncontested evidence established that Pol- to our conclusion. therefore ex- We correspond any len’s actions did not to plained: i.e., frame, time no act evasion was of year any

directed toward tax nor prosecution recognize the unit of we in particular obligation. During tax his opinion particularly appropriate this is appar- in and should be commit- trict court Shorter charging

in a case tax evasion here. In ent of through payment. ted the evasion evasion of the assess- charging cases majority readily too dismisses our The tax, fraudulent ac- alleged

ment of in of this distinction Pollen as discussion directly affects tion of a defendant often “dictum,” despite importance its to our year. tax particular assessment for a (“In analysis Maj. Op. at 152 there. See logical type in that of Consequently, it is Pollen, acknowledged in that dictum we to evade the charge attempts case to pay- of evasion of assessment and evasion years in of taxes for distinct assessment differently un- cases be treated ment payment counts. Evasion of separate practice of noting der cases, however, sharp contrast stand combining years particularly appropri- ‘is A to evasion of assessment cases. de- charging ate in a case tax evasion commit- ”) attempting payment payment.’ fendant to evade ted evasion 87). Pollen, case, may, engage (citing 978 F.2d at taxes as this assets designed transactions to conceal Although the crimes of evasion of as attempt from the IRS in an to evade the “frequently sessment and evasion of taxes payment of taxes due for a number Mal, overlap,” see United States years. pay- As a result evasion of (9th Cir.1991), § 7201 never F.2d logical charge ment cases it is dis- separate theless defines them as and dis tinct, significant attempts to evade the tinct offenses.12 See Sansone v. United payment group of tax for the same of States, 343, 354, 380 U.S. 85 S.Ct. years in separate tax counts. (1965); compare L.Ed.2d 882 McGill, States v. 964 F.2d Id. at 87. Cir.1992) (listing elements of “evasion of important States, It is to note that Pollen both payment”) with Cohen v. United (9th Cir.1962) involved evasion of payment Shorter (listing assessment).13 rather than the evasion of assessment that evading various means of illustrates, is here. This distinction does not As Pollen evasion of taxes fre change applicable legal analysis quently difficulty aligning results in of Shorter, adopted particular was set forth fense conduct with a tax or However, deficiency tax in Pollen. where an indictment because the defendant taxes, assessment, charges payment tends to actual evasion the risk of evade just process greatly a denial of due is increased assessments that would define tax obligations accruing particular pe- for reasons that apparent were the dis- Therefore, My colleagues reject correctly easy payment. note it in tax we the Gov- 12. to conflate evasion of assessment and evasion ernment’s characterization of the evasion in case.”) (italics only original). of taxes this because the reason to evade tax is the assessments concomitant evasion of the applicable Op. Maj. taxes. See n. 3. Although, 151-52 the Court made clear in Sansone crimes, There is no reason to evade an assessment if 7201 includes two different corresponding position charges taxes are not also evaded. some courts take the that it majority recognizes simply specifies the distinction and two one crime correctly rejects violating attempt the Government's methods of the statute. See United 555, Waldeck, (1st payment. recast this case as an States v. 909 F.2d 557 evasion definition, Cir.1990) ("Under ("Sometimes say convenient See id. the Government's it is ” ‘crimes,’ every evasion of would also be an that different methods are different assessment noting payment are not so bold as to either "[w]e evasion of because the evasion of but aside....”). logically ignore assessment would lead to a shortfall or shunt Sansone

165 against duplicity[,]” riod. Conduct intended to evade a tax tion carefully we must corresponds year to the tax assessment consider the risk of an unjust unfair and Shorter, can the affected assessment and therefore F.Supp. outcome. at 608 879. readily charged according appli- to the III. The Law of Other Jurisdictions Moreover, year.

cable tax it should be Policy and DOJ are Consistent charged according applicable to the with Pollen. year. “logical” charging method of

