U.S. v. Wilson

• Decision Date: 16 October 1989
• Docket Number: No. 88-2733,88-2733
• Citation: 887 F.2d 69
• Parties: -5863, 89-2 USTC P 9611 UNITED STATES of America, Plaintiff-Appellee, v. Clyde E. WILSON, and Stuart Van Eman, Defendants-Appellants.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 69

887 F.2d 69

64 A.F.T.R.2d 89-5863, 89-2 USTC P 9611

UNITED STATES of America, Plaintiff-Appellee, v. Clyde E. WILSON, and Stuart Van Eman, Defendants-Appellants.

No. 88-2733.

United States Court of Appeals Fifth Circuit.

Oct. 16, 1989.

David Berg, Cheri Duncan, Houston, Tex., for Van Eman.

George J. Parnham, W. Troy McKinney, Houston, Tex., for Wilson.

Evan M. Spangler, Paula C. Offenhauser, Asst. U.S. Attys., Henry K. Oncken, U.S. Atty., Houston, Tex., for U.S.

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

Before BROWN, REAVLEY and HIGGINBOTHAM, Circuit Judges.

REAVLEY, Circuit Judge:

Appellants Stuart C. Van Eman and Clyde E. Wilson were both convicted of two counts of filing false personal income tax returns and one count of filing a false corporate income tax return in violation of 26 U.S.C. Sec. 7206(1). Appellants were also convicted of conspiracy to file false income tax returns in violation of 18 U.S.C. Sec. 371. On this appeal, Van Eman and Wilson challenge the sufficiency of the evidence and assert that the trial judge erred in instructing the jury. We affirm.

I.

In March of 1980, Van Eman and Wilson formed Sabine Refining and Trading Co., Inc. ("Sabine"), a corporation that was to engage in the business of "buying, selling, refining and trading of oil and its products." Wilson served as Sabine's president, Van Eman served as its treasurer, and each was a fifty percent shareholder in the corporation.

On July 21, 1986, Sabine opened a checking account with the Abilene National Bank (ANB) and made an initial deposit of $1,168,874. This initial deposit was received in the form of a wire transfer from Basin, Inc. ("Basin") to Sabine. Over the next thirteen months, Sabine received five additional wire transfers from Basin. The date and amount of each transfer was as follows:

                       Date            Amount
                July 21, 1980       $1,168,874.00
                July 22, 1980          714,082.50
                August 6, 1980          57,000.00
                August 20, 1980        286,469.52
                September 26, 1980     509,979.45
                August 25, 1981        358,525.37
                

Testimony at trial indicated that these transfers were made as payment for oil that Sabine sold to Basin. The transfers appear to be the only deposits made into the Sabine ANB account between July 21, 1980 and August 31, 1981.

At various points during this thirteen month period, usually soon after the wire transfers were received from Basin, wire transfers were made from the Sabine ANB account to the personal checking accounts of Van Eman and Wilson. Wilson approved the transfers in each case. The date, amount, and recipient of these transfers were as follows:

Van Eman and Wilson also wrote checks to themselves from another Sabine checking account at Texas Commerce Bank-Westwood. These payments were all made in 1980 and totaled $87,500 for both men.

Van Eman's 1980 tax return reflected income of $157,711. This total consisted of $40,000 in wages ($37,500 from Sector Refining, Inc. and $2,500 from Clinton Manges Oil & Refining Co.), $575 in interest income, $3,589 in capital gains, $26,047 in partnership and royalty income, and $87,500 in other income. On the Schedule C attachment to Van Eman's return, the $87,500 is described as consulting fees. The return does not mention the $475,000 in wire transfers from the Sabine ANB account that were made in 1980.

Van Eman's 1981 tax return reflected income of $62,323. This total consisted of $23,760 in capital gains and $38,563 in partnership and royalty income. The return does not mention the August 25, 1981 wire transfer of $150,000 from the Sabine ANB account. Van Eman signed both his 1980 and 1981 returns, but they were prepared by a professional tax preparer.

Wilson's 1980 tax return reflected income of $139,307. This total consisted of $45,000 in wages from Sector Refining Inc., $637 interest income, $93,668 in business income (which included $87,500 less deductions in consulting fees from Sabine), and $2 in other income. The return does not mention the $475,000 in wire transfers from the Sabine ANB account that were made in 1980.

Wilson's 1981 tax return reflected income of $8,734. This total consisted of $99 in interest income, $8,083 in business income, and $552 in capital gains. The return does not mention the August 25, 1981 wire transfer of $150,000 from the Sabine ANB account. Wilson signed both his 1980 and 1981 returns, but they were prepared by a professional tax preparer.

