U.S. v. Rosnow

• Decision Date: 25 November 1992
• Docket Number: Nos. 91-2945,s. 91-2945
• Citation: 977 F.2d 399
• Parties: -5930, 92-2 USTC P 50,506 UNITED STATES of America, Appellee, v. Eugene R. ROSNOW, Appellant. UNITED STATES of America, Appellee, v. Melford H. HAUGEN, Appellant. UNITED STATES of America, Appellee, v. Juanita M. DEWEY, Appellant. UNITED STATES of America, Appellee, v. David C. RODEWALD, Appellant. UNITED STATES of America, Appellee, v. Kermit H. RODEWALD, Appellant. UNITED STATES of America, Appellee, v. Wallace H. RODEWALD, Appellant. UNITED STATES of America, Appellee, v. Leland Frederick ERICKSON, Appellant. UNITED STATES of America, Appellee, v. Robert M. DICK, Appellant. UNITED STATES of America, Appellee, v. Harry E. CARLSON, Appellant. UNITED STATES of America, Appellee, v. Duane C. HANSEN, Appellant. UNITED STATES of America, Appellee, v. Roger Walter SANDS, Appellant. UNITED STATES of America, Appellee, v. Dennis W. SANDS, Appellant. UNITED STATES of America, Appellee, v. Jeffry R. MORSE, Appellant. UNITED STATES of America, Appellee, v. George A. YANT, Appellant. UNITED STATES of America, Appellee, v. Karl H. PETERS, Appellant. to 91-2948, 91-2952, 91-2956, 91-2957, 91-2968, 91-2978 to 91-2981 and 91-2984 to 91-2986.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 399

977 F.2d 399

70 A.F.T.R.2d 92-5930, 92-2 USTC P 50,506

UNITED STATES of America, Appellee, v. Eugene R. ROSNOW, Appellant.

UNITED STATES of America, Appellee, v. Melford H. HAUGEN, Appellant.

UNITED STATES of America, Appellee, v. Juanita M. DEWEY, Appellant.

UNITED STATES of America, Appellee, v. David C. RODEWALD, Appellant.

UNITED STATES of America, Appellee, v. Kermit H. RODEWALD, Appellant.

UNITED STATES of America, Appellee, v. Wallace H. RODEWALD, Appellant.

UNITED STATES of America, Appellee, v. Leland Frederick ERICKSON, Appellant.

UNITED STATES of America, Appellee, v. Robert M. DICK, Appellant.

UNITED STATES of America, Appellee, v. Harry E. CARLSON, Appellant.

UNITED STATES of America, Appellee, v. Duane C. HANSEN, Appellant.

UNITED STATES of America, Appellee, v. Roger Walter SANDS, Appellant.

UNITED STATES of America, Appellee, v. Dennis W. SANDS, Appellant.

UNITED STATES of America, Appellee, v. Jeffry R. MORSE, Appellant.

UNITED STATES of America, Appellee, v. George A. YANT, Appellant.

UNITED STATES of America, Appellee, v. Karl H. PETERS, Appellant.

Nos. 91-2945 to 91-2948, 91-2952, 91-2956, 91-2957, 91-2968,

91-2978 to 91-2981 and 91-2984 to 91-2986.

United States Court of Appeals Eighth Circuit.

Submitted March 9, 1992.

Decided Oct. 1, 1992.

Rehearing and Rehearing En Banc

Denied Nov. 25, 1992. ^*

Whitney Edward Tarutis, Bemidji, Minn., for appellants Rosnow, Erickson, Hansen and Yant.

Jonathan E. Fruchtman, Minneapolis, Minn., for appellant Haugen.

Virginia Villa, Minneapolis, Minn., for appellant Dewey.

Arthur R. Martinez, Minneapolis, Minn., for appellant D. Rodewald.

Thomas M. Kelly, Minneapolis, Minn., for appellant K. Rodewald.

Lawrence E. Meirwissen, St. Paul, Minn., for appellant W. Rodewald.

Jerome Helfand, St. Paul, Minn., for appellant Dick.

Michael James Majeski, Minneapolis, Minn., for appellant Carlson.

Richard Paul Clem, Minneapolis, Minn., for appellants R. Sands, D. Sands and Peters.

Joseph E. Paiement, Minneapolis, Minn., for appellant Morse.

Jeffrey S. Paulsen, Minneapolis, Minn., for appellee.

Before McMILLIAN, Circuit Judge, LAY, Senior Circuit Judge, and VAN SICKLE, Senior District Judge.

PER CURIAM.

Several defendants ¹ challenge their convictions on thirty-four counts arising from conduct relating to filing false tax forms with the Internal Revenue Service (IRS). All of the defendants, with the exception of Robert Dick, were convicted of conspiracy to file false IRS forms. 18 U.S.C. § 371 (1988). The indictment stated the objectives of the conspiracy as follows: (1) to report false information to the IRS in order to cause tax problems for persons whom the defendants felt had wronged them; (2) to report false information to the IRS in order to obtain refunds; (3) to market a scheme designed to accomplish these objectives; (4) to use counterfeit certified sight drafts to obtain money from the IRS; and (5) to impede and corrupt the lawful functions of the IRS. Additionally, twelve of the defendants ² were convicted of the substantive charge of filing false tax forms 1096 or 1099 with the IRS. 26 U.S.C. § 7206(1) (1988). Dick, Dewey, Haugen and Yant were convicted under the same statute of submitting false forms 1040, requesting tax refunds. Carlson, Dewey, Erickson,

