United States v. Hopkins, 020513 FED10, 11-2114

Docket Nº:11-2114, 11-2115
Opinion Judge:MARY BECK BRISCOE, Chief Judge.
Party Name:UNITED STATES OF AMERICA, Plaintiff-Appellee, v. MARK E. HOPKINS, Defendant-Appellant. UNITED STATES OF AMERICA, Plaintiff-Appellee, v. SHARON J. HOPKINS, Defendant-Appellant.
Judge Panel:Before BRISCOE, Chief Judge, KELLY and GORSUCH, Circuit Judges. KELLY, Circuit Judge, concurring in part and dissenting in part.
Case Date:February 05, 2013
Court:United States Courts of Appeals, Court of Appeals for the Tenth Circuit
 
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UNITED STATES OF AMERICA, Plaintiff-Appellee,

v.

MARK E. HOPKINS, Defendant-Appellant.

UNITED STATES OF AMERICA, Plaintiff-Appellee,

v.

SHARON J. HOPKINS, Defendant-Appellant.

Nos. 11-2114, 11-2115

United States Court of Appeals, Tenth Circuit

February 5, 2013

(D.C. No. 2:09-CR-00863-MCA-1) (D. N.M.)

Before BRISCOE, Chief Judge, KELLY and GORSUCH, Circuit Judges.

ORDER AND JUDGMENT [*]

MARY BECK BRISCOE, Chief Judge.

After examining the briefs and appellate record, this panel has determined unanimously that oral argument would not materially assist in the determination of this appeal. See Fed. R. App. P. 34(a)(2); 10th Cir. R. 34.1(G). The case is, therefore, submitted without oral argument.

Mark Hopkins and Sharon Hopkins, husband and wife, (Defendants when referenced jointly) separately appeal their sentences which were imposed following their convictions for tax evasion and conspiracy to defraud the United States. Both Mark and Sharon Hopkins appeal sentencing enhancements applied by the district court in calculating their sentences. Sharon Hopkins appeals the district court's enhancement of her sentence for use of minors in the commission of the offense (U.S.S.G. § 3B1.4) and for her aggravating role in a criminal activity (U.S.S.G. § 3B1.1(c)). Sharon Hopkins also appeals the district court's denial of her motion to dismiss the indictment for violation of her Sixth Amendment right to choice of counsel. Mark Hopkins appeals the district court's enhancement of his sentence for obstruction of justice (U.S.S.G. § 3C1.1). Exercising jurisdiction pursuant to 18 U.S.C. § 3742(a) and 28 U.S.C. § 1291, we affirm.

I Factual Background

After becoming increasingly involved in tax-protester groups, 1 Defendants decided to stop "volunteering" to pay federal and state taxes. From 1996 to 2009, they paid no income tax. Instead, Defendants created several trust accounts, which they believed were tax proof, and designated family members and friends as trust beneficiaries and themselves as trust managers. The trusts were "sovereign trusts" sold to them by tax-protester seminar leaders who touted the trusts as tax exempt. Mark Hopkins, an emergency-room doctor, had his employers (medical institutions) pay his earnings to a trust, Shalom Enterprises, an entity incorporated under Oregon nonprofit law. According to Defendants Shalom Enterprises was a nonprofit ministry corporation, but in fact its funds were used to finance their living expenses. Defendants transferred funds and property among their numerous trusts to evade detection by the Internal Revenue Service (IRS). Predictably, Defendants faced mounting difficulties with the IRS, and on April 9, 2009, they were indicted on seven counts of tax evasion under 26 U.S.C. § 7201 and one count of conspiracy to defraud the United States under 18 U.S.C. § 371.

District Court Proceedings

The initial conditions of Mark Hopkins's pretrial release required him to pay $103, 497 by October 27, 2009, and $34, 499 on January 15, 2010, for his estimated liability for 2009 taxes. R. Suppl. Vol. 6, at 4. On October 16, 2009, the district court conducted a show cause hearing regarding Mark Hopkins's alleged inability to meet the terms of the conditions of his pretrial release. After the hearing, the district court adopted the parties' agreed modification: Mark Hopkins would make a one-time payment of $60, 000 into the court registry by October 27, 2009—rather than the IRS—and future monthly payments of $10, 000 into the court registry "until such time as a legal determination is made as to Defendant's tax liability or until further order of the Court." Id. at 2.

Thereafter, on June 4, 2010, Defendants filed a joint emergency motion for modification of the conditions of pretrial release and for release of the funds, totaling $130, 000, which were previously paid into the court registry pursuant to the pretrial release conditions. Defendants argued that due to unexpected medical, legal, and living expenses, they were facing financial difficulties that affected their ability to pay for their legal defense; they argued that an inability to use the court registry funds would violate their Sixth Amendment rights to counsel of choice.

