United States v. Garcia

• Decision Date: 19 October 2018
• Docket Number: No. 14-11845,14-11845
• Citation: 906 F.3d 1255
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. Lourdes MARGARITA GARCIA, Defendant-Appellant.
• Court: U.S. Court of Appeals — Eleventh Circuit

906 F.3d 1255

UNITED STATES of America, Plaintiff-Appellee,

v.Lourdes MARGARITA GARCIA, Defendant-Appellant.

No. 14-11845

United States Court of Appeals, Eleventh Circuit.

October 19, 2018

Jonathan Colan, Kathleen Mary Salyer, Anne Ruth Schultz, Jose A. Bonau, Andy Ross Camacho, Wifredo A. Ferrer, Emily M. Smachetti, MIAMI, FL, for Plaintiff-Appellee.

Michael Caruso, Federal Public Defender, Federal Public Defender's Office, MIAMI, FL, for Defendant-Appellant.

Before MARCUS and WILSON, Circuit Judges, and GRAHAM, District Judge.^*

MARCUS, Circuit Judge:

This is a troubling case. There can be no doubt—and the government does not contest the point—that constitutional error occurred. It is also clear that the error was plain and obvious. The decision to allow the government to introduce inculpatory evidence while both the defendant and her lawyer were absent for three to ten minutes in a trial that lasted more than 49 hours violated the defendant's right to counsel, her right to confront the witnesses arrayed against her, and her right to be present at trial under both the Due Process Clause and Fed. R. Crim. P. 43. The only question is whether Garcia's convictions should be reversed on account of the error.

We hold that Garcia's convictions must be affirmed because the errors did not affect Garcia's substantial rights. There can be no question that Garcia failed to preserve the errors at trial even though she had ample opportunity to do so. She was given every chance to object and to secure some remedial relief from the trial court but expressly declined to act. As a consequence, under well-established law we must review the constitutional violations that occurred for plain error, not for harmlessness beyond a reasonable doubt. What's more, there is good reason in this case to be punctilious in selecting the proper standard of review. The prejudice analysis is by no means clear-cut and the standard by which we measure it could well make all the difference.

We also reject Garcia's other challenges to her convictions based on the sufficiency of the indictment and claimed errors in the jury instructions. The indictment was plainly adequate, and, to the extent that the district court may have erred in how it charged the jury, these errors did not prejudice Garcia's defense. Finally, we hold that Garcia has similarly failed to establish prejudice under the doctrine of cumulative error.

I.

A grand jury sitting in the Southern District of Florida indicted Lourdes Margarita Garcia for conspiring from 1997 to September 2008 with her husband Angel Garcia and others to defraud the United States by impeding the Internal Revenue Service (IRS) in the assessment and collection of federal income taxes, and to commit offenses against the United States by willfully making false personal income tax returns for 1997 and 2001-2007, all in violation of 18 U.S.C. § 371, (Count One). Garcia and her husband were also charged with three substantive counts of making and subscribing false personal income tax returns for tax years 1997, 2006, and 2007, in violation of 26 U.S.C. § 7206(1) (Counts Two, Three, and Four). Garcia's husband, Angel, died before the case was tried.

The evidence adduced at trial established that Garcia and her husband had long been active as healthcare providers in South Florida. Beginning in the early 1990s, the couple operated various medical clinics and diagnostic centers, which generated substantial income that they reported to the IRS through 1996. After business reversals and unsuccessful litigation in the Tax Court resulting in tax deficiencies for 1992 and 1994-1996, the Garcias filed for protection in bankruptcy court. Garcia continued to work as a physician's assistant in her medical clinics. She holds a medical degree that she obtained in the Dominican Republic—the country of her birth—and a physician's assistant license from the state of Florida. Sometime later, beginning in 2001, the Garcias began to operate Global Medical Group (Global), a new medical clinic based in Miami, first as a general partnership and then as a limited liability company. For federal income tax purposes, as a general partnership and then as a Subchapter S corporation, these were pass-through entities, the profits of which were passed through to the Garcias and reportable on their personal income tax returns.

The evidence undisputedly established that Global generated substantial income. In particular, it produced, at a minimum, $40,000 for 2001, $40,000 for 2002, $150,000 for 2003, $300,000 for 2004, $280,000 for 2005, and $1,986,882 for 2006. These figures were proven at trial through, among other things, the introduction of extensive documentary evidence, including Global's bank accounts and records reflecting the receipt of large sums of money from various health insurance companies and patients.