Thus, holding expressly our Pollen Pollen, i.e., explained we charging dis approved charging multiple years of eva years separate tinct charges, has been § sive conduct in violation of 7201 in a followed our sister appeals. courts of single count “under ... circumstances” See, e.g., Anthony, United States v. 545 where the evasive conduct could not be (1st 60, Cir.2008) Pollen, F.3d n. 1 62 particular year.” (noting connected to “a 86; see, McGill, the four-count indictment e.g., charging 978 F.2d 964 F.2d defen (holding “willfully at 233 that a shift of ac dant of attempting] bank to evade and levy count use after an IRS on other ac defeat the assessment of the income tax years a half counts over two and constitut owing” due and corresponded with the payment); ed evasion of United v. 1999, 2000, States years 2001, 2002); and United (7th 551, Conley, 826 F.2d 554-56 Cir. Thompson, 832, States v. 518 F.3d 838 1987) (involving aggregation (10th Cir.2008) of numerous (“[Defendants] were indict place acts of concealment that took over evasion, ed on six of tax counts years, including repeatedly four placing 7201, violation of 26 U.S.C. for the tax family assets the names of members 1997.”); years 1992 United States dealing currency only); and United Nolen, (5th 362, Cir.2006) v. 472 F.3d 369 Mollet, (2d 273, States v. 290 F.2d 274-75 (involving a three-count indictment Cir.1961) (concluding that refusal over evasion of income that corresponds taxes four-year period to inform IRS officers 1997, 1998, with the and 1999 where about the of brokerage existence accounts payment case involved both evasion of in paying could assist taxes due con assessment); Carlson, United States v. payment). stituted evasion of That is not (9th Cir.2000) 466, F.3d (charging de here, situation I am troubled that fendant with three counts of evasion of my colleagues willing seem so to overlook 1991, assessment for the language important Pollen that was so 1993); Mal, 942 F.2d at 684 (indicting analysis merely to the there because it can defendant for five counts of tax evasion arguably be labeled “dictum.”14 under 26 U.S.C. “one for each year”); calendar United States v. Daven appropriate jury Absent instructions (7th Cir.1987) port, 824 F.2d special interrogatories that address and/or (“[T]he district the risk of court denied the defen conviction on less than a unani- assessed, judgment mous dant’s motion year acquittal] [for verdict as to each we (such One, as to Count which should tolerate indictments as was the tax eva here), 1980.”); charge the one offered which sion for the lump viola- Gross, multiple tions of v. assessments into States Cir. 1961) (“Gross Moreover, count. “measuring] when was convicted against purposes III, indictment prohibi- II and relating Counts to understate- Fonseca, Virgin part See Gov't holding Islands cussion that is not (3d Cir.2001) dicta). (noting F.3d that dis binding internal manuals are not of tax in the Justice’s net income and ment of other) 1955”). (or court, I think any of on this do not The Court returns for 1954 and readily the clear explicitly- ignore Fifth has that we should so Appeals for the Circuit ” “must that evasion logic guidance alleged that evasion of assessment of their stated year spe- in that manner. “must relate to a charged for each of assessment cases Boulet, Div., year.” Tax U.S. (quoting States v. cific See United Cir.1978) added). (5th Justice, (emphasis Dep’t Tax Manual of Criminal (2008)) Evasion of assessment 8.07[2] the defen- proof The of Government’s allow the Government to iden- cases often a “net guilt in Boulet was similar to dant’s a deficiency given the tax for tify had prosecution." worth” Government Indeed, penny. to the is the down present proof of income at the start Pollen, here. Unlike this case does case then establish that charged period pay- not involve indiscriminate evasion of income was from a taxable any subsequent ment of and all taxes. There was earned, source, during and also legitimate no reason to conflate the simply charged period. The there- Government of assessment into the of evasion all bank fore had to examine of Boulet’s same count here. the amount of taxable deposits, establish income, cash proof expenditures show is, however, danger There substantial income, any, if re- from taxable and then in joining in these 3 prejudice by applicable deductions. duce amount any safeguards count without such as same The evidence in such a case is far more jury interrogatories specific instruc- far more diffi- circumstantial and evasion Thus, tions that were stressed Shorter. prove cult for the Government to than here, despite holding hope our I that the case like this one. See id. at 1168. Never- prosecutorial will exercise its Government theless, though proof even method prudently deciding discretion more when analogous prosecu- there was more to the how to structure future indictments for tions Pollen and Shorter than to the evasion of assessment under 26 U.S.C. here, prosecution Appeals the Court of for Indeed, I have no 7201. doubt Fifth Circuit made clear that “[i]t warrant post- failure to do so well part government’s proof burden of in- appropriate jury verdict relief absent beyond to establish a reasonable doubt jury interrogatories structions as and/or expenditures that the deposits come Although poten- explained Shorter. very year from taxable income for the tial of verdict is not unanimous is question. system Because our income tax not realized in this case because the evi- basis, report is on an annual failure against dence Root as to evasion in each specific income must be year crammed into Count Two is over- (italics Boulet, year.” 577 F.2d at 1167 below, whelming, as discussed the facts of added). My colleagues mention this “re- danger this case reveal inherent passing, in Boulet in and then mark[]” duplicitous indictments. analysis dismiss the decision without or Maj. I do not Op. discussion. See is Instructive in IV. This Case easily think that can be proclamation so Showing Dangers given brushed aside our discussion Pol- Charges Duplicitous len. (g) of Count Two of Similarly, although agree my Paragraph I col- leagues’ Department alleges: statement that the of Root’s indictment

