U.S. v. Brimberry

• Decision Date: 17 April 1992
• Docket Number: No. 90-3754,90-3754
• Citation: 961 F.2d 1286
• Parties: -1153, 92-1 USTC P 50,288 UNITED STATES of America, Plaintiff-Appellee, v. Janice A. BRIMBERRY, Defendant-Appellant.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 1286

961 F.2d 1286

69 A.F.T.R.2d 92-1153, 92-1 USTC P 50,288

UNITED STATES of America, Plaintiff-Appellee, v. Janice A. BRIMBERRY, Defendant-Appellant.

No. 90-3754.

United States Court of Appeals, Seventh Circuit.

Argued Sept. 17, 1991.

Decided April 17, 1992.

Norman R. Smith, Asst. U.S. Atty. (argued), Office of the U.S. Atty., Crim. Div., Fairview Heights, Ill., for plaintiff-appellee.

Spiros P. Cocoves (argued), Toledo, Ohio, for defendant-appellant.

Before CUDAHY and MANION, Circuit Judges, and REYNOLDS, Senior District Judge. ^*

MANION, Circuit Judge.

Defendant-appellant Janice A. Brimberry was convicted of making and subscribing a false Internal Revenue Service Collection Information Statement in violation of 26 U.S.C. § 7206(1) and attempted evasion of payment of income taxes in violation of 26 U.S.C. § 7201. The district court sentenced Brimberry under the Sentencing Guidelines to 33 months imprisonment and two years supervised release for each violation, to run concurrently. Brimberry appeals both her conviction and sentence. For the reasons set forth below, we affirm.

I. Background

This appeal is yet another chapter in the story of Stix & Company, Inc., the object of a massive embezzlement scheme that has generated a glut of litigation in Illinois and Missouri. See, e.g., United States v. Massa, 854 F.2d 315 (8th Cir.), cert. denied, 488 U.S. 973, 109 S.Ct. 508, 102 L.Ed.2d 543 (1988); United States v. Massa, 804 F.2d 1020 (8th Cir.1986); United States v. Brimberry, 803 F.2d 908 (7th Cir.1986), cert. denied, 481 U.S. 1039, 107 S.Ct. 1977, 95 L.Ed.2d 817 (1987); United States v. Brimberry, 779 F.2d 1339 (8th Cir.1985); United States v. Bednar, 776 F.2d 236 (8th Cir.1985); United States v. Brimberry, 744 F.2d 580 (7th Cir.1984); United States v. Massa, 740 F.2d 629 (8th Cir.1984), cert. denied, 471 U.S. 1115, 105 S.Ct. 2357, 86 L.Ed.2d 258 (1985); United States v. Bednar, 728 F.2d 1043 (8th Cir.), cert. denied, 469 U.S. 827, 105 S.Ct. 110, 83 L.Ed.2d 54 (1984). Stix & Company was a St. Louis, Missouri, broker-dealer firm engaged in the business of selling securities. In the late 70's, Thomas Brimberry, a senior vice-president and majority shareholder of Stix and, at the time, Janice Brimberry's husband, siphoned millions of dollars from the firm by manipulating margin accounts. Thomas, with the help of other Stix employees, would make false computer entries showing the receipt of nonexistent, fully-paid securities into the accounts. Once he created an appearance of equity in the accounts, Thomas would siphon money by authorizing checks to be drawn from these accounts. Although the government granted Thomas immunity from prosecution for his role in this scheme, he did go to jail for bankruptcy fraud, perjury and obstruction of justice. See United States v. Brimberry, 803 F.2d 908 (7th Cir.1986), cert. denied, 481 U.S. 1039, 107 S.Ct. 1977, 95 L.Ed.2d 817 (1987); United States v. Brimberry, 779 F.2d 1339 (8th Cir.1985); United States v. Brimberry, 744 F.2d 580 (7th Cir.1984).

Janice Brimberry was not merely an innocent bystander in the Stix swindle. At the trials of the co-conspirators, Janice admitted purchasing blank stock certificates and having the names of real securities (matching the false computer entries) printed on them. The false securities were placed in the vault at Stix as a means to avoid detection by Stix's auditors. Janice also falsified records, knowingly signed false income tax returns and destroyed evidence. Janice was indicted for her role in the Stix swindle but was granted immunity in exchange for her testimony.

The Stix swindle also generated some civil litigation. The trustee in bankruptcy for Stix brought a civil suit against Janice to recover the diverted funds. On June 26, 1984, the United States District Court for the Eastern District of Missouri entered a judgment against Janice in favor of Stix for $23,764,288.67. The Missouri district court also ordered Janice to turn over all assets in her custody which were purchased with funds diverted from Stix.

The Brimberrys got into trouble with the IRS because they failed to declare the millions of dollars they diverted from Stix on their joint income tax return. For the taxable years 1975 through 1981, deficiencies in income taxes of over $7 million were assessed against the Brimberrys. With penalties and interest, the Brimberry's total tax liability was over $19 million.

