United States v. Yurek

• Decision Date: 21 May 2019
• Docket Number: No. 18-1134,18-1134
• Citation: 925 F.3d 423
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. Wendy Marie YUREK, Defendant-Appellant.
• Court: U.S. Court of Appeals — Tenth Circuit

925 F.3d 423

UNITED STATES of America, Plaintiff-Appellee,

v.Wendy Marie YUREK, Defendant-Appellant.

No. 18-1134

United States Court of Appeals, Tenth Circuit.

FILED May 21, 2019

Robert S. Jackson, Oklahoma City, Oklahoma, for Defendant-Appellant.

Pegeen D. Rhyne, Assistant United States Attorney (Jason R. Dunn, United States Attorney, with her on the brief), Denver, Colorado, for Plaintiff-Appellee.

Before BACHARACH, BALDOCK, and EBEL, Circuit Judges.

BACHARACH, Circuit Judge.

Mrs. Wendy Yurek and her husband, Mr. Daryl Yurek, were charged with tax evasion and bankruptcy fraud.¹ After a joint jury trial, Mrs. Yurek and her husband were convicted on both offenses. The district court then sentenced Mrs. Yurek to a prison term of 27 months, leading her to appeal the conviction and sentence.

We affirm in part and reverse in part. We affirm Mrs. Yurek’s conviction, but we vacate the sentence because the district court applied the wrong test when deciding whether to grant a mitigating-role adjustment.

I. We reject Mrs. Yurek’s challenges to the sufficiency of the evidence on her conviction for tax evasion and bankruptcy fraud.

We conclude that the evidence of Mrs. Yurek’s guilt was sufficient to support her conviction for tax evasion and bankruptcy fraud.

A. We engage in de novo review over the sufficiency of the evidence.

In considering the sufficiency of the evidence, we engage in de novo review. United States v. Ramos-Arenas , 596 F.3d 783, 786 (10th Cir. 2010). We will reverse only if no rational factfinder could have found that the government had proven all of the elements of an offense beyond a reasonable doubt. United States v. Brown , 400 F.3d 1242, 1247 (10th Cir. 2005).

Under de novo review, we view the trial evidence in the light most favorable to the government. United States v. Boisseau , 841 F.3d 1122, 1125 (10th Cir. 2016). We do not reevaluate witness credibility or reweigh the evidence. United States v. Smith , 133 F.3d 737, 742 (10th Cir. 1997).

B. The evidence was sufficient to convict on tax evasion.

Mrs. Yurek was convicted of tax evasion, which consists of "willfully attempt[ing] in any manner to evade or defeat any tax imposed by [the Internal Revenue Code] or the payment thereof." 26 U.S.C. § 7201. To obtain a conviction on this offense, the government had to prove three elements:

1. Mrs. Yurek owed a substantial tax to the IRS.

2. Mrs. Yurek committed "an affirmative act constituting an evasion or attempted evasion" of assessment or payment of the tax.

3. Mrs. Yurek willfully evaded or attempted to evade the assessment or payment of the tax.²

United States v. Boisseau , 841 F.3d 1122, 1125 (10th Cir. 2016) (citing Sansone v. United States , 380 U.S. 343, 351, 85 S.Ct. 1004, 13 L.Ed.2d 882 (1965) ); see United States v. Thompson , 518 F.3d 832, 850 (10th Cir. 2008) (noting that the tax liability must be "substantial").

Mrs. Yurek challenges the sufficiency of the evidence on the second and third elements (an affirmative act and willfulness).

1. The evidence was sufficient to find an affirmative act.

To establish an affirmative act, the government had to prove an act designed to "mislead or conceal" within the six-year period of limitations. United States v. Thompson , 518 F.3d 832, 852 (10th Cir. 2008) ; see United States v. Anderson , 319 F.3d 1218, 1219 (10th Cir. 2003) (holding that when a defendant commits a series of affirmative acts over multiple years, the six-year period of limitations for tax evasion begins with the last affirmative act). The government bore the burden to prove that Mrs. Yurek had committed at least one affirmative act. United States v. Hoskins , 654 F.3d 1086, 1091 (10th Cir. 2011). The jury could have reasonably found that the government had satisfied this burden.

a. "Affirmative acts" are broadly defined.

We first consider what constitutes an affirmative act. Federal law suggests an expansive definition, stating that tax evasion can be committed by evading taxes "in any manner." 26 U.S.C. § 7201 ; see Boisseau , 841 F.3d at 1125 ("[T]he type of affirmative conduct that can constitute an affirmative act of evasion is broad."). Affirmative acts thus include

• concealing assets,

• covering up sources of income, and

• engaging in misleading or concealing conduct.