167 15, 2002, or defendant Government Exhibit April On about JS-13 lists the income tax ROOT filed a false federal “Schedule of Total Income For New Per by failing 2001 for the return spectives and specifies LISA”15 and Root’s RBI, from report substantial income during sources income firms, LISA, lawyers various and law charged in Count Two as follows: Parker], and [Mike 2001 2002 SOURCE TOTAL 5,394.22 $34,794.72 $37,088.74 77,277.68 Reading Broadcasting $ $ 20,000.00 36,000.00 56,000.00 2 Mike Parker Merullo, & Reister 11,539.60 4,044.00 3,990.25 19,573.85 Swinford Co.LPA 15,200.00 21,410.00 21,431.91 58,041.91 George Ford $52,133.82 2001TOTAL $96,248.72

2002TOTAL $62,510.90 2003TOTAL $210,893.44 TOTAL ALL YEARS during Root was the Root charged receiving resident Ohio was with over period $30,000 relevant time and filed his tax re- from in RBI each of 2002 and turns from Ohio. All the entities he was the Government Root with, Reading $5,394.22 except receiving involved in Broadcast- from RBI 2001. (“RBI”), ing Inc are situated Ohio. RBI notes, As the juries Government are only entity is the named in the indictment to follow presumed they the instructions that located the Eastern District of given. Appellee are Br. at 37 (citing Op Pennsylvania. other income The as listed States, per 348 U.S. S.Ct. the indictment and the Government’s 158, (1954)). Here, jury 99 L.Ed. 101 pertains Exhibit to evasion of assessment convict, was instructed that order to it on income As my earned Ohio. col- must find that act in some furtherance of note, Root leagues argued also that venue the crime in the place took Eastern Dis Pennsylvania the Eastern District of Pennsylvania. Accordingly, trict of we court, district proper. minimum, presume, must at a request, jury Government’s instructed the jury found Root evaded assessment that it must find that “some act in further- of taxes some the income from RBI. charged, place ance the crime took here Thus, if the Government had failed to Pennsylvania.” in the Eastern District of proffer prove evidence sufficient to be at 69-70. Supp.App. yond a reasonable doubt Root evaded Exhibit, It is apparent from the above of taxes on assessment income from the RBI income from varies consider- other of which were in sources—all ably from 2001 to 2002 or Ohio—the verdict could have been based While (Legal attorneys, regular payments 15. LISA Information Services Associ- based direct their ates) proprietorship is a sole created Supp.App. to him. at 57-59. Ford, had to which he Merullo and two Ohio- crime, determining an element of the solely the income from RBI.16 This is on particular deficiency have raised a is “sub- very plausible scenario would whether duplici question in cannot dangers jury the endemic stantial” is that precisely in that were discussed tous indictments as matter of law without trans- assumed of Root could stand convicted the process Shorter. the limitations of due gressing Gaudin, 510, on his 2001 return evasion of assessment See 515 U.S. at 115 clause. rough of taxes on evading for assessment S.Ct. 2310. $5,400 Although it is cer ly of income. My colleagues to attempt support the may tainly possible jury that a conclude by sug- assertion speculative Government’s of deficiency the tax on that amount that is a low threshold of gesting there “substantial,” also possible income it is is establishing that the amount of a proof for rea juror at have a least one would deficiency They tax refer to is substantial. This question. the is sonable doubt about juries have found and our amounts true one considers that especially when have appeals sister courts of affirmed as corresponding for 2002 and 2003 is income sufficiently to con- “substantial” sustain greater six times than the approximately Maj. Op. at under 7201. See viction charged income from RBI for 2001. The 2 argument unavailing. 153-54. The is In intended to duplicity doctrine of is cases, of the convicted the 3 defendant was ... jurors may the risk that not “avoid[ ] years acquitted for and for other certain as one of the have been unanimous to ” years of with which he was evasion charged.... crimes United States option that Root would have —an

