United States v. Selgas, CRIM. ACTION NO. 3:18-CR-0356-S

CourtUnited States District Courts. 5th Circuit. United States District Courts. 5th Circuit. Northern District of Texas
Writing for the CourtKAREN GREN SCHOLER UNITED STATES DISTRICT JUDGE
PartiesUNITED STATES OF AMERICA v. THOMAS D. SELGAS (1) JOHN O. GREEN (3)
Docket NumberCRIM. ACTION NO. 3:18-CR-0356-S
Decision Date21 April 2020

UNITED STATES OF AMERICA
v.
THOMAS D. SELGAS (1) JOHN O. GREEN (3)

CRIM. ACTION NO. 3:18-CR-0356-S

United States District Court NORTHERN DISTRICT OF TEXAS DALLAS DIVISION

April 21, 2020


MEMORANDUM OPINION AND ORDER

This Order addresses Defendants John Green's and Thomas Selgas's Motions for a Judgment of Acquittal under FED. R. CRIM. P. 29 (the "Motions for Acquittal") [ECF Nos. 209, 212] and Motions for a New Trial under FED. R. CRIM. P. 33 (the "Motions for a New Trial") [ECF No. 210, 213].1 For the following reasons, the Court DENIES these Motions.2

I. BACKGROUND

As the present criminal action is the subject of multiple prior opinions of this Court, see United States v. Green, Crim. A. No. 3:18-CR-356-S, 2019 WL 6529446 (N.D. Tex. Dec. 4, 2019); United States v. Selgas, Crim. A. No. 3:18-CR-356-S, 2019 WL 7284123 (N.D. Tex. Dec. 27, 2019), the Court will not revisit the facts underlying this case.

This case was tried between January 7 and 15, 2020. A unanimous jury found Defendants John Green ("Green") and Thomas Selgas ("Selgas") guilty of Conspiracy to Defraud the United States, and additionally found Selgas guilty of Evasion of Payment for Tax Years 1998 through 2002 and 2005. See ECF No. 174 (Court's Charge to the Jury); ECF No. 184 (Verdict of the Jury);

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ECF Nos. 200-208 (trial transcripts). Thereafter, Green and Selgas timely filed the pending Motions for Acquittal and Motions for a New Trial, which are now ripe and before the Court.

II. ANALYSIS
A. Motions for Acquittal

"A motion for judgment of acquittal [under FED. R. CRIM. P. 29] challenges the sufficiency of the evidence to convict," and the "sufficiency of the government's evidence" is "[t]he only proper basis for [such a] motion."3 United States v. Hope, 487 F.3d 224, 227 (5th Cir. 2007) (citations omitted). The district court must "weigh all evidence in the light most deferential to the verdict rendered and assess whether a reasonable jury could have properly concluded, weighing evidence in the light most deferential to the verdict rendered . . . , that all of the elements of the crime charged had been proven beyond a reasonable doubt." Id. at 227-28 (quoting United States v. Lucio, 428 F.3d 519, 522 (5th Cir. 2005)); United States v. Gentry, 941 F.3d 767, 785 (5th Cir. 2019) (quoting United States v. Oti, 872 F.3d 678, 686 (5th Cir. 2017)). The Court should not weigh the evidence or assess witness credibility, because "the weighing of evidence and the assessment of witness credibility 'is solely within the province of the jury.'" United States v. Smith, 739 F.3d 843, 845 (5th Cir. 2014) (quoting United States v. Sanchez, 961 F.2d 1169, 1173 (5th Cir. 1992)). "The evidence need not exclude every reasonable hypothesis of innocence or be completely inconsistent with every conclusion except guilt, so long as a reasonable trier of fact could find that the evidence established guilt beyond a reasonable doubt." United States v. Terrell,

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700 F.3d 755, 760 (5th Cir. 2012) (citing United States v. Faulkner, 17 F.3d 745, 768 (5th Cir. 1994)). In the instant case, Selgas and Green challenge the sufficiency of the evidence on the conspiracy and tax evasion charges. Additionally, Green asserts that the conspiracy charge is barred by the applicable statute of limitations.

(1) Sufficiency of the Evidence of a Conspiracy

To prove a conspiracy under 18 U.S.C. § 371, the Government must prove: (1) "an agreement to commit the fraud offense"; (2) "the defendants' knowledge of the unlawful objective and willful agreement to join the conspiracy"; and (3) "an overt act by a member of that conspiracy to further the unlawful goal." United States v. Hoffman, 901 F.3d 523, 542 (5th Cir. 2018) (citing United States v. Mauskar, 557 F.3d 219, 229 (5th Cir. 2009)), cert. denied, 139 S. Ct. 2615 (2019). Weighing all evidence in the light most favorable to the verdict reached, the Court finds that a rational jury could have properly concluded that the Government proved all of these elements beyond a reasonable doubt.

a. Agreement

"For the evidence to sustain the conviction, it is not necessary that the evidence show an express or formal agreement; evidence of 'a tacit understanding is sufficient.'" United States v. Aubin, 87 F.3d 141, 145 (5th Cir. 1996) (quoting United States v. Hopkins, 916 F.2d 207, 212 (5th Cir. 1990)).

