U.S. v. Mehta

• Decision Date: 05 February 2010
• Docket Number: No. 08-4489.,08-4489.
• Citation: 594 F.3d 277
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. Jiten D. MEHTA, Defendant-Appellant.
• Court: U.S. Court of Appeals — Fourth Circuit

594 F.3d 277

UNITED STATES of America, Plaintiff-Appellee, v. Jiten D. MEHTA, Defendant-Appellant.

No. 08-4489.

United States Court of Appeals, Fourth Circuit.

Argued: October 30, 2009.

Decided: February 5, 2010.

ARGUED: David Schertler, Schertler & Onorato, LLP, Washington, D.C., for Appellant. David Ira Salem, Office of the United States Attorney, Greenbelt, Maryland, for Appellee. ON BRIEF: Lisa A. Fishberg, Schertler & Onorato, LLP, Washington, D.C., for Appellant. Rod J. Rosenstein, United States Attorney, Baltimore, Maryland, for Appellee.

Before GREGORY, SHEDD, and DUNCAN, Circuit Judges.

Affirmed by published opinion. Judge SHEDD wrote Parts I and II.A. of the opinion, in which Judge GREGORY and Judge DUNCAN concurred. Judge DUNCAN wrote Part II.B. of the opinion, in which Judge GREGORY concurred. Judge SHEDD wrote separately on Part II.B. and concurred in the judgment.

OPINION

SHEDD, Circuit Judge:

Jiten Mehta appeals his conviction and sentence for 16 counts of aiding and assisting in the preparation of false tax returns in violation of 26 U.S.C. § 7206(2) and 17 counts of wire fraud in violation of 18 U.S.C. § 1343. Mehta contends that the district court erred in (1) denying his motion for judgment of acquittal on the wire fraud counts; (2) denying his motion for a subpoena under Federal Rules of Criminal Procedure 17(c); and (3) calculating the tax loss by extrapolating from a non-random sample of audited returns to determine his offense level under U.S. Sentencing Guidelines Manual § 2T1.4(a). For the following reasons, we reject these contentions and affirm.

I.

We first consider the district court's denial of Mehta's motion for judgment of acquittal on the wire fraud counts. See Fed.R.Crim.P. 29. Mehta argues that there was insufficient evidence of wire fraud to support the verdict. We review a district court's denial of a motion for judgment of acquittal de novo. United States v. Gray, 405 F.3d 227, 237 (4th Cir.2005). We will uphold the verdict if it is supported by substantial evidence. United States v. Alerre, 430 F.3d 681, 693 (4th Cir.2005). Substantial evidence is evidence that a reasonable fact-finder could accept as adequate and sufficient to establish a defendant's guilt beyond a reasonable doubt. Id.

Because Mehta appeals his conviction, we view the facts in the light most favorable to the government. See United States v. Quinn, 359 F.3d 666, 670 (4th Cir.2004). The evidence at trial tended to establish that Mehta was a tax preparer who served many immigrant clients in Maryland through his company, JDM World Financial Services Group, Ltd. (collectively, "Mehta"). When a taxpayer came to Mehta, he would have the taxpayer complete a worksheet disclosing expense information that he would then use to determine if the taxpayer would be eligible to file a Schedule A, which lists itemized deductions claimed on the tax return. Mehta personally interviewed taxpayers who appeared to qualify for filing Schedule A returns, but he did not ask detailed questions in order to determine how to accurately report itemized deductions. Six taxpayers testified to the events, and their testimony established that many of the Schedule A returns Mehta filed did not correspond to the information they provided. Moreover, although the taxpayers' circumstances varied, their filed returns contained deductions that were similar. For example, Mehta repeatedly fabricated or exaggerated deductions, often in similar amounts, in the categories of unreimbursed business expenses, medical expenses, charitable contributions, and miscellaneous deductions. He would also use similar descriptions in many of the returns such as "shoes, socks, boots, gloves, ... uniform, [and] dry cleaning." J.A. 1437. Two undercover IRS agents testified that they had comparable experiences to that of the taxpayers who testified. The loss amount proved at trial by the taxpayers' testimony and other evidence concerning tax returns filed by Mehta was $42,614.