In October 1987, the IRS began an enforcement action against Janice Brimberry to collect the tax deficiency. On November 12, 1987, Janice and her accountant, Nathan Stein, met with an IRS officer, and Janice provided information regarding her assets and liabilities for IRS Form 433A, Collection Information Statement for Individuals, and for IRS Form 433B, Collection Information Statement for Businesses. The forms asked for information on all assets from which the tax deficiency could be paid. Janice represented that she was living with her mother, she depended on her mother for necessary living expenses, she owned no real property, and had no property that could be used to collect the tax. Janice signed the forms under penalties of perjury.

In February 1988, the IRS learned through a confidential informant that Janice Brimberry was trying to sell a four carat, heart-shaped diamond for $20,000 to $25,000. The IRS opened a criminal investigation of Janice and set up a sting operation. The confidential informant agreed to introduce Janice to an IRS undercover agent who would pose as a potential buyer of the jewelry. After a series of monitored telephone calls and meetings between Janice and the confidential informant, the informant agreed to arrange for a buyer of the jewelry to meet with Janice on March 4, 1988. On March 4, 1988, at the Collinsville, Illinois Hilton, in front of a rolling video camera, Janice sold the heart-shaped diamond and another, two carat diamond to the undercover IRS agent for $36,000. The IRS agent gave Janice $35,000 cash and arranged to deliver the remaining $1,000 at a later time.

IRS agents detained Janice as she was leaving the hotel room and seized the two diamonds and the $35,000. They also seized a diamond cocktail ring and a woman's 18 carat gold Rolex Presidential watch which Janice was wearing. The agents asked Janice whether she had any additional jewelry. She initially said no; but, after being informed that the IRS would seek a search warrant, Janice admitted that she had additional jewelry hidden behind a television in the basement of her home. Additional jewelry was seized during a later consensual search of Janice's home. The total value of the jewelry seized from Janice was over $69,000. Janice admitted that she had the jewelry in November, 1987 when she signed the Collection Information Statements.

Further investigation also revealed that she had purchased a house in July of 1987 for $42,000. The loan for the house was in the name of Sandra Harper, Janice's friend; but Janice provided the $7,000 for the down payment and $1,400 in closing costs from her son's trust account. Janice then "leased" the house from Sandra Harper for $441 a month, the amount of the mortgage payment. Janice paid the mortgage company directly, paid all the property taxes and insurance premiums, and received $250 a month rental income from an apartment on the property. Sandra Harper testified that no money for the house came out of her pocket and that Janice would receive all profits if the house was sold.

On December 22, 1988, a two-count indictment was filed against Janice Brimberry. Count 1 charged Janice with willfully and knowingly making and subscribing a false IRS collection information statement, in violation of 26 U.S.C. § 7206(1), by failing to reveal assets. Count 2 charged Janice with attempted evasion of payment of $19 million in income taxes, penalties and interest previously assessed against her for the years 1975 through 1981 in violation of 26 U.S.C. § 7201. On September 12, 1990, after a six-day trial, a jury found Janice guilty on both counts. The district court, pursuant to the Sentencing Guidelines, sentenced Janice to 33 months imprisonment and two years supervised release on each count, to run concurrently. Janice appeals both her conviction and sentence.

II. Analysis

A. Waiver of Right to Testify

Janice Brimberry did not testify at trial, and she never asserted her right to testify in the district court. On appeal, Janice argues that the district court had an affirmative duty to determine whether her decision to remain silent was knowing and intelligent. Janice does not allege that she did not know she could testify, that she wanted to testify, or that her attorney prevented her from testifying. The record shows that this was not the case. ¹ Rather, she simply contends that it was reversible error for the district court not to hold a sua sponte hearing to determine if her waiver was knowing and intelligent.

Janice's argument has already been rejected by this court. See United States v. Thompson, 944 F.2d 1331, 1345 (7th Cir.1991), cert. denied, --- U.S. ----, 112 S.Ct. 1177, 117 L.Ed.2d 422 (1992); United States v. Campione, 942 F.2d 429, 438-39 (7th Cir.1991); Ortega v. O'Leary, 843 F.2d 258, 261 (7th Cir.), cert. denied, 488 U.S. 841, 109 S.Ct. 110, 102 L.Ed.2d 85 (1988). Like Janice, the defendant in Thompson did not testify or attempt to testify at trial; but, on appeal, he claimed that the district court should have affirmatively inquired about his decision not to take the stand. Thompson, 944 F.2d at 1345. The court rejected this argument holding that "courts have no affirmative duty to determine whether a defendant's silence is the result of a knowing and voluntary decision not to testify." Id. The other circuit courts reaching this question agree. See United States v. McMeans, 927 F.2d 162, 163 (4th Cir.1991); United States v. Martinez, 883 F.2d 750, 760 (9th Cir.1989), vacated on other...