Margiotta, 646 F.2d 733 Cir. the in duplicity been denied because 1981); Maj. at 154 Op. (citing see also Count Two. F.2d at Davenport, See Margiotta, listing and un dangers other motion for (granting defendant’s derlying duplicity). the doctrine of II judgment acquittal for Counts very The mentions Government this III, charges “which were evasion arguing preju- in was point that Root years being 1981 and con- 1982” even if the was du- diced here indictment Gross, counts); all other see also victed on The plicitous. Government states: (noting 286 F.2d at that the defendant [Tjhere dispute can be no that the tax I, VI,” TV, acquitted “was on Counts andV by Root’s failure deficiencies caused to representing 4 of the 6 for which report the income he received from the charged). defendant was payments commission were ‘substantial’ respect the years to each of Moreover, comparing the inflation-ad- SuppApp. (noting issue. See justed amounts found to be substantial in $5,394.22 unreported received a jury those cases reinforces that well $34,794.72 income from RBI to have found the amount attributed RBI 2003). $37,088.74in deficiency 2001 insufficient had on charged separately. Br. n. from Appellee’s at 30 15. The Govern- income RBI been $3,358.68 example, con- For of taxes argument problematic. ment’s is held that, law, year as the tax be evasion for the tax clusion a matter of substantial $5,394.22 Davenport, equivalent for the 1980 in is owed “substantial” $7,218.72 for which is untenable. it first purposes Since here, majority explains, was that there was no reasonable 16. As the the evi- such acquitted juror support of in- likelihood that a would have dence in total amount come on which Root evaded assessment in charged.17 Maj. Op. See at 154 required Root was AUSA: We’re to under 1516-17). venue statute and under the tax evasion (citing Davenport, 824 F.2d at statute. $2,500 Similarly, unreported income Why you required Court: are Gross, cited as the ma- “substantial” just couldn’t you as well indict him in

jority, for tax 1954 and 1955. Ohio for failure to pay income tax on 60-61). Gross, (citing F.2d at In- Id. money he earned In- Legal under this $2,500 in is the of equivalent come of formation Services Associates? $16,520.52in 2001.18 No, Honor, AUSA: Your because here’s both These concerns are confirmed and why. said, We have—as eva- I the tax by statements the Assistant exacerbated requires sion statute that prove we a Attorney United States made the before tax deficiency. substantial ifSo we had During hearing district court. the on indicted the case in Ohio we’d still have Motion, Root’s Omnibus Pretrial the dis- proving the issue of the income that he expressed trict court understandable con- Pennsylvania earned in the proving charging the mul- propriety cerns about evasive acts that he took. single

