197 F.3d 1059 (11th Cir. 1999), 98-4781, United States v Hunerlach

Docket Nº:98-4781
Citation:197 F.3d 1059
Party Name:UNITED STATES OF AMERICA, Plaintiff-Appellee, v. GEORGE R. HUNERLACH, Defendant-Appellant.
Case Date:December 07, 1999
Court:United States Courts of Appeals, Court of Appeals for the Eleventh Circuit
 
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197 F.3d 1059 (11th Cir. 1999)

UNITED STATES OF AMERICA, Plaintiff-Appellee,

v.

GEORGE R. HUNERLACH, Defendant-Appellant.

No. 98-4781

IN THE UNITED STATES COURT OF Appeals, FOR THE ELEVENTH CIRCUIT

December 7, 1999

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Appeal from the United States District Court for the Southern District of Florida D. C. Docket No. 97-8109-CR-KLR

Before ANDERSON, Chief Judge, MARCUS, Circuit Judge, and MILLS[*], Senior District Judge.

RICHARD MILLS, Senior District Judge:

Hunerlach appeals from his convictions and sentence which he received for willful evasion of payment of taxes (26 U.S.C. § 7201) and filing a false statement (26 U.S.C. § 7206(1)).

Mainly, he argues that his conviction for filing a false statement should be reversed because the prosecution was commenced beyond the six-year statute of limitations and the district court erroneously admitted evidence in violation of his constitutional rights. He also challenges his conviction for wilful evasion of payment of taxes arguing that there was insufficient evidence to sustain the conviction.

He further argues that the district court erroneously included interest and penalties as "tax loss" in calculating his sentence.

We affirm the convictions, but vacate and remand for re-sentencing.

I. FACTS

On September 7, 1988, Hunerlach pleaded guilty to one count of a three-count indictment charging him with filing false tax returns for the years 1981 through 1983, a violation of 26 U.S.C. § 7206(1), and entered into a plea agreement with the government. In the plea agreement, Hunerlach agreed to pay the income tax liabilities arising from the false returns within a "reasonable time." He served a brief prison time as a result of his conviction on that charge.1 Shortly after his release from prison, instead of paying the tax obligations, Hunerlach transferred most of his money to accounts in Barclays Bank in the Bahamas, which, by the time of trial in this case, contained over $200,000.00. Hunerlach also started to purchase, sell, and/or mortgage various pieces of property, including real estate and private planes, through the use of nominee corporations named DTS,2 Dagny,3 Henry Reardon Inc.,

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and Dobill.4

Meanwhile, the government attempted to collect on Hunerlach's tax liability. On November 23, 1989, Manual Junco, Hunerlach's Certified Public Accountant (CPA) and power of attorney, signed a Form 870 Waiver of Restrictions on assessment and Collection of Deficiency and agreed to the assessment and collection of past due taxes in the amount of $306,020 for 1981 through 1983, penalties and additions to the tax in the approximate amount of $228,623, and interest. Approximately a year later, Hunerlach and his wife signed a notice-of-deficiency waiver, and agreed to the determination by the IRS of income tax deficiencies and penalties for taxable years 1984, and 1986 through 1988 in the amount of $69,891, penalties and additions to the tax in the approximate amount of $172, 519, and interest. However, Hunerlach never made any voluntary payments on the confessed tax liabilities.

In 1993 and 1994, Hunerlach was involved in two real estate transactions in Hilton Head, South Carolina. In 1993, Hunerlach, claiming to represent Dagny, contacted attorney Sydney Clark to purchase a lot at the Bridgeport Shipyard Plantation. In 1994, Hunerlach contacted attorney Jack Biel concerning the purchase of a unit at Oceanwalk Condos on South Forrest Beach. During the transaction, Biel dealt solely with Hunerlach and no one else. On May 6, 1994, Hunerlach, signing as an agent of Dagny, agreed to purchase the Oceanwalk Condo for $65,000. As earnest money, Hunerlach provided a check written on a personal bank account in the names of Hunerlach and his wife.

