United States v. Springer
| Decision Date | 26 October 2011 |
| Docket Number | No. 11-5053,No. 10-5055,No. 10-5057,D.C. No. 4:09-CR-00043-SPF-2,D.C. No. 4:09-CR-00043-SPF-1,No. 10-5156,10-5055,10-5057,10-5156,11-5053 |
| Parties | UNITED STATES OF AMERICA, Plaintiff-Appellee, v. LINDSEY KENT SPRINGER, Defendant-Appellant. UNITED STATES OF AMERICA, Plaintiff-Appellee, v. OSCAR AMOS STILLEY, Defendant-Appellant. UNITED STATES OF AMERICA, Plaintiff-Appellee, v. LINDSEY KENT SPRINGER, Defendant-Appellant. |
| Court | U.S. Court of Appeals — Tenth Circuit |
(N.D. Okla.)
ORDER AND JUDGMENT*Before LUCERO, BALDOCK, and TYMKOVICH, Circuit Judges.
A jury convicted Lindsey Kent Springer of one count of conspiring with Oscar Amos Stilley to defraud the United States, three counts of tax evasion, and two counts of willful failure to file a tax return. Mr. Stilley was convicted of one count of conspiracy and two counts of aiding and abetting Mr. Springer's tax evasion.
The district court sentenced both men to fifteen years in prison, three years of supervised release, and restitution for tax losses exceeding $2 million. In appeal Nos. 10-5055 and 10-5057, Mr. Springer and Mr. Stilley ("defendants") respectively challenge their convictions and sentences. In appeal Nos. 10-5156and 11-5053, Mr. Springer challenges two post-conviction proceedings.1 For the reasons discussed below, we affirm.2
The facts adduced at trial established that Mr. Springer's trouble with the Internal Revenue Service ("IRS") began in the 1980s, with a dispute over payroll taxes. R., Vol. 3 (Tr. Vol. 11) at 3093. Since then, he has maintained a course of conduct to avoid paying taxes.
In the early 1990s, Mr. Springer founded "Bondage Breakers Ministries," which aimed "to get rid of the IRS," id. at 3114. He also began touring the country, offering legal and tax advice to individuals embroiled in tax disputes, and accepting in return tens—sometimes hundreds—of thousands of dollars. In this capacity, Mr. Springer initiated "[m]aybe a thousand" lawsuits, id. (Tr. Vol. 12) at 3284, many against the government and employees of the government. He eventually met Mr. Stilley, who is now a disbarred lawyer, and together they devised a scheme to channel Mr. Springer's unreported income throughMr. Stilley's client trust account. Mr. Springer also used his ministry as a front for accepting money, despite being the subject of IRS collection-actions for unpaid income taxes dating back to 1990, and an IRS civil investigation for promoting abusive tax shelters.
By 2005, Mr. Springer had gained the full attention of the IRS. On June 3, 2005, the IRS referred Mr. Springer to the Justice Department to investigate potential criminal tax violations. On September 16 of that year, the government executed a search warrant of Mr. Springer's residence. And, on February 2, 2006, Mr. Stilley was served with a grand jury subpoena. During the course of the investigation, defendants denied receiving any income for their advice, representing instead that people simply made donations to Mr. Springer's ministry, with no expectation of services in return. But at trial, the government refuted those statements, offering testimony from numerous witnesses who had paid large sums of money to defendants in exchange for their supposed tax and legal expertise. Based on this and other evidence, the jury convicted defendants on all counts.
Defendants have now lodged these appeals.
II
Nos. 10-5055 and 10-5057
Defendants' opening brief3 can be distilled to advance the following eight arguments: 1) defendants committed no crimes because there is no government entity outside of Washington, D.C. with the lawfully delegated power to collect taxes or enforce the internal revenue laws; 2) the Paperwork Reduction Act precludes imposition of all penalties arising from their convictions; 3) the district court erred in denying their motion to suppress; 4) the district court erroneously instructed the jury as to the definitions of "gift" and "income"; 5) the district court should have allowed defendants to subpoena employees of the Justice Department and the IRS; 6) defendants did not waive their right to counsel voluntarily, knowingly, and intelligently; 7) the district court did not properly calculate their attributable tax losses under the sentencing guidelines or properly apply their respective sentencing enhancements; and 8) Mr. Stilley's conspiracy conviction cannot be classified as a felony.4
We address each argument in turn.