The agreement necessary to establish the existence of a conspiracy can be established by circumstantial evidence: [w]here the circumstances are such as to warrant a jury in finding that the conspirators had a unity of purpose or a common design and understanding, or a meeting of minds in an unlawful arrangement, the conclusion that a conspiracy is established is justified.

Hopkins, 916 F.2d at 212 (alteration in original) (quoting Am. Tobacco Co. v. United States, 328 U.S. 781, 810 (1946)). Thus, the evidence is sufficient for a jury to find the existence of an

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agreement proved beyond a reasonable doubt where the alleged coconspirators had meetings and were jointly involved in the alleged overt acts in furtherance of the conspiracy. See id. at 213.

In the present case, the evidence at trial showed, among other things, that: (1) a partnership of which Selgas was a partner received substantial funds from settling several lawsuits, see Trial Tr. vol. 3, 39:3-9; (2) the partnership's income should have been reported as ordinary income to the partnership, such that the partners would receive corresponding tax forms reflecting their share of the income, see id. at 39:7-16; (3) Green and Selgas had meetings where they discussed underreporting proceeds of these settlements to the IRS in purportedly "lawful" dollars that were based on the face value of gold, see, e.g., Trial Tr. vol. 8, 62:1-5; (4) Green and Selgas were involved in preparing a tax return that substantially underreported the settlement income in reliance on the same gold-value theory, see Gov't Ex. 10A; (5) Green and Selgas prepared a tax statement that reported Selgas's share of the settlement—approximately $1.5 million—as $178,640 in purportedly "lawful" dollars, see Gov't Ex. 11; (6) Green testified that he became involved with "gold coin tax filing" after beginning to deal with Selgas, see Trial Tr. vol. 8, 96:11-22; (7) Selgas routinely used Green's Interest On Lawyer's Trust Accounts ("IOLTAs"), see Gov't Exs. 302-07, which the Government contended hindered the lawful functions of the IRS, see Trial Tr. vol. 4, 22:8-35:8; and (8) Green admitted that he accompanied Selgas on his attempts to pay his taxes in gold coins, see Trial Tr. vol. 8, 17:10-21:14. A rational jury could infer from these facts that Green and Selgas "had a unity of purpose or a common design and understanding," and, therefore, that there was an agreement to defraud the United States. Hopkins, 916 F.2d at 212.

b. Knowingly and Willfully

To convict a defendant of a conspiracy to defraud the United States, the Government must prove beyond a reasonable doubt that the defendant knew the unlawful objective and willfully agreed to join the conspiracy. See Hoffman, 901 F.3d at 542 (citation omitted). To find that an

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act was done "knowingly," the Government must prove that the act "was done voluntarily and intentionally, not because of mistake or accident." United States v. Davis, 132 F.3d 1092, 1094 (5th Cir. 1998). To find that an act was done "willfully," in turn, the Government must prove that "the act was committed voluntarily and purposely with the specific intent to do something that the law forbids; that is to say, with a bad purpose either to disobey or disregard the law." Id.; see also United States v. Thompson, 761 F. App'x 283, 292-93 & n.44 (5th Cir. 2019). Proof of the requisite intent may be established by circumstantial evidence, see, e.g., United States v. Schmick, 904 F.2d 936, 941 (5th Cir. 1990), and the Government does not need to prove that each defendant knew all the details of the conspiracy, see United States v. Parrish, 736 F.2d 152, 157 (5th Cir. 1984).

Weighing all evidence in the light most deferential to the verdict rendered, the Court finds that a reasonable jury could have properly concluded that the Government proved beyond a reasonable doubt that Green and Selgas acted knowingly and willfully. There is ample evidence showing that Selgas was personally involved in using gold coins to attempt to underreport his income or pay his taxes in gold coins. See, e.g., Trial Tr. vol. 8, 17:10-21:14, 62:1-5; Gov't Ex. 10A. Moreover, Green allegedly learned of the "gold coin tax filing" from Selgas. See Trial Tr. vol. 8, 96:11-22. A rational jury could have inferred Selgas's scienter from his extensive participation in the alleged conspiracy. See United States v. Burns, 162 F.3d 840, 849-50 (5th Cir. 1998).

As for Green, the evidence shows that Green entered an appearance in Tax Court cases for Selgas that resulted in rulings against Selgas. See Gov't Exs. 226, 236. In the light most deferential to the verdict, this evidence establishes that Green knew that Selgas owed taxes for the years 1998

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to 2008, and that Selgas's tax positions were frivolous.4 See Gov't Exs. 224, 234. Additionally, Green participated in the preparation of a tax statement that reported Selgas's receipt of a $1.5 million settlement share as $178,640 in income, see Gov't Ex. 11, and engaged in the improper use of IOLTAs to further conceal Selgas's funds, see, e.g., Gov't Exs. 95, 104, 105, 111-13, 302-07; Trial Tr. vol. 4, 22:8-35:8. Green's and Selgas's significant involvement in the activities that impeded the lawful functions of the IRS, coupled with multiple notices from the IRS advising them that their positions were meritless, is sufficient for the jury to find that they acted with the requisite scienter. See United States v. Plato, 593 F. App'x 364, 371 (5th Cir. 2015). At the very least, the evidence was sufficient for the jury to infer scienter from Green's and Selgas's deliberate ignorance. See, e.g...

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