The evidence also established that very little of this income was reported on the Garcias' Form 1040 returns. Thus, for years 1997, 2001, 2002, 2003, 2004, and 2005 the Garcias reported no income. For 2006 they reported only $19,980 in taxable income, and for 2007 they reported $29,111.

Since Global was a Subchapter S corporation, not all of its gross income was passed through and includable on the Garcias' tax returns as personal income. Only its net profits were classed as personal income. To determine how much of Global's income was passed through to the Garcias, the IRS conducted an extensive examination of the monies flowing into and out of Global's five bank accounts. Going account by account and expenditure by expenditure, IRS investigators analyzed the transactions and characterized some of them as being personal in nature based on how the monies were expended. Trial exhibits, including elaborate schedules of these expenditures showed the amounts associated with each transaction, as well as, in some cases, who initiated the transaction. Moreover, IRS agents examined various checks drawn on Global's accounts and testified at trial that many of them were signed by Garcia or made out to cover expenses that benefited her and her family. These checks were also introduced in evidence.

Based, in part, on their analysis of personal expenditures drawn on Global's bank accounts, IRS investigators concluded that the Garcias' personal income for 2006 and 2007 was well above what they reported on their Form 1040 returns. For 2006, the investigators concluded that the Garcias had realized $403,309 in taxable income, yielding a tax due of $114,332. And their taxable income for 2007 was calculated as $452,779, with an additional tax due of $130,679. The United States also introduced bankruptcy filings the Garcias made in 1997 establishing that they had a taxable income of nearly $90,000 that year, even though their 1997 return reported no income.

The trial lasted some 10 days and included testimony taken from 26 witnesses and thousands of pages of documents. Of special importance for our purposes are the testimony of and exhibits introduced through Angela Arevalo, an IRS Revenue Agent who extensively investigated the Garcias' financial dealings. Arevalo was the 23rd and last witness called by the United States on the sixth day of trial. Among other things, she testified about and the court received in evidence Government Exhibit 6, a detailed schedule of expenditures prepared by the IRS summarizing the payment of money drawn on Global's bank accounts by and for the personal benefit of the Garcias in 2006 and 2007. Because Global was a pass-through entity, these personal expenditures should have been reported, the agent offered, as income on their personal returns. They were not reported in 2006 and 2007. Plainly, Exhibit 6 was an important piece of evidence establishing that the Garcias had underreported their taxable income and the taxes due and owing to the United States. Notably, the background information about Exhibit 6 was elicited on direct examination from Arevalo while Garcia and her counsel were present, shortly before the trial court recessed for lunch.

After lunch, however, the prosecution resumed its examination of Arevalo before the defense team had returned to the courtroom. During the course of this three to ten minute period—counsel having been absent for some three minutes and the defendant for as much as ten minutes—Arevalo highlighted ten specific expenditures contained in Exhibit Six. The expenditures consisted of a debit transaction for $832 paid to El Dorado Furniture; a check written by Lourdes Garcia and made payable to her niece Sally Landron in the amount of $9,550; a check for $9,310.50 made out to cash; another debit transaction for $2,500 payable to El Dorado Furniture; a check made out to Lourdes Garcia for $9,000; a debit card transaction for $464.71 payable to Macy's; a debit card transaction for $1,750 payable to Victory Racing Engines; a check payable to Angel Garcia in the amount of $45,000; a check in the amount of $3,260 payable to EMC Mortgage; and a check in the amount of $56,261.53 made out to Williamson Cadillac for a Hummer vehicle.

These ten items represented a small sampling of nearly 400 personal expenditures found in the exhibit. When added together, they represent $137,928.74 worth of expenditures in an exhibit that accumulated a total of $1,561,854.19 in personal expenditures drawn on Global's bank accounts in 2006 and 2007. During their absence, Arevalo also offered her lay opinion that one of the checks disposing of funds drawn from the Global accounts that was signed "A. Garcia"—presumably short for Angel Garcia, the defendant's deceased husband—was actually signed by the defendant, Lourdes Margarita Garcia. In all, the missed testimony takes up some six pages of the trial transcript, out of a total of 1,559 pages, and consists of 43 questions. Following this testimony, the prosecution concluded its direct examination, and Garcia's counsel, in the presence of the defendant, began her cross-examination of...