U.S. v. Clark, 96-10559

• Citation: 139 F.3d 485
• Decision Date: 17 April 1998
• Docket Number: No. 96-10559,96-10559
• Parties: -1793, 98-2 USTC P 50,544 UNITED STATES of America, Plaintiff-Appellee, v. Lesliedawn CLARK, Steven Lane Johnson, Charles A. Dixon, Donald Alan Friddell, Shirley A. Summers, Richard Lee Summers, Leroy Schaefer, and Roxanne Schaefer, Defendants-Appellants. Summary Calendar.
• Court: United States Courts of Appeals. United States Court of Appeals (5th Circuit)

Page 485

139 F.3d 485

81 A.F.T.R.2d 98-1793, 98-2 USTC P 50,544

UNITED STATES of America, Plaintiff-Appellee, v. Lesliedawn CLARK, Steven Lane Johnson, Charles A. Dixon, Donald Alan Friddell, Shirley A. Summers, Richard

Lee Summers, Leroy Schaefer, and Roxanne

Schaefer, Defendants-Appellants.

No. 96-10559

Summary Calendar.

United States Court of Appeals, Fifth Circuit.

April 17, 1998.

Robert E. Lindsay, Allan L. Hechtkopf, Gregory Victor Davis, U.S. Dept. of Justice, Tax Div., Washington, DC, for Plaintiff-Appellee.

Lesliedawn Clark, Fort Worth, TX, pro se.

Steven Lane Johnson, Bastrop, TX, pro se.

Charles A. Dixon, Bastrop, TX, pro se.

H. Campbell Zachry, Olen Grant Underwood, Jenkins & Gilchrist, Dallas, TX, for Friddell.

Shirley S. Summers, Fort Worth, TX, pro se.

Richard Lee Summers, Fort Worth, TX, pro se.

Dale Jones, Shelton & Jones, Lubbock, TX, for Leroy Schaefer.

Mary Kay Sicola, Austin, TX, for Roxanne Schaefer.

Appeals from the United States District Court for the Northern District of Texas.

Before JOLLY, BENAVIDES and PARKER, Circuit Judges.

PER CURIAM:

Defendants, Lesliedawn Clark, Steven Lane Johnson, Donald Alan Friddell, Charles Dixon, Shirley S. Summers, Richard Lee Summers, Leroy Schaefer, and Roxanne Schaefer, appeal from the judgments of conviction entered against them by the United States District Court for the Northern District of Texas. Clark and Leroy Schaefer also appeal the computation of their sentences. For the reasons set forth below, we AFFIRM.

I.

Defendants were involved with, and operated in part, the Pilot Connection Society ("TPCS"), an organization with the stated purpose of putting the IRS (which it considered "domestic enemy number one") out of business. In furtherance of this objective, TPCS created and sold an "untax package," which purportedly taught people how to remove themselves from the federal tax system. TPCS marketed its untax package through informational seminars given across the country. TPCS publicized its seminars through flyers and advertisements, in which it claimed that taxes were voluntary, that there was no requirement for a person to file tax returns, that the tax system was illegal, and that there were legal ways not to pay taxes.

At the seminars, ¹ TPCS represented that the untax package provided a way of legally and permanently "untaxing" oneself so that a person would no longer be required to pay income taxes or file a return. Seminar attendees were informed, however, that TPCS was a First Amendment society and that it could not give out information that could be construed as legal advice except to its members. Thus, if a person wanted to learn more about the "untaxing" process, he was required to become a TPCS member, at a cost of $45.

The $45 membership fee entitled a TPCS member to a two-hour consultation at a follow-up meeting with a sales representative of TPCS, referred to as an Associate Member. ² At the follow-up meeting, the Associate Member attempted to sell the untax package to the new TPCS member. The fee for being untaxed was generally the greater of $2100 or ten (10) percent of the dollar amount owed to the government. In addition to selling the untax package, Associate Members also counseled and assisted new members in the untaxing process. As compensation, Associate Members received a percentage of the untaxing fee paid by a new member.

The untax package included sample letters to be used to inform the government that the member was not liable for tax. The package also contained samples of letters to be sent by members to employers, bankers, and mortgage holders. The sample letters purportedly provided a method whereby TPCS members could revoke their signatures from their bank accounts and revoke previously filed tax returns.

Another part of the untaxing process involved TPCS members filing new Forms W-4 so that no federal income tax was withheld from their paychecks. The evidence showed that, although the Associate Members did not advise TPCS members of the exact number of exemptions that they should claim, the Associate Members clearly advised their clients to claim as many exemptions as necessary to eliminate withholding taxes. Thus, members were often left to simply guess at the number of exemptions that they would need to claim. If a member's first guess was not high enough to eliminate withholding, TPCS advised the member to file another Form W-4 claiming an even higher number of exemptions until he finally found a number high enough to completely eliminate withholding. Some TPCS members claimed as many as thirty (30) exemptions on their new Forms W-4. TPCS further instructed its members completing new Forms W-4 to write "For Identification Only" next to their social security numbers and to write "Without prejudice, UCC 1-207" next to their signatures.