On June 18, the district court, "sua sponte reconsidered the matter of the escrowed deposits and . . . conclude[d] that the escrowed monies should be returned because the Court finds that it should not interpose itself between Defendants and the civil taxing authorities with respect to the obligations relating to estimated taxes." Id. at 6-7 (emphasis omitted) (ordering that "all funds that have been paid into the Court Registry by Defendants shall be released directly to Mark Hopkins upon entry of this Order"). Accordingly, the district court modified the pretrial release conditions by no longer requiring payments into the court registry and ordered the court clerk to release the funds previously paid into the court registry. The district court "strongly reminded" Defendants that failure to pay quarterly estimated tax payments would violate federal law, which would in turn violate the conditions of pretrial release. Id. at 6-7.

Four days later, on June 22, 2010, the IRS served a notice of levy, pursuant to I.R.C. § 6331(1), for the court registry funds held by the court clerk to collect past due taxes for tax years 1996 and 1997 totaling $504, 317.75. At the time of the notice of levy, the court clerk had not yet acted on the district court's order to release the funds to Mark Hopkins. Unsure of the proper course of action, the court clerk filed an interpleader action for determination of the respective parties' rights to the funds.

In response to the IRS's levy, Defendants filed in the criminal action an emergency motion for release of the levied funds, which the district court denied the following day, explaining that "[t]he jurisdiction of the District of New Mexico [was] . . . invoked properly by the filing of an Interpleader action." R. Suppl. Vol. 9, at 1. After this denial, Defendants filed a second motion for the same relief on July 14, but now asserted constitutional issues as the basis for relief. Again, the district court denied this motion.

The following day, Sharon Hopkins's counsel, Jonathan Altman, moved to withdraw as counsel for nonpayment of legal fees, which the district court granted.2 After briefly appearing pro se, Sharon Hopkins opted for court-appointed counsel. The court appointed counsel on August 23. Shortly thereafter, Sharon Hopkins retained Tommy Cryer. And, on September 10, the district court terminated her court-appointed counsel. Mr. Cryer, as lead counsel, and Mr. Hanisee, as local counsel, represented Sharon Hopkins from that point through trial and sentencing. Mr. Becraft and Mr. Hanisee continued to represent Mark Hopkins through trial and sentencing.

On July 29, 2010—before Sharon Hopkins retained Mr. Cryer, but after her counsel, Mr. Altman, withdrew—Defendants filed a motion to dismiss the indictment contending their Sixth Amendment rights were violated by the levy and their resulting inability to use the funds for defense purposes. On August 20, the district court denied the motion to dismiss the indictment, concluding that the government had not unconstitutionally restrained Defendants' assets by filing a levy on the court registry funds. R. Suppl. Vol. 4 pt. 2, at 383-84. Relying on United States v. Nichols, 841 F.2d 1485 (10th Cir. 1988), the court concluded that the government's interest in obtaining the levied funds was substantial, and the IRS's explanation for the timing of the levy credible. Accordingly, the district court concluded that it was reasonable for the IRS to file a levy after the court ordered the funds released to Mark Hopkins, and that the levy did not violate their Sixth Amendment rights. The district court was not persuaded by Defendants' argument that this case was similar to the facts in United States v. Stein, 541 F.3d 130 (2d Cir. 2008), and denied their motion to dismiss the indictment.

On December 17, 2010, the court in the interpleader action found that the IRS was entitled to the court registry funds through the execution of its levy and that Defendants were not entitled to the payment of attorney fees or costs out of the interpled funds. Between the filing and resolution of the interpleader action, Defendants filed for bankruptcy and were convicted of tax evasion: On September 3, 2010, they voluntarily filed for Chapter 13 bankruptcy, 3 and on September 29, after a seven-day trial, a jury found them guilty of seven counts of tax evasion under 26 U.S.C. § 7201 and one count of conspiracy to defraud the United States under 18 U.S.C. § 371.

Sentencing

At Sharon Hopkins's sentencing hearing, the district court adopted the factual findings and conclusions of the PSR, with the exception of finding an enhancement for obstruction. The district court concluded that the other enhancements—the aggravated role, the use of minor, and the sophisticated means enhancements—were warranted and increased her base offense level by six, to an offense level of 28. The district court then sentenced Sharon Hopkins to 97 months' imprisonment and a three-year term of supervised release following imprisonment. The district court additionally ordered her to pay the IRS $1, 744, 222.26 in restitution, owed jointly and severally with her husband.

At Mark Hopkins's sentencing hearing, the district court adopted in full the factual findings and conclusions of the PSR, for a criminal history category of I and an offense level of 30. The district court found all of the enhancements recommended in the PSR were warranted and sentenced him to 120 months' imprisonment and a three-year term of...

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