Mehta participated in the Refund Anticipation Loan ("RAL") program that allows a taxpayer to obtain an advance on his refund through the tax preparer. Under the RAL program, Mehta would submit a taxpayer return to the IRS and to BankOne, the participating bank, by using Drake Software, an electronic transmitter. BankOne would then send electronic authorization to Mehta, permitting him to issue a check to the taxpayer. Once it was processed, the actual refund was sent by the IRS to BankOne to cover the "loan" made to the taxpayer through Mehta. BankOne electronically transmitted Mehta's fees from each transaction through Drake Software to Mehta's bank account in Maryland. Shirley Carter, an employee of Chase Bank (formerly, BankOne), testified that Drake Software is located in North Carolina and that Mehta's use of Drake Software was necessary for his participation in the RAL program. Additionally, Mehta stipulated that, as part of the RAL process, "electronic returns would travel through interstate wires from Mehta's offices in [Maryland], through Drake in North Carolina, to IRS Service Centers outside the state of Maryland." J.A. 143.

To obtain a conviction for wire fraud under 18 U.S.C. § 1343, the government must prove that (1) Mehta knowingly and willfully participated in a scheme to defraud and (2) used interstate wire communications in furtherance of such a scheme. United States v. Curry, 461 F.3d 452, 457 (4th Cir.2006). Ms. Carter's testimony and Mehta's stipulation, at minimum, established that Mehta, located in Maryland, used interstate wire transmissions to communicate with Drake Software in North Carolina regarding the fraudulently prepared tax returns, tax refunds, and check authorizations. Therefore, this evidence was sufficient to prove that the information was transmitted by interstate wire communication in furtherance of a scheme to defraud, thus satisfying each element of the offense. See § 1343.

Mehta also contends that a variance between the indictment and proof at trial required the district court to grant his motion for judgment of acquittal. Where the evidence at trial proves facts materially different from those alleged in the indictment, "[c]onvictions generally have been sustained as long as the proof upon which they are based corresponds to an offense that was clearly set out in the indictment." United States v. Miller, 471 U.S. 130, 136, 105 S.Ct. 1811, 85 L.Ed.2d 99 (1985). A variance between the indictment and the proof at trial does not require reversal or dismissal of those charges unless it affected the substantial rights of the defendant and thereby resulted in actual prejudice. United States v. Kennedy, 32 F.3d 876, 883 (4th Cir.1994). Prejudice may result if the variance surprises the defendant at trial and thereby hinders his ability to prepare for his defense or if the variance exposes the defendant to a risk of a second prosecution for the same offense. United States v. Fletcher, 74 F.3d 49, 53 (4th Cir.1996). Other courts have found that the type of variance before us here is not prejudicial. See United States v. Dupre, 462 F.3d 131, 140-43 (2d Cir.2006) (affirming the conviction where the indictment alleged a wire transfer between two states which differed from the transfer proved at trial); United States v. Ratliff-White, 493 F.3d 812, 822 (7th Cir.2007) (affirming the conviction despite a variance between the indictment and the proof at trial regarding a particular step in the payment process).

The indictment charged Mehta with "knowingly caus[ing] to be transmitted in interstate commerce by means of wire communications certain ... wire transfers relating to client fees from BankOne, Belleville, Michigan to [Mehta's] business account at Wachovia Bank, Takoma Park, Maryland." J.A. 20. At trial, rather than proving that the wire transmissions originated in Michigan, the government proved that the tax returns were processed through Drake Software, located in North Carolina.

The variance here did not prejudice Mehta. There is nothing in the record that indicates that Mehta would have prepared differently for his defense if the indictment had charged that the wire communication was between North Carolina and Maryland rather than Michigan and Maryland. Despite the variance, the evidence at trial proved the same scheme to defraud using the RAL program as that described in the indictment. Therefore, we affirm the convictions for wire fraud.¹

II.

Next, we consider whether the district court erred in calculating the tax loss for sentencing purposes. Under the Guidelines, Mehta's base offense level is determined by the amount of tax loss² attributable to this offense. U.S.S.G. § 2T1.4(a)(1). In considering the district court's application of the Sentencing Guidelines, we review factual findings for clear error and legal conclusions de novo. United States v. Allen, 446 F.3d 522, 527 (4th Cir.2006). Generally, the district court's calculation of the amount of loss for sentencing purposes is a factual finding reviewed for clear error. See United States v. Loayza, 107 F.3d 257, 265 (4th Cir.1997).

In establishing the tax loss under § 2T1.1 of the Sentencing Guidelines, the government proposed that the district court consider the 4,321 Schedule A returns filed by Mehta over the four-year period under investigation to find a tax loss of $2,508,000. The IRS had selected approximately 941 returns for civil audit by scoring each of the Schedule A returns and choosing those most likely to produce additional tax liability. Of these 941, 775 were selected for a correspondence audit, and the remaining returns were accepted as filed. As part of the correspondence audit, the IRS furnished the taxpayers with a computation of what their additional tax liability would be if they did not produce documentation. Approximately 30% of the taxpayers (or 307 returns) signed IRS Form 4549 agreeing to pay the additional tax assessment. The total additional tax...