United States v. Simmons, 040111 FED5, 09-11031

Docket Nº:09-11031
Opinion Judge:PER CURIAM:
Party Name:UNITED STATES OF AMERICA, Plaintiff-Appellee, v. JOYCE M. SIMMONS, doing business as Diamond Notary and Tax Service, Defendant-Appellant.
Judge Panel:Before KING, BENAVIDES, and ELROD, Circuit Judges.
Case Date:April 01, 2011
Court:United States Courts of Appeals, Court of Appeals for the Fifth Circuit



JOYCE M. SIMMONS, doing business as Diamond Notary and Tax Service, Defendant-Appellant.

No. 09-11031

United States Court of Appeals, Fifth Circuit

April 1, 2011

Appeal from the United States District Court for the Northern District of Texas USDC No. 4:08–CR–131-1

Before KING, BENAVIDES, and ELROD, Circuit Judges.


Joyce M. Simmons appeals the sentence imposed following her guilty plea conviction for six counts of preparation of false tax returns. The district court sentenced Simmons to the statutory maximum sentence of three years of imprisonment on each count, and it ordered that the sentences would run consecutively for a total of 216 months. It also ordered Simmons to pay $28, 261, 295.08 in restitution to the Internal Revenue Service (IRS). We AFFIRM.


Simmons argues that the district court erred by finding that the amount of tax loss for her offense was over $28 million. She maintains that the district court erred because the $28 million estimation was not conservative and reasonable, because the sample of forty-one tax returns investigated by the IRS was not a random sample, and because she was not given enough time to prepare a defense to the allegation that the estimated loss was $28 million prior to the hearing regarding her initial plea agreement. She further contends that the loss calculation was incorrect because it included tax returns filed for the 2002 tax year, for which the statute of limitations expired before her indictment, and the 2006 tax year, when she alleges she leased her business to others and did not participate in preparing tax returns. She also asserts that the loss amount calculation was unconstitutional under United States v. Booker, because it was based on facts not admitted by her or proved to a jury beyond a reasonable doubt. 543 U.S. 220 (2005).

While Simmons objected to the amount of loss calculation in the district court, she argued only that the amount of loss should be lower for equitable reasons and that she did not operate the business in tax year 2006. She did not raise any of the arguments that she raises on appeal except for her argument that she leased her business to others in tax year 2006. Thus, Simmons' argument regarding tax year 2006 is reviewed for clear error, while her remaining arguments are reviewed for plain error. See United States v. Neal, 578 F.3d 270, 272-73 (5th Cir. 2009).

The guidelines commentary specifically states that reasonable estimation of tax loss is allowed, and other courts have approved of the use of roughly the same method of estimation used by the district court. See U.S.S.G. § 2T1.1, cmt. n.1 (2008); United States v. Bryant, 128 F.3d 74, 75-76 (2d Cir. 1997); United States v. Maye, No. 99-4556, 2000 WL 223344 at *1 (4th Cir. 2000) (unpublished). The evidence in the pre-sentence report (PSR) and the testimony of IRS Agent Shannon Dawson established the method by which the estimated tax loss was calculated. While Simmons correctly states that the forty-one tax returns investigated by Agent Dawson were not a completely random sample, the record does not indicate that those returns would have a higher falsity rate than any other returns prepared by Simmons. Moreover, the PSR correctly noted that Agent Dawson's calculation was conservative because she used the lower of two reasonable falsity percentages that she calculated from the investigated sample, and she did not include any tax loss from approximately 3, 000 tax returns prepared by Simmons that did not include a Schedule C. As the method of estimating the tax loss was reasonable and Simmons did not produce evidence contradicting it, the district court did not commit error, plain or otherwise, in its tax loss calculation. See United States v. Clark, 139 F.3d 485, 490 (5th Cir. 1998).

Although Simmons' counsel received Agent Dawson's calculation of estimated loss the day before the hearing at which Simmons' first plea agreement was rejected, the calculation was fully explained at that hearing, which occurred over five months before sentencing, giving Simmons more than ample time to prepare any defense she desired. Also, her contention that the district court improperly included tax returns filed in tax year 2002 in the estimated loss calculation is refuted by the record as it shows that only tax returns filed in tax years 2003-2007 were included.

Though Simmons argued at sentencing that she did not run her tax preparation business in tax year 2006, she did not present any evidence supporting her claim, and the PSR indicated that she ran the business from 2002 until 2008. At sentencing, the government stated that its investigation revealed that Simmons executed a lease agreement with another person to manage the tax preparation business at the end of 2006, but that Simmons maintained control of the business despite the lease. Because Simmons did not present evidence contradicting the evidence set forth in the PSR, the district court did not err by accepting it. See Clark, 139 F.3d at 490.

Simmons' Booker argument is without merit. By rendering the guidelines advisory only, Booker eliminated the Sixth Amendment concerns that prohibited a sentencing judge from finding all facts relevant to sentencing. United States v. Mares, 402 F.3d 511, 519 (5th Cir. 2005). Hence, the district court's finding "by a preponderance of the evidence all the facts relevant to the determination of a [g]uideline sentencing range" was not error. Id.


Simmons next argues that the district court erred by applying an enhancement for her utilizing sophisticated means during the offense. She contends that the means she utilized were not sophisticated and that an enhancement for use of a special skill pursuant to U.S.S.G. § 3B1.3 should not have applied because she received an enhancement for being in the business of preparing tax returns. She asserts that the enhancement was not appropriate because a sophisticated means enhancement was not applied in United States v. Poltonowicz, 353 F.App'x 690 (3d Cir. 2009), even though the defendant in that tax preparation fraud case had previously worked as an analyst for the IRS criminal investigation division.

While Simmons was not a tax attorney or an accountant, special training is not necessary for the application of a sophisticated means enhancement. See United States v. Charroux, 3 F.3d 827, 837 (5th Cir. 1993). The evidence presented in the PSR showed that Simmons operated a tax return preparation business, trained and instructed employees on preparing false tax returns and creating fraudulent supporting documentation, and purchased personal information used to claim false dependents from clients and the homeless. Her argument that she could not receive an enhancement under § 3B1.3 and an enhancement for being in the business of preparing tax returns is irrelevant as she did not receive an enhancement under § 3B1.3. In addition, her reliance under Poltonowicz is misplaced as that case did not address the issue of a sophisticated means enhancement, and that opinion does not indicate whether a sophisticated means enhancement was applied or not. See Poltonowicz, 353 F.App'x at 691-95. Given the complex nature of Simmons' tax preparation fraud scheme, the district court's...

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