United States v. Maynard

• Decision Date: 31 December 2020
• Docket Number: No. 19-1304,19-1304
• Citation: 984 F.3d 948
• Parties: UNITED STATES of America, Plaintiff - Appellee, v. Riordan Anthony MAYNARD, Defendant - Appellant.
• Court: U.S. Court of Appeals — Tenth Circuit

984 F.3d 948

UNITED STATES of America, Plaintiff - Appellee,

v.Riordan Anthony MAYNARD, Defendant - Appellant.

No. 19-1304

United States Court of Appeals, Tenth Circuit.

FILED December 31, 2020

Grant R. Smith, Assistant Federal Public Defender (Virginia L. Grady, Federal Public Defender, with him on the briefs), Office of the Federal Public Defender for the District of Colorado, Denver, Colorado, appearing for Appellant.

Aaron M. Teitelbaum, Assistant United States Attorney (Jason R. Dunn, United States Attorney, with him on the brief), Office of the United States Attorney for the District of Colorado, Denver, Colorado, appearing for Appellee.

Before BRISCOE, BALDOCK, and McHUGH, Circuit Judges.

BRISCOE, Circuit Judge.

Defendant Riordan Maynard, the former chief executive officer of two related companies, was convicted by a jury of twenty-six criminal counts arising out of his gross mismanagement of those companies. Counts 1 and 2 related to Maynard's failure to pay corporate payroll taxes to the Internal Revenue Service and his related efforts to impede the government's investigation into those unpaid taxes. Count 3 arose out of Maynard's conspiracy with an employee to steal or embezzle employee benefit plan and health care contributions that were made by company employees. Counts 4 through 13 related to Maynard's theft or embezzlement of employee benefit plan contributions. Counts 14 through 26 related to Maynard's theft or embezzlement of employee health care contributions. The district court sentenced Maynard to 78 months’ imprisonment. The district court also ordered Maynard to pay restitution to the Internal Revenue Service and to the employee-victims.

Maynard now appeals. Maynard argues that: (1) the district court misapplied the Sentencing Guidelines in calculating his offense level for Counts 1 and 2; (2) his convictions on Counts 14 through 26 were not supported by sufficient evidence; (3) the district court erred in calculating the restitution award for Counts 4 through 13; and (4) the district court plainly erred in calculating the restitution award for Counts 14 through 26.

Exercising jurisdiction pursuant to 28 U.S.C. § 1291, we reject all of Maynard's arguments and affirm his convictions and sentence.

I

Tax evasion

Maynard founded Touchbase USA, Inc. (TBUSA) in approximately 2001, and served as its chief executive officer until approximately February 13, 2012. TBUSA provided telecommunications design and installation services for customers.

From 2009 until 2012, TBUSA accrued unpaid federal tax liabilities of $2,595,039.00, which were comprised primarily of unpaid federal payroll taxes. The Internal Revenue Service (IRS) contacted TBUSA regarding the delinquency and ultimately initiated collection actions against TBUSA, including levying on TBUSA's bank accounts.

In early 2012, Maynard responded to the IRS's collection efforts by shutting down TBUSA and starting a new company, Touchbase Global Services, Inc. (TBGSI), a few weeks later. TBGSI was essentially a continuation of TBUSA, operating with mostly the same employees and offering the same services to mostly the same customer base. Notably, TBGSI also continued TBUSA's practice of failing to pay its payroll taxes. By the end of 2013, TBGSI owed over $1 million in unpaid federal payroll taxes.

At that point, the IRS assigned a revenue officer, Joanna Randall, to collect TBGSI's unpaid taxes. Randall focused her efforts on determining who TBGSI's officers were. Randall did so for two reasons: to obtain necessary information about TBGSI's finances, and to determine who could be held personally liable for the payroll taxes that were deducted from the checks of TBGSI's employees but never paid to the IRS. Maynard falsely denied being an officer of TBGSI and told Randall that his brother, Magnus Maynard, was in charge of TBGSI. In fact, however, Magnus had no involvement in running the company.

In late 2013, Randall began levying on TBGSI's corporate bank account in an effort to recover some of the unpaid taxes. Unbeknownst at the time to Randall, however, Maynard was engaging in efforts to transfer funds from TBGSI's corporate bank account to his own personal bank account in order to avoid Randall's levying attempts.

TBGSI made tax payments to the IRS in 2014 and 2015. Randall's involvement with TBGSI ceased in March 2015, after TBGSI entered into an installment agreement with the IRS to pay its outstanding tax liability.

In the second quarter of 2016, however, TBGSI began to once again avoid making necessary tax payments to the IRS. TBGSI subsequently defaulted on its installment agreement with the IRS. Consequently, the IRS assigned a new revenue officer, Crystal Figueroa, to collect TBGSI's unpaid taxes.

