U.S. v. Pritchett

• Decision Date: 09 August 1990
• Docket Number: No. 89-7068,89-7068
• Citation: 908 F.2d 816
• Parties: -5609, 90-2 USTC P 50,444 UNITED STATES of America, Plaintiff-Appellee, v. Douglas Mark PRITCHETT, Phillip Doyle Boothe, David E. Pritchett, Joseph C. Pritchett, Rhonda Pritchett (Reinstated), Defendants-Appellants.
• Court: U.S. Court of Appeals — Eleventh Circuit

Page 816

908 F.2d 816

66 A.F.T.R.2d 90-5609, 90-2 USTC P 50,444

UNITED STATES of America, Plaintiff-Appellee, v. Douglas Mark PRITCHETT, Phillip Doyle Boothe, David E.

Pritchett, Joseph C. Pritchett, Rhonda Pritchett

(Reinstated), Defendants-Appellants.

No. 89-7068.

United States Court of Appeals, Eleventh Circuit.

Aug. 9, 1990.

M.A. Marsal, Mobile, Ala., for Douglas M. Pritchett.

Arthur J. Madden, III, Madden & Soto, Mobile, Ala., for Boothe.

J. Stephen Salter, Birmingham, Ala., for David E. Pritchett.

Thomas J. Spina, Hartman, Fawal & Spina, Birmingham, Ala., for Rhonda Pritchett.

Joseph M. Powers, Mobile, Ala., for Joseph C. Pritchett.

Gloria Bedwell, Asst. U.S. Atty., Mobile, Ala., for U.S.

Appeals from the United States District Court for the Southern District of Alabama.

Before CLARK and EDMONDSON, Circuit Judges, and RUBIN ^*, Senior Circuit Judge.

CLARK, Circuit Judge:

This case involves appeals by five co-defendants who were convicted of conspiring to possess with the intent to distribute cocaine, in violation of 21 U.S.C. Secs. 841(a), 846, and conspiring to evade federal income taxes, in violation of 26 U.S.C. Sec. 7201. We affirm the convictions of the four co-defendants convicted of conspiracy to distribute cocaine, but reverse the conviction of the two co-defendants charged with conspiring to evade federal income taxes.

BACKGROUND

The evidence presented at trial indicates that defendant Joe Pritchett and his brother, defendant David Pritchett, were involved in distributing significant amounts of cocaine between 1980 and 1987. David's wife, defendant Rhonda Pritchett, and David's and Joe's nephew, defendant Phillip Boothe, also participated in the cocaine distribution, but Joe was clearly the driving force behind the operation. He decided when and how much cocaine would be purchased, and he controlled the profits. David, Rhonda and Phillip participated by delivering cocaine to buyers, hiding cocaine in their homes, and accompanying Joe on trips to Miami, Florida to purchase cocaine. One other member of the conspiracy, Tom Cook, apparently lived in south Florida, but appeared at Joe's house in Mobile, Alabama occasionally, and assisted Joe in purchasing and distributing cocaine.

In 1983, Joe moved from Tuscaloosa, Alabama to Mobile, Alabama. Both Joe and David purchased houses in Mobile with large amounts of cash, and had title to the houses put in the name of Joe's son, defendant Mark Pritchett. Joe, David and Mark also became involved in several legitimate businesses in Mobile. Joe lent $100,000 in cash to Stan Johnson, the owner of Beltline Auto Brokers, a used-car lot. When Stan became unable to repay the $100,000 loan, Joe agreed to cancel the debt by accepting two parcels of land from Stan, and by taking over another of Stan's businesses, an Ugly Duckling car rental franchise. Mark participated in the purchase of the Ugly Duckling franchise, and took over its operations. Joe and Mark also went into business with Mike Sheffield, the owner of Mobile Towing, a wrecker service. Before he took over the Ugly Duckling franchise, Mark worked as a dispatcher for Mobile Towing and then as a wrecker driver. David and Phillip also worked for Mobile Towing in various capacities.

Between 1983 and 1987, Joe invested hundreds of thousands of dollars, all in cash, in trucks, cars and motorcycles. Title to these vehicles were put in the name of Beltline Auto Brokers, Mobile Towing or Co-Op Leasing, a corporation set up by Joe and Mark to lease equipment to Mobile Towing. During this time, Joe did not file personal income tax returns. Basing its calculations on his expenditures, the The government brought a superseding indictment against the five appellants and Tom Cook ² in July, 1988. Count One charges Joe, David, Rhonda and Phillip with conspiracy to distribute more than five kilograms of cocaine. Counts Two and Three charge Joe and David with substantive counts of possession with intent to distribute cocaine. Count Four charges Joe, David and Mark with conspiracy to evade the payment of federal income taxes. Counts Five and Six charge Joe and David with fraudulently concealing two cash transactions involving more than $10,000 in violation of 18 U.S.C. Sec. 1001. Count Seven charges Joe with conducting a criminal enterprise involved in trafficking cocaine. Counts Eight and Nine are criminal forfeiture counts against Joe's and David's respective proceeds from drug trafficking.