tiple offenses count. The court App. exchange 533-34. The then con- into inquired why various acts evasion tinues with the AUSA arguing that Root is pertaining to interest in Root’s LISA over venue, contesting not and that “the since years a multiple were combined into charges indictment evasive acts occurred exchange count. The following ensued: district[,] in this the that’s end of the inquiry for purposes.” venue Id. wondering I’m Court: what it is with Although I do not unfairly want to im- that LISA occurred the Eastern Dis- pute meaning intended, a that not it is Pennsylvania. trict of exceedingly exchange difficult to that read Honor, any- Your it didn’t have AUSA: anything and conclude than other that the to thing do with the Eastern District of Government combined acts over the Pennsylvania the same count to total aggregate Root’s Well, I yet know but Court: that deficiency thereby tax prov- facilitate you’re charging part ing that as of Count II. Generally it was substantial.19 However, using power. 17. I have calculated these amounts the the dates of not trials are always "CPI Inflation on opin- Calculator" the website of from clear the facts recited in Statistics, part year Bureau Labor which is deficiency ions. The of the an tax is Department http:// U.S. of Labor. See appropriate accurate and basis for the calcu- www.bls.gov/data/inflation_calculator.htm. lation. The calculator is described the BLS as obvious, "The follows: CPI inflation calculator Though uses the distinction 18. average given Price important Consumer Index for a it is to note that the amounts as year. represents data changes presented calendar This comparable. are While Daven- prices goods purchased tax, port of all unpaid citing services addresses Gross is to consumption by urban paid. households. This taxable tax income which was not every year index value requires has been calculated Tax evasion a "substantial tax defi- year, ciency," since 1913. For the current proportion latest which is a calculated as monthly http://www.bls. index value used.” is of taxable income. gov/cpi/cpicalc.htm. equivalent To ensure residence, comparisons, comparing I am the amounts in Given the defendant’s Ohio year deficiency. might companies the tax fact companies, One that his Ohio were argue year that the in which the trial took and the fact he in- derived substantial place companies more is relevant because it better re- come those Ohio from Ohio, jurors’ impressions buying legal mystery why flects current did it work he that, jury in- appropriate absent certainly nothing wrong teaches there is speaking, interrogatories special an indictment in strategically drafting structions and/or the likelihood of of conviction on less manner that maximizes that address risk However, proof. or facilitates verdict as each conviction than unanimous something wrong charged, when the result there is of assessment is in which evasion exposes duplicitous permit indictment is a should not indictments trial courts (such one) than a on less conviction that combine offense defendant as this verdict. multiple unanimous in a sin- across conduct Ignoring permits risk gle count.20 Nevertheless, does not warrant this case “on the narrow that rest indictments because, correctly majority as the reversal escape of tax law” basis evasion out, record demonstrates points “[t]he “measuring] that in- step more crucial of more the assessment of than Root evaded prohibi- against purposes dictment the of $50,000 in in of income each duplicity” against to ensure fairness. tion Op. Although at 154. the question.” Maj. Shorter, at 879. F.Supp. jury charge the do not indictment and segregate Root’s conduct appropriately