                Haugen, Rosnow, and Roger Sands were convicted of attempting to impede or obstruct an IRS investigation under 26 U.S.C. § 7212(a) (1988).   And Dewey was convicted of possession of counterfeit government obligations with the intent to defraud.  18 U.S.C. § 472 (1988).   The defendants present several diverse claims on appeal.   After an extensive review of the record, we reverse the conspiracy convictions of all defendants.   We affirm all other convictions
                

BACKGROUND

IRS form 1099 is an informational form used to report to the IRS income or other compensation paid to a non-employee, such as a sub-contractor. The information contained in forms 1099 may be communicated to the IRS through the use of a single summary and transmittal form 1096. The defendants allegedly filed these forms in an effort to cause tax problems for individuals involved in repossessing real estate and other property belonging to defendants following the latter's default on various loans. The victims included creditors, attorneys, judges, sheriffs, law enforcement officials and IRS agents. Frequently, the defendants would mail copies of the forms 1099 to the individuals referenced on the forms as well as the IRS. Except for Juanita Dewey, each of the defendants charged with filing false forms 1096 or 1099 with the IRS submitted forms claiming to have paid out more than $4 million to the above described individuals. For example, George Yant filed four forms 1099 in the total amount of $28 million; Eugene Rosnow filed 103 forms 1099 totalling over $187 million; and Harry Carlson filed thirteen forms totalling over $86 million. Typically, a defendant would send an individual fictitious bills prior to filing the false forms; the logic being that the unpaid debt is essentially the same as income received to the referenced individual, and that the individual should therefore be required to pay income tax on the amount reported.

Most of the defendants are relatively uneducated farmers residing in the same geographic region in northwest Minnesota. It is a point of contention as to how they first became involved in this scheme. The plan was created by unindicted co-conspirators Roger Elvick, Natalie Telemaque and Ron Knutt, who are acquainted with Juanita Dewey. Several defendants indicated that they learned of the scheme through a book published by Elvick entitled "The Redemption Package." ³ Others claim to have learned of the scheme through various newspaper and magazine articles. Elvick, Telemaque and Knutt were convicted in a separate trial in North Dakota. ⁴ As indicated above, the defendants apparently sought a measure of revenge against those individuals who they believed had committed wrongs against them. As a result of the filings, some of the victims received audit letters from the IRS, and some incurred attorney's fees. ⁵ Additionally, the IRS found it necessary to instigate new manual procedures and hire new employees to check the veracity of the incoming forms. ⁶

IRS officials first became suspicious of the defendants' actions after noticing that an inordinate number of forms stated "request In March of 1990, law enforcement officers executed search warrants for the residences of six of the defendants who were thought to have sent false forms. At the condominium shared by Juanita Dewey and Melford Haugen, located in Detroit Lakes, Minnesota, a two and one-half hour search yielded a calendar indicating Dewey's acquaintance with several other defendants, correspondence between Dewey and several defendants, IRS forms, court transcripts pertaining to lawsuits of various defendants and blank counterfeit sight drafts allegedly payable out of the United States Treasury. At the Carlson farmhouse located in rural Becker, Minnesota, amongst hundreds of files unrelated to this case, investigators discovered six files each labelled with a defendant's name containing past due statements, tax forms, letters from attorneys and court documents. Apparently as a result of these searches, Carlson, Rosnow and Erickson requested the social security numbers of some of the investigators involved in the search and Dewey and Haugen filed false currency transaction reports (CTR's) ⁹ and meritless federal tort claims against the investigators. Because of these actions, the named defendants were charged with attempted obstruction of an IRS investigation.

                denied" in the space for the referenced individual's social security number. 7  Between February of 1989 and January of 1990, officials at the Kansas City IRS Service Center intercepted forms containing this notation and began forwarding these forms to the criminal investigation unit. 8  After checking the reported payments against the referenced individuals' reported income (usually reported in forms 1040), IRS officials discovered the amounts reported by defendants did not comport with the income reported by the individuals referred to on the forms.   A criminal investigation ensued and IRS officials came to believe that the payments or unpaid debts reported by defendants were fictitious
                

The case proceeded to trial on March 1, 1991. At the close of the government's case, the defendants moved for a judgment of acquittal on the conspiracy charge. The motion was denied. On April 8, 1991, the jury returned a verdict of guilty on all thirty-four counts of the indictment. The sentences imposed range from eleven to twenty-seven months of incarceration.

DISCUSSION

Conspiracy

We initially turn to the sole meritorious claim affecting most of the defendants. The defendants argue the government failed to prove the existence of the single overall conspiracy charged in the indictment.

The government argues that all of the defendants shared the common goal of harassing their perceived enemies through the use of fraudulent claims to the IRS and that mutual assistance and dependence existed. The government maintains that Juanita Dewey and Harry Carlson each headed up a core group of defendants and the two groups were linked through various cooperative efforts.

The evidence put forth at trial included the six files discovered at the Carlson residence labeled with the names of defendants Erickson, Hansen, David Rodewald, Kermit Rodewald, Wallace Rodewald and Rosnow. ¹⁰ The files contained various tax forms, including forms 1096 and 1040, past due bill statements and notices of bills currently due. At the Dewey-Haugen condominium, investigators found notes written on a calendar which referred to defendants Haugen, Yant, Peters, David Rodewald, Kermit Rodewald and unindicted co-conspirator Knutt. Investigators also discovered letters addressed to Dewey from Morse, Telemaque ¹¹ and...