Sabine's tax return for the tax year ending March 31, 1982 reflected gross receipts of $300,000. The return does not mention the August 25, 1981 wire transfer of $358,525.37 from Basin. The return also does not list the August 25, 1981 transfers of $150,000 to Van Eman and Wilson as compensation of officers. The return was signed by Wilson as president of Sabine.

Based on this evidence, the jury concluded that Van Eman and Wilson filed false individual income tax returns for the 1980 and 1981 tax years, that they filed a false corporate tax return on behalf of Sabine for the tax year ending March 31, 1982, and that they conspired to file false tax returns.

II.

Van Eman and Wilson challenge the sufficiency of the evidence supporting both the false filing and conspiracy counts. In evaluating appellants' challenge, we "consider the evidence in the light most favorable to the government, with all reasonable inferences and credibility choices made in support of the jury's verdict. The evidence is sufficient if a rational trier of fact could have found the essential elements of the crime beyond a reasonable doubt." United States v. Yamin, 868 F.2d 130, 133 (5th Cir.) (footnote omitted), cert. denied, --- U.S. ----, 109 S.Ct. 3258, 106 L.Ed.2d 603 (1989).

A. The False Filing Counts

In order to obtain a conviction for a violation of Sec. 7206(1), ² the government was required to show that Van Eman and Wilson willfully made and subscribed to the returns, that the returns contained a written declaration that they were made under penalties of perjury, and that Van Eman and Wilson did not believe the returns to be true as to every material matter. See United States v. Taylor, 574 F.2d 232, 234 (5th Cir.), cert. denied, 439 U.S. 893, 99 S.Ct. 251, 58 L.Ed.2d 239 (1978).

Initially, appellants assert that there is no direct evidence to establish their identities as the ones who subscribed to the returns. The challenge must fail. "The fact that an individual's name is signed to a return, statement, or other document shall be prima facie evidence for all purposes that the return, statement, or other document was actually signed by him." 26 U.S.C. Sec. 6064. Appellants made no effort to rebut this presumption. The subscription element is satisfied. See United States v. Carrodeguas, 747 F.2d 1390, 1396 (11th Cir.1984), cert. denied, 474 U.S. 816, 106 S.Ct. 60, 88 L.Ed.2d 49 (1985).

Appellants also challenge the evidence as being insufficient to demonstrate that they acted willfully and with the belief that the returns were false. We disagree. With regard to the corporate return for the tax year ending March 31, 1982, the government demonstrated that Basin made a wire transfer of $358,525.37 to Sabine as payment for oil. The government also presented evidence that transfers totaling $300,000 were made from the Sabine ANB account to Van Eman and Wilson. The corporate return reflected gross receipts of $300,000 for the year and made no mention of the transfers to appellants. Indeed, the return indicated expenditures of $245,287 for cost of goods sold, a figure completely incompatible with the $300,000 in transfers. This evidence was clearly sufficient for a reasonable jury to conclude that Wilson willfully subscribed to a false income tax return. Van Eman did not sign the return, and there is no evidence that he participated in its preparation. Nevertheless, because we conclude there is sufficient evidence from which a jury could find that there existed a conspiracy and that the corporate return was filed in furtherance of that conspiracy, we sustain Van Eman's conviction for filing a false corporate income tax return. See Pinkerton v. United States, 328 U.S. 640, 645-47, 66 S.Ct. 1180, 1183-84, 90 L.Ed. 1489 (1946). The jury reasonably could conclude that the false corporate return was filed to avoid any evidence of the transfers to appellants.

With regard to the individual returns, the government presented evidence that in 1980 both appellants received transfers of $475,000 in corporate funds that went unreported on their individual tax returns. The government presented evidence that in 1981 both appellants received a transfer of $150,000 in corporate funds that went unreported on their individual tax returns. This evidence in itself is sufficient for a jury to conclude that Van Eman and Wilson filed false income tax returns. See United States v. Thetford, 676 F.2d 170, 175 (5th Cir.1982), cert. denied, 459 U.S. 1148, 103 S.Ct. 790, 74 L.Ed.2d 996 (1983); United States v. Miller, 545 F.2d 1204, 1215 & n. 13 (9th Cir.1976), cert. denied, 430 U.S. 930, 97 S.Ct. 1549, 51 L.Ed.2d 774 (1977).

Appellants argue that the government never demonstrated that these transfers were reportable income or were spent on other than corporate purposes. These arguments misapprehend the required proof. The government does not bear the burden of demonstrating how the funds were spent. See Thetford, 676 F.2d at 175. "Once a taxpayer has taken control of funds diverted from a corporation and then fails to report such funds as income or to make any adjustment in the corporate books to reflect a return of capital, that is sufficient to imply willful intent" to file a false return. Id. In the present case, the Sabine tax returns for the years in which the transfers were made do not reflect that these transfers even took place, much less that they were loans or returns of capital. On this record, the jury was entitled to conclude that the transfers...