year, “Root’s evasive conduct was consis- V. Venue during three-year period.” the time tent majority that the “Gov- agree I with the Moreover, first filed amend- when Root proving of ven- ernment bears the burden 2004, only in reported returns June he ed by preponderance of the evidence and ue made to New payments the commission proper be for each count of the venue must the Perspectives; report he did not other I Maj. Op. at also indictment.” 155. Accordingly, jury no income. reasonable a continuing that tax evasion can be agree Root of acquit could have voted evasion 3237(a). Id. at offense under U.S.C. any the of assessment of for of However, I it as believe that is du- 156. in with which he was Count Two. years of plicitous multiple to combine eva- Similarly, the record sufficient ac- reflects Two, I into am sion of assessment Count tivity Pennsylva- in the Eastern District the conclu- majority’s in dubitante about nia to in that district. establish venue sion that venue for Count Two the outset, the as the As I noted at any can in one indictment rest conduct duplicity the majority explains, doctrine of year. to “avoid[ is intended the ... risk that ] Moreover, majority’s the conclusion that jurors may not have unanimous as to been ” locality purpose of a crime for the the any charged.... “[t]he one of crimes Mar- ‘over the whole area 733; Maj. Op. venue extends giotta, 646 F.2d at see also by an of- explained, propelled at 155. I have also Shorter which force As propose jury bring to cause the Government to the Government decided to this indict- real Pennsylvania ment the to address that concern. Eastern District instructions However, mystery rather than Ohio. that is following requested The as Government solve, that we do not and it is one that need jury as to to how the should be instructed cannot be solved on this record. attempted to evade or defeat a whether Root only prove government need one tax: “The Although answers the Government now offense, satisfy act to this element of but any question of whether Root suffered unanimously you agree on act or must which prejudice by stating "there was no conceiva- 38, Request No. acts were committed.” Gov’t jury may way” that have concluded ble (footnote Jury Proposed at 60-61 Instructions tax evasion in some but committed omitted). years, sufficiently not all of the the risk was ” troubling. procedure. operates’ legal They fender Id. at deep raise issues Johnson, (quoting States public United policy light in the of which 65 S.Ct. 89 L.Ed. 236 U.S. legislation be must If construed. an (1944)). Supreme has Court held Congress permits enactment of equally 3237(a) applies, pur- where 18 for U.S.C. underlying spirit of the constitution- venue, poses of a crime is “committed al concern for trial the vicinage to be part all of places any of it took than respected disrespect- rather to be place, appropriate and venue [is] ed, go construction should in the di- any of them.” United States v. Rodri- rection of constitution. 275, 282, guez-Moreno, 526 U.S. 119 S.Ct. concerns, To balance such the Court of (1999). Yet, 143 L.Ed.2d 388 Appeals Circuit, the Second for exam- Court clear deciding made that it was not suggests ple, may “when venue prop- permissibly whether “venue also erly lie more one than district under a upon based the effect of a defendant’s continuing theory, offense we should also conduct in a district than other the one ask ‘whether question the criminal acts which performs the defendant the acts bear “substantial contacts” with given Id. at constituting offense.” 279 n. ” Ramirez, venue.’ United States v. 119 S.Ct. 1239. In States v. John- (2d Cir.2005) F.3d (quoting Unit- son, majority, cited the the Court laid Saavedra, v. ed States out potential dangers expanding Cir.2000)). To determine “a whether cho- venue: sen prejudicial venue is unfair or to a By utilizing the doctrine of a continu- defendant,” a court “takes into account offense, ing may, sure, Congress to be (1) four crime, main factors: the site of the provide locality that the of a crime shall (2) (3) nature, its elements place extend over the whole area where effect of the criminal conduct which propelled by force an offender (4) occurs, and suitability of the venue Thus, operates. illegal an use of the chosen for factfinding.” accurate Saave- may subject mails ... the user prose- dra, 223 F.3d at 93. cution in the district where he sent the Ultimately, the facts of this case do not arrival, goods, or in the district of their require or support holding that is as any Plainly

or in district. intervening implied by as the one majority. broad enough, leeway such opens not appropriate Venue is here because Root hardship door to needless to an accused evaded assessment income from the by prosecution remote from home and Eastern District Pennsylvania each from appropriate facilities for defense. year for which charged. he was It appearance also leads to the of abus- es, abuses, if in the selection of VI. Conclusion what be deemed a tribunal favor- important It is prosecution. judg- able to stress that our to the These are mat- affirming ment conviction closely ters that touch fair this should not adminis- tration obfuscate the fact that justice of criminal this indictment public it, confidence in drawn in ultimately on which it manner created needless rests. These are in risks of verdict important that was not factors unanimous. Nevertheless, though consideration of the effective en- even this indictment clearly forcement of the Ques- duplicitous criminal law.... is and could have other- cases, tions of venue in criminal there- wise process by resulted denial of due fore, not merely are matters of formal depriving requirement jury this though bringing and even unanimity, Eastern District

prosecution I questionable, certainly

Pennsylvania affirming the conviction

join judgment explained. I have

for the reasons Secretary Labor, SOLIS, L.

*Hilda Department of

United States

Labor, Appellant, Mickey Ostrowski, Johnson, Jr.;

John D.C.,

Intervenor-Plaintiffs 234, TRANSPORT

LOCAL UNION.

WORKERS

No. 09-1143. Appeals, States Court

Third Circuit.

Argued Sept. 2009.

Filed Nov.

* 43(c) pursuant to F.R.A.P. Amended

Case Details

Case Name: United States v. Root

Court Name: Court of Appeals for the Third Circuit

Date Published: Oct 29, 2009

Citation: 585 F.3d 145

Docket Number: 08-2888

Court Abbreviation: 3rd Cir.