In early 2017, Figueroa began levying on TBGSI's bank account in an attempt to recover the unpaid taxes. At that time, Maynard and Christina Elbers, an Australian citizen who served as TBGSI's chief financial officer, began moving money out of TBGSI's corporate bank account and into Maynard's personal bank account to shield those monies from the levies. The IRS responded by expanding its collection activities in approximately April 2017. At that time, the IRS began sending letters to TBGSI's customers instructing them to pay the IRS directly for services rendered by TBGSI. Maynard and Elbers in turn responded by contacting those TBGSI customers who received letters from the IRS and telling them, falsely, that the IRS letters were sent in error and that the IRS would soon be retracting them. Maynard and Elbers also told those TBGSI customers to hold their funds for eventual payment to TBGSI, rather than paying the IRS.

Maynard and Elbers failed to respond honestly to the IRS's requests for a list of TBGSI's customers. The IRS sought this list in order to determine TBGSI's cash flow and accounts receivable. Maynard and Elbers instead provided the IRS with a list of only those TBGSI customers who they thought the IRS was already aware of. In other words, Maynard and Elbers omitted some of TBGSI's customers from the list in an attempt to continue receiving payments from those customers without interference from the IRS. Maynard and Elbers also deliberately delayed invoicing certain customers for services rendered on the theory that customers who had not received an invoice from TBGSI would not be obligated to pay any money to the IRS if the IRS sent them a levy notice.

Embezzlement of health insurance premiums and 401(k) contributions

TBGSI offered its employees optional health insurance coverage and a 401(k) savings plan. For those employees who chose to purchase health insurance coverage, premiums were to be deducted by TBGSI from their paychecks and forwarded to the contracted insurer. As for the 401(k) plan, TBGSI employees selected the amount, if any, they wanted withheld from each paycheck. TBGSI promised to match employee 401(k) contributions at a rate set by formula.

In 2017, the last year of TBGSI's operations, Maynard mishandled thousands of dollars of employee health insurance premiums and 401(k) contributions. Although TBGSI withheld the funds as directed by its employees, TBGSI, per Maynard's directions, stopped forwarding the health insurance premiums to the contracted insurer, United Healthcare, and did not pay the withheld 401(k) contributions funds into TBGSI's retirement plan. TBGSI also, per Maynard's directions, failed to make its promised "employer matching" contributions to the retirement plan during this period.

By June 2017, TBGSI owed United Healthcare approximately $119,000 in past due premiums. United Healthcare responded to this nonpayment by retroactively canceling TBGSI's employees’ health insurance coverage back to March 4, 2017. As a result, TBGSI employees who obtained medical care between April and June of 2017 received no insurance coverage for that care and instead were held personally responsible for the costs associated with that care. The total amount of denied claims from United Healthcare during this period for all TBGSI employees was approximately $40,204.32.

After United Healthcare cancelled TBGSI's policy, TBGSI contracted for health insurance coverage from Anthem. Maynard falsely told his employees that he made the switch due to a rate dispute with United Healthcare. TBGSI continued, at Maynard's direction, to deduct and retain premium payments from TBGSI employees’ paychecks, rather than forwarding them on to Anthem. In September 2017, Anthem retroactively canceled TBGSI's policy back to the beginning of coverage in early July 2017. As a result, TBGSI employees had no health insurance coverage from Anthem and were held personally responsible for all medical expenses they incurred from July 2017 through September 2017. Those unpaid medical expenses totaled $95,438.55.

TBGSI ceased operations in September 2017. At approximately that same time, investigators from the United States Department of Labor and the IRS began a criminal investigation into Maynard's management of TBUSA and TBGSI.

II

On July 27, 2018, a criminal complaint was filed in the United States District Court for the District of Colorado charging Maynard with one count of corruptly impeding the administration of tax laws, in violation of 26 U.S.C. § 7212(a).

Less than a month later, a federal grand jury returned a twenty-six count indictment against Maynard and Elbers. Count 1 charged Maynard with corruptly impeding the administration of tax laws, in violation of 26 U.S.C. § 7212(a). Count 2 charged Maynard and Elbers with conspiracy to defraud the United States, in violation of 18 U.S.C. § 371. Count 3 charged Maynard and Elbers with conspiracy to steal or embezzle payments made by employees into their 401(k) and health care plans, in violation of 18 U.S.C. § 371. Counts 4 through 13 charged Maynard and Elbers with theft or embezzlement from an employee benefit plan (i.e., the 401(k) plan), in violation of 18 U.S.C. §§ 664 and 2. Counts 14 through 26 charged...