In addition to the untaxing process, the untax package had a second component for the protection of assets. TPCS advised its members to close their bank accounts to prevent the IRS from seizing the funds in those accounts. TPCS also suggested that its members barter or deal only in cash or money orders. TPCS further advised its members that all of a member's money could be put into a trust fund for protection from the IRS and that the trust could not be taxed.

Finally, TPCS suggested several methods that its members should employ in fighting the IRS, including filing a claim for abatement, suing IRS employees, and filing a Title 15 commercial lien. TPCS claimed that one of its members filed a commercial lien against his employer, IRS agents, and others for $236,000,000. TPCS informed members that the lien would last for 100 years and would appear on the credit report of the public official against whom it was filed. TPCS also suggested that its members could have IRS agents attempting to do their jobs arrested by the sheriff or could make citizen's arrests.

II.

On June 7, 1995, a sixteen (16) count indictment was returned against the defendants. Count 1 of the indictment charged all of the defendants with conspiracy to defraud the United States, in violation of 18 U.S.C. § 371. The remaining counts charged individual defendants with aiding and abetting the filing of fraudulent Forms W-4, in violation of 26 U.S.C. § 7206(2). Friddell and Shirley Summers, however, were named only in Count 1. On January 19, 1996, a jury convicted all eight defendants of conspiracy to defraud the United States; Clark of Counts 2 and 3; Johnson of Count 8; Dixon of Counts 5 and 7; Richard Summers of Counts 7, 9, and 10; Leroy Schaefer of Counts 12, 14, 15, and 16; and Roxanne Schaefer of Counts 12, 13, and 14. The jury acquitted Clark of Count 4, Dixon of Count 6, and Roxanne Schaefer of Count 11. All of the defendants appeal their convictions. Clark and Leroy Schaefer also appeal the computation of their sentences.

III.

All of the defendants argue that Count 1 of the indictment is insufficient as a matter of law. Specifically, the defendants argue that the indictment is defective because it merely recites the "generic" language of the statute without identifying the specific facts underlying the offense and because it fails to identify the object of the alleged scheme to defraud the United States.

Although we agree that the indictment is far from a model of clarity, "[t]he test for validity is not whether the indictment could have been framed in a more satisfactory manner, but whether it conforms to minimal constitutional standards." United States v. Gordon, 780 F.2d 1165, 1169 (5th Cir.1986). An indictment is sufficient in a constitutional sense if it "(1) enumerates each prima facie element of the charged offense, (2) notifies the defendant of the charges filed against him, and (3) provides the defendant with a double jeopardy defense against future prosecutions." United States v. Flores, 63 F.3d 1342, 1360 (5th Cir.1995) (quotation and citation omitted). We find that the conspiracy charge in this case meets these minimal standards.

To allege a violation of § 371, the government must allege two elements. First, the government must allege that two or more people agreed to defraud the United States. 18 U.S.C. § 371. The defraud clause of § 371 reaches both a conspiracy to cheat the government out of property or money and any conspiracy designed to impair obstruct, or defeat the lawful function of any department of the government. See Hammerschmidt v. United States, 265 U.S. 182, 187-88, 44 S.Ct. 511, 512, 68 L.Ed. 968 (1924); United States v. Hopkins, 916 F.2d 207, 213 (5th Cir.1990). Second, as in all conspiracies, the government must allege that at least one of the alleged conspirators committed an overt act in furtherance of the objectives of the conspiracy. See United States v. Burton, 126 F.3d 666, 670 (5th Cir.1997).

In this case, Count 1 of the indictment tracked the language of the defraud clause of § 371 by charging that the defendants "conspired, agreed, and combined to defraud the United States." Although we agree with the defendants that this language, by itself, would have been insufficient, the indictment does more than merely recite the language of the statute. In the "Manner and Means" section, the indictment outlined the scheme in which the defendants engaged, thereby clearly establishing that the defendants were charged with cheating the government out of money and with "impairing, obstructing, or defeating" a lawful function of the IRS--i.e., collecting taxes. In sum, therefore, when viewed as a whole, we find that the indictment adequately informed the defendants of the nature of the charges against them and was sufficiently specific to enable them to raise the defense of double jeopardy in any future prosecutions.

IV.

Friddell, Clark, Leroy Schaefer, and Roxanne Schaefer challenge the sufficiency of the evidence to support their convictions under § 371. In reviewing the sufficiency of the evidence, we view the evidence and all inferences to be...