Defendants first contend they committed no crimes because no government entity exists outside of Washington, D.C. with the lawfully delegated authority to collect taxes or enforce federal tax laws. As we understand their argument, defendants believe the Secretary of the Treasury is authorized to collect taxes only within the territorial limits of Washington, D.C. See Aplt. Revised Opening Br. at 10 (). To accommodate this geographic restriction, defendants contend, Congress granted the President, pursuant to 26 U.S.C. § 7621, the power to establish internal revenue districts, headed by district directors, to exercise the Treasury Secretary's authority beyond Washington. See Aplt. Revised Opening Br. at 8-9. However, Congress passed the Internal Revenue Service Restructuring and Reform Act of 1998 ("RRA"), Pub. L. 105-206, 112 Stat. 685, which, among other things, abolished internal revenue districts and district directors. See Aplt. Revised Opening Br. at 11 (). Consequently, defendants claim, there is no legally authorized entity to collect taxes or enforce the tax laws, and no criminal offense stemming fromtheir failure to pay taxes. See id. .
These types of spurious delegation arguments were rejected as frivolous before the RRA was enacted, see, e.g., Lonsdale v. United States, 919 F.2d 1440, 1448 (10th Cir. 1990), and they have been rejected as frivolous since, see, e.g., United States v. Ford, 514 F.3d 1047, 1053 (10th Cir. 2008). The Secretary of the Treasury is authorized under 26 U.S.C. § 6091(a) to promulgate regulations prescribing "the place for the filing of any return, declaration, statement or other document." Internal revenue districts are "now defunct," Allnutt v. Comm'r, 523 F.3d 406, 408 n.1 (4th Cir. 2008), but 26 C.F.R. § 1.6091-2(a) requires individuals to file returns with "any person assigned the responsibility to receive returns at the local Internal Revenue Service office that serves the legal residence . . . of the person required to make the return." Otherwise, if so instructed, individuals or corporations must file returns with a specifically designated internal revenue service center. Id. § 1.6091-2(c).
In short, defendants' delegation argument is patently frivolous.
Defendants next contend they were not subject to any penalties because IRS Form 1040 fails to comply with the Paperwork Reduction Act, 44 U.S.C. §§ 3501, et seq. ("PRA"). In particular, they cite § 3512(a), which states:
[N]o person shall be subject to any penalty for failing to comply with a collection of information . . . if . . . (1) the collection of information does not display a valid control number . . .; or (2) the agency fails to inform the person who is to respond to the collection of information that such person is not required to respond to the collection of information unless it displays a valid control number.
According to defendants, they cannot be penalized for their crimes because IRS Form 1040 does not comply with § 3512(a).
Initially, defendants make no showing that IRS Form 1040 fails to comply with § 3512(a). And, we rejected a similar argument in one of Mr. Springer's prior appeals. See Springer v. Comm'r, 580 F.3d 1142, 1144-46 (10th Cir. 2009). In that case, he contested certain failure-to-pay penalties on the ground that Form 1040 violated the PRA, but we recognized that Form 1040 did not give rise to the penalties because they had an "independent and separate statutory basis under the Internal Revenue Code . . . that [was] not based on Mr. Springer's failure to file Form 1040s." Id. at 1145. Likewise, here, defendants' obligation to file a return, and the crimes associated with their efforts to circumvent that obligation, are prescribed by statute, e.g., 26 U.S.C. §§ 6012 (), 7203 (proscribing the failure to file return); there is no substantive obligation orcrime arising out of Form 1040 itself. See United States v. Gross, 626 F.3d 289, 295-96 (6th Cir. 2010) (); see also United States v. Dawes, 951 F.2d 1189, 1192 (10th Cir. 1991) (). In fact, an actual Form 1040 may not even be necessary to comply with the statutory obligations. See United States v. Stillhammer, 706 F.2d 1072, 1075 (10th Cir. 1983).
Defendants might have invoked the PRA to avoid any penalties assessed for submitting faulty information on a...
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