government determined that between 1983 and 1986 Joe accrued personal income tax liability of over $160,000. During those same years, no corporate tax returns for the businesses were filed, but the government offered no proof as to any corporate income taxes owed by the businesses. ¹

David and Mark were initially tried in September, 1988. After the trial began Mark's attorney became ill, and the court granted his motion for severance. The jury reached a verdict on only one count of the superseding indictment as to David, finding him guilty on Count Four (conspiracy to evade taxes). In November, 1988 defendants David, Rhonda, Phillip and Mark were tried together. David was not re-tried on Count Four, but was retried on the other counts of the indictment in which he is named. The jury found David guilty on Counts One, Two, Three, Five and Six, and found for the government on the forfeiture count against David. The jury also found Rhonda and Phillip guilty on Count One (conspiracy to distribute cocaine) and Mark guilty on Count Four (conspiracy to evade taxes).

Joe was a fugitive until November 3, 1988, and eventually pleaded guilty to Counts Four (conspiracy to evade taxes) and Seven (conducting a criminal enterprise involved in trafficking cocaine). Joe was sentenced to five years imprisonment on Count Four, to be followed by four years of supervised release, and restitution of $229,467. He was sentenced to 25 years imprisonment on Count Seven, to run consecutively to the sentence imposed on Count Four.

DISCUSSION

A. Conspiracy to Evade Income Taxes

Defendants David Pritchett ³ and Mark Pritchett ⁴ argue that the evidence The evidence presented against Mark showed that he was aware that both Joe's and David's houses were titled in his name. Furthermore, he opened at least two safety deposit boxes in his name for Joe, and delivered and retrieved packages from those boxes for Joe. The evidence did not indicate what was in the packages, nor that Mark was aware of their contents. Mark was also aware that Joe paid cash for many of the vehicles and equipment used by Mobile Towing and other businesses run by Mark, Mike Sheffield and David, and that title to the vehicles was always put in the name of the businesses rather than in Joe's name.

                was insufficient to convict them of joining in a conspiracy to evade income taxes owed by Joe Pritchett.  In reviewing the sufficiency of the evidence, "[w]e must view the evidence in the light most favorable to the government, accepting all reasonable inferences which support the verdict, and affirm the conviction if a reasonable trier of fact could conclude that the evidence establishes guilt beyond a reasonable doubt."    United States v. Meester, 762 F.2d 867, 881 (11th Cir.)  (citations omitted), cert. denied sub nom.  Sawyer v. United States, 474 U.S. 1024, 106 S.Ct. 579, 88 L.Ed.2d 562 (1985).  Viewed in this manner, the evidence presented in the first trial against David on the tax count showed that David knew that Joe was earning income from selling cocaine, and that he knew that Joe contributed money toward the purchase of David and Rhonda's house, and various cars, trucks and motorcycles.  David was also aware that the title to the house was put in Mark Pritchett's name, and that title to the vehicles was put in the names of the businesses.  The evidence also showed that David did not file personal income tax returns for 1983 through 1986 until sometime in 1987
                

Thus, the evidence shows that David and Mark were aware that Joe purchased many large items with cash, and that he put title to these items either in the names of his children or in the names of the businesses. David's intimate involvement in the drug distribution operation run by Joe supports the conclusion that David was aware that the cash Joe was using to make these purchases was earned through contemporaneous drug sales. This evidence would allow a reasonable jury to conclude that David knew that Joe was hiding the source of his income, and that David knowingly participated in those efforts. The government did not charge Mark with involvement in the drug conspiracy, and the evidence did not show that Mark was aware that his father was earning large amounts of money from drug sales. Therefore, with respect to Mark, a reasonable jury could conclude that, although he was not aware of the source of the money Joe used, he was aware that Joe was hiding his ownership interests in many large items, and that he assisted Joe in those efforts.

None of this evidence, however, is sufficient to support a conviction against David or Mark for knowingly conspiring to evade income taxes owed by Joe. To support a conviction for conspiracy, the government must prove that the defendant knew of the conspiracy and with this knowledge voluntarily joined the conspiracy. Although the government need not prove the defendant knew all the details or phases of the conspiracy, it must show at a minimum that the defendant knew the essential nature of the conspiracy. United States v. Meester, 762 F.2d at 881. Thus, in the present case, the government must prove that David and Mark knew that by conducting his financial affairs in cash and by hiding his ownership interests in the assets he purchased (including the safe deposit boxes opened by Mark), Joe intended to avoid paying income taxes. See United States v. Hernandez, 896 F.2d 513 (11th Cir.1990) (To prove conspiratorial intent, evidence of defendant's knowledge of the conspiracy and...