432 F.3d 651 (6th Cir. 2005), 04-6184, United States v. Stone

Docket Nº:Charles C. STONE (04-6184); Dora B. Stone (04-6185), Defendants-Appellants.
Citation:432 F.3d 651
Party Name:UNITED STATES of America, Plaintiff-Appellee, v.
Case Date:December 23, 2005
Court:United States Courts of Appeals, Court of Appeals for the Sixth Circuit
 
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Page 651

432 F.3d 651 (6th Cir. 2005)

UNITED STATES of America, Plaintiff-Appellee,

v.

Charles C. STONE (04-6184); Dora B. Stone (04-6185), Defendants-Appellants.

Nos. 04-6184, 04-6185.

United States Court of Appeals, Sixth Circuit.

December 23, 2005

Argued: October 27, 2005

Appeal from the United States District Court for the Eastern District of Tennessee at Chattanooga. No. 02-00189—Curtis L. Collier, District Judge.

Page 652

ARGUED:

Douglas A. Trant, Knoxville, Tennessee, for Appellants.

Brian Galle, TAX DIVISION, DEPARTMENT OF JUSTICE, Washington, D.C., for Appellee.

ON BRIEF:

Douglas A. Trant, Knoxville, Tennessee, Roger W. Dickson, Travis R. McDonough, MILLER & MARTIN, Chattanooga,

Page 653

Tennessee, for Appellants.

Brian Galle, Alan Hechtkopf, TAX DIVISION, DEPARTMENT OF JUSTICE, Washington, D.C., for Appellee.

Before: KEITH, KENNEDY, and BATCHELDER, Circuit Judges.

OPINION

KENNEDY, Circuit Judge.

On March 26, 2004, Defendants Charles C. Stone and Dora B. Stone (collectively "Defendants" or "the Stones") were convicted by a jury of one count of conspiring to defraud the United States by impeding the Internal Revenue Service in the ascertainment and collection of tax, in violation of Title 18 U.S.C. § 371, and three counts of attempting to evade income tax, in violation of Title 26 U.S.C. § 7201. They were both sentenced under the then mandatory U.S. SENTENCING GUIDELINES MANUAL (Guidelines). On appeal, they jointly and individually raise errors with respect to both their convictions and their sentences, primarily based on the United States Supreme Court's rulings in Crawford v. Washington, 541 U.S. 36 (2004), and United States v. Booker, 543 U.S. 220, 125 S.Ct. 738 (2005). For the following reasons, we AFFIRM their convictions, but REMAND for re-sentencing.

BACKGROUND

Defendant Charles Stone owned Benton Manufacturing Company (BMC), a textile facility, located in Benton, Tennessee. Mr. Stone managed the company, and his wife, Mrs. Dora Stone, handled many administrative tasks, including keeping its books. BMC kept a corporate ledger of all expenses for the company. The ledger contained a stub for each check drawn on the corporate account. Mrs. Stone coded each stub to indicate what kind of corporate expense each check had been drawn to pay. She then provided the stubs to the corporate accountant, a Mr. Robert George, who would use those codes to determine whether each expense was a proper tax deduction on BMC's corporate tax return.

Between 1993 and 1995, Defendants drew on corporate accounts to pay for over $200,000 in personal expenses. Checks drawn on the corporate account during this period were used to...

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