United States v. Berry, 043018 FED3, 16-3209

Docket Nº:16-3209
Opinion Judge:ROTH, Circuit Judge
Party Name:UNITED STATES OF AMERICA v. JUANITA L. BERRY, Appellant
Judge Panel:Before: AMBRO, JORDAN and ROTH, Circuit Judges
Case Date:April 30, 2018
Court:United States Courts of Appeals, Court of Appeals for the Third Circuit

UNITED STATES OF AMERICA

v.

JUANITA L. BERRY, Appellant

No. 16-3209

United States Court of Appeals, Third Circuit

April 30, 2018

NOT PRECEDENTIAL

Submitted under Third Circuit LAR 34.1(a) on March 21, 2017

Appeal from the United States District Court for the District of New Jersey (D.N.J. No. 3-13-cr-00769-001) District Judge: Honorable Peter G. Sheridan

Before: AMBRO, JORDAN and ROTH, Circuit Judges

OPINION [*]

ROTH, Circuit Judge

Juanita Berry appeals several rulings made by the District Court before, during, and after her trial and conviction for tax evasion and wire fraud. She also appeals the District Court's calculation of the losses incurred by her actions and its resultant effect on her sentence. For the reasons set forth below, we will affirm on all counts.

I.1

Berry formed J. Starr Communications, Inc., in 2003. That year, Berry filed personal and corporate tax returns, both of which reflected J. Starr's income. Berry failed, however, to fully satisfy her tax obligations, and the IRS periodically sent her reminders of her overdue taxes. In 2005, J. Starr signed a consulting services contract with the telecommunications service company, Telamon, for Berry to act first as a sales representative and later as a manager of Telamon's East Coast operations. In this capacity, Berry was responsible for overseeing field installation of new telecommunications parts and removal of old parts for AT&T, one of Telamon's clients. Berry would facilitate shipment of new parts and receipt of removed parts at a Telamon facility located in Dayton, New Jersey.

Berry suffered financial difficulties through this period, filing petitions for personal bankruptcy in 2006 and 2010. Both petitions were dismissed for numerous reasons, among which was Berry's failure to submit adequate income tax returns. In addition, ATM records demonstrate that she withdrew large sums of cash from the J. Starr account at various casinos.

Berry responded to these financial difficulties by directing workers at the Telamon facility in Dayton to sell new and used parts, without Telamon's knowledge or authorization, to West World Telecomm Corporation. West World logged each product received into its internal database. J. Starr shipped approximately 35, 000 products to West World and received over $3.5 million in payments; 672 of these were new products as opposed to removed equipment. West World twice prepaid J. Starr for these shipments, executing two documents, titled "promissory notes." Berry failed to report the income she received from these sales to West World on her tax returns in 2010 and 2011.

Berry was charged with four substantive counts of wire fraud and two counts of tax evasion in an indictment returned on September 22, 2015. In preparation for trial, the government moved in limine to introduce numerous documents from Berry's financial history, including (1) her tax returns from 2003, (2) the two bankruptcy petitions, filed in 2006 and 2010, (3) IRS records, demonstrating Berry's failure to file tax returns between 2004 and 2009, (4) tax returns, prepared by her accountant but never filed, for the years between 2004 and 2009, and (5) bank records showing that Berry made large withdrawals of cash from ATMs at various casinos. The District Court excluded the documents pertaining to Berry's failure to file tax returns from 2004 through 2009, but it admitted Berry's 2003 tax returns, Berry's bankruptcy petitions, and the bank records. Berry, in turn, challenged the government's attempts to introduce evidence from West World's internal database, arguing that such evidence was not properly admitted unless West World could provide forensic proof of the records' authenticity. The District Court admitted the evidence, finding that testimony from West World employees was sufficient to establish authenticity. Berry indicated her intent to challenge the authenticity of West World's records by introducing testimony from Anthony Brown, an expert in the common practices of the telecommunications industry.

Trial began on November 17, 2015. After the government rested its case, Berry began to call her witnesses, intending to call Brown at the end of her defense. However, because the trial took place during the week of Thanksgiving, the District Court excused the jury for five days, recommencing trial on November 30. On December 1, Berry requested a one-day continuance of the proceedings to secure Brown's attendance.2 The District Court denied the continuance on the grounds that Berry could not guarantee Brown's attendance on December 2 and that Berry had not proffered the substance of Brown's testimony. Berry thereafter rested. In charging the jury, the District Court did not instruct that as a matter of law the documents titled "promissory notes" were loans and thus not income for tax purposes, instead allowing the jury to decide the contested question.

Berry was convicted on all counts. In calculating Berry's sentence, the District Court relied on a presentence report which calculated the loss attributable to Berry's actions based on the $3, 510, 885 that West World paid to J. Starr.3 From this figure, the Probation Office subtracted $70, 000 to reflect telecommunications equipment that Berry herself had purchased to sell to West World. The new total of $3, 440, 885 resulted in a 16-level increase of her base offense level. Berry contested this determination, arguing that the loss amount should have been limited to the four wire transfers charged-totaling $32, 350. In the alternative, Berry argued that the loss amount should have been limited to the value of the new equipment, rather than including the removed equipment- totaling $558, 447. Rejecting both arguments, the District Court applied a 16-level increase to Berry's base offense level and sentenced Berry to 60 months' incarceration, three years of supervised release, a special assessment, and $3, 440, 885 in restitution. Berry appealed.

II.4

Berry raises five issues on appeal. First, she challenges the District Court's admission of her 2003 tax return, her bank records demonstrating cash withdrawals at casinos, and her dismissed bankruptcy petitions. Second, she argues that the District Court erred in admitting West World's records without requiring physical or forensic proof of authenticity. Third, she asserts that the District Court abused its discretion in denying her request for a one-day continuance to secure the attendance of Brown. Fourth, she protests that the District Court was under an obligation to sua sponte instruct the jury that the documents entitled "promissory notes" were loans, and not income.

Fifth, and finally, she argues that the District Court erred in relying on the loss amount in the presentence report. We address each contention in turn.

A.

We review a district court's admission of evidence for abuse of discretion, 5 and find none in the District Court's admission of documents related to Berry's financial history as evidence of motive, intent, or lack of accident pursuant to Rule 404(b) of the Federal Rules of Evidence. Berry asserts that her 2003 return was of no probative value and was unduly prejudicial insofar as it impermissibly suggested that she failed to file taxes from 2004 to 2009. We disagree; her 2003 return was clearly relevant to demonstrate her knowledge of her tax liabilities with respect to J. Starr, supporting a finding of willfulness.[6] Such evidence was appropriately admitted. Similarly, evidence of Berry's withdrawals at casinos was clearly relevant to demonstrating her motive to commit wire fraud and tax evasion insofar as it was probative of her financial circumstances.[7] While the jury may have inferred immorality from Berry's frequent gambling, any such prejudice did not "substantially outweigh" the probative value of such records; accordingly,...

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