Paul Cale of Hilton Head Vacation rentals managed both of the properties. Hunerlach told Cale that he was an agent for Dagny. He also told Cale to hold the collected rent in an escrow account until further direction from Hunerlach. The properties produced approximately$10,000.00 to $13,000.00 in gross income. Cale made some checks payable to Dagny but, at Hunerlach's instruction, sent the money to Hunerlach at his home in Fort Pierce, Florida.

On May 19, 1994, Hunerlach met with IRS Revenue Officer Michael Stone pursuant to a summons to discuss the collection of Hunerlach's tax liabilities. During the meeting, Stone asked questions that appeared on IRS Form 433A (Collection Information Statement for Individuals), and Hunerlach responded to the questions. Stone filled out the Form based on the answers given by Hunerlach, and at the end of the meeting, Hunerlach signed the form.5 Hunerlach provided false information to Stone regarding his assets, which Hunerlach later certified as true by signing the Form.

Several years later, in June of 1997, IRS special agents John Wilkinson and Dan Dockum met with Hunerlach, at Hunerlach's request. At the beginning of the interview, Wilkinson informed Hunerlach that, as a special agent, Wilkinson investigated the possibility of criminal violations, and that he wanted to ask a few questions regarding Hunerlach's tax liabilities. Wilkinson then advised Hunerlach of his rights under the Fifth Amendment. Hunerlach acknowledged that he understood his rights and proceeded to answer numerous questions on a variety of topics. On several occasions during the taped interview, the agents asked Hunerlach if he would sign a waiver that would permit Barclay Bank to release Hunerlach's foreign bank records, but Hunerlach refused to sign such a waiver.

A grand jury returned a two-count indictment against Hunerlach on September 23, 1997. Count I charged Hunerlach with

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willfully evading the payment of tax, a violation of 26 U.S.C. § 7201. Count II charged him with willfully submitting false information on a statement, a violation of 26 U.S.C. § 7206.

Before trial, Hunerlach moved to dismiss Count I based on statute of limitations. That motion was denied. During the course of the trial, the district court admitted, inter alia, evidence of Hunerlach's refusal to sign a waiver to his Barclay Bank account, and the reasons that he gave for refusing to sign the waiver. Moreover, the district court admitted, over Hunerlach's objection, testimony of a case agent which relayed conversations with Osman and Higgs (alleged officers of Hunerlach's foreign corporations), which showed they were not real directors of the corporation, but that they were mere nominee directors. At the end of the prosecution's case, Hunerlach moved for judgment of acquittal based on sufficiency of the evidence. The district court denied the motion. A jury convicted Hunerlach on both counts.

At sentencing, the district court found that the total "tax loss" was over $3,000,000.00, which included the interest and penalties that accrued from 1981 to 1988. As such, the district court assigned a base offense level of 21 pursuant to U.S.S.G. § 2T4.1 (1997). The district court enhanced the base offense level by four levels, pursuant to § 2T1.1(b)(2) and § 3C1.1. Hunerlach's criminal history category was I, which yielded a sentencing range of 57 to 71 months. However, due to the statutory sentence maximum of five years and three years for Count I and Count II, respectively, the district court sentenced Hunerlach to a term of 60 months imprisonment for Count I, and 36 months for Count II, to run concurrently.

II. ISSUES

Appellant raises the following issues on appeal:

1.Whether the district court erred in denying Hunerlach's motion to dismiss Count I based on the statute of limitations;

2.Whether the district court erroneously admitted evidence in violation of Hunerlach's constitutional rights;

3.Whether the district court erred in denying Hunerlach's motion for judgment of acquittal on Count II of the indictment based on sufficiency of the evidence;

4.Whether the district court erred in including interest and penalties in calculating "tax loss" for the purposes of determining Hunerlach's base offense level.

III. DISCUSSION

A. Statute of Limitations

Appellant argues that the district court should have dismissed Count I of the indictment because it was barred by the statute of limitations. We review the district court's interpretation and application of statute of limitations de novo. See United States v. Gilbert, 136 F.3d 1451, 1453 (11th Cir. 1998) (citations omitted).

As noted...

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