Boisseau , 841 F.3d at 1125. Affirmative acts may even consist of otherwise lawful conduct if the acts are committed with an intent to evade taxes. Id. ; United States v. Gorrell , No. 18-5041, 2019 WL 1890971 at *5 (10th Cir. Apr. 29, 2019).

b. The evidence sufficed for a finding that Mrs. Yurek had committed an affirmative act.

Viewed in the light most favorable to the government, the trial evidence allowed a reasonable jury to find affirmative acts involving (1) payment of personal expenses from business accounts and (2) submission of false tax documents to the IRS.

i. The jury could have reasonably found that Mrs. Yurek had committed affirmative acts by paying her and her husband’s personal expenses out of business accounts.

Mrs. Yurek had authority to write checks on behalf of Bolder Venture Partners and Veracity Credit Consultants, LLC, and she used that authority to write business checks for her and her husband’s personal expenses. A fact-finder could have reasonably viewed the writing of these checks as affirmative acts to evade taxes.

Some of these checks came from Bolder Venture Partners, where Mrs. Yurek was a partner. For example, Mrs. Yurek signed a $ 2,309.68 check from Bolder³ to pay condominium-association dues for the loft where she and her husband lived.

Mrs. Yurek contends that her son, Mr. Justin Yurek, owned the loft. But the trial evidence was sufficient to support findings that (1) Justin had been a "straw purchaser" and (2) Mrs. Yurek and her husband were the true owners of the loft. See United States v. Reese , 745 F.3d 1075, 1078 (10th Cir. 2014) (explaining a straw purchase).

Mrs. Yurek and her husband had been leasing the loft and living in it. They had a contract to purchase the loft, but a tax lien prevented them from obtaining a mortgage. So they assigned the contract to Justin, who purchased the loft. Though Justin was the purchaser, Mrs. Yurek’s husband negotiated the sale and used companies (over which he wielded significant control) to fund more than $ 112,000 of the down payment.

After Justin purchased the loft, Mrs. Yurek signed an affidavit on Justin’s behalf, stating under oath that (1) the loft would serve as Justin’s primary residence and (2) Justin had no intent to lease the loft or to make the purchase as an investment.⁴ But Justin never lived in the loft, and Mrs. Yurek and her husband continued to live there while making only infrequent rental payments.

Mrs. Yurek not only used her role at Bolder to pay condominium-association dues but also used her check-writing authority at Veracity Credit Consultants, LLC to pay her husband’s country-club dues and expenses. For example, she signed a Veracity check for $ 3,403.43 to pay these expenses.⁵

Veracity also paid other expenses for Mrs. Yurek and her husband. For example, Veracity paid the rent on two homes that Mrs. Yurek and her husband used. Veracity’s former chief financial officer, Mr. Michael Hennigan, testified that he knew of no business purpose for these rentals or the country-club dues and expenses.

Veracity also made mortgage payments on the loft where Mrs. Yurek and her husband lived. The jury could reasonably infer that the Yureks were trying to hide the source of these mortgage payments. For example, they recorded the mortgage payments under an account designated as a loan account for Mrs. Yurek’s husband, but Veracity did little to collect on the purported loan.

Bolder and Veracity paid these various personal expenses for Mrs. Yurek and her husband while they

• owed substantial taxes and penalties to the IRS and

• tried to settle with the IRS based on their inability to pay what they owed.

These payments continued through the bankruptcy proceedings, where Mrs. Yurek and her husband tried to discharge their federal tax debt. But Mrs. Yurek and her husband did not tell the IRS about these payments.

Given this combination of evidence, the jury could have reasonably found that Mrs. Yurek had committed an affirmative act to evade the payment of taxes. See United States v. Farr , 701 F.3d 1274, 1285–86 (10th Cir. 2012) (concluding that the defendant’s use of a corporate account to pay for personal living expenses supported a factual finding that the defendant had "willfully evaded [a tax penalty] and [had taken] affirmative steps to do so").

ii. A reasonable jury could also have found that Mrs. Yurek had committed affirmative acts by submitting false tax documents to the IRS.

Along with her husband, Mrs. Yurek submitted tax forms to the IRS in 2009 and 2010. On these forms, Mrs. Yurek and her husband reported that their gross monthly income was $ 7,667. But this amount didn’t include Bolder and Veracity’s payments for personal expenses. The jury could reasonably have viewed these omissions as misleading or even false.

Mrs. Yurek’s submission of misleading or false tax documents to the IRS could constitute affirmative acts.⁶ See Sansone v. United States , 380 U.S. 343, 351–52, 85 S.Ct. 1004, 13 L.Ed.2d 882 (1965) ("[I]t is undisputed that petitioner filed a tax return and that the petitioner’s filing of a false tax return constituted a sufficient affirmative commission to satisfy that requirement of § 7201."); United States v. Hoskins , 654 F.3d 1086, 1091 (10th Cir. 2011) (concluding that submission of a false tax return "was sufficient to establish an affirmative act under § 7201").

2. The evidence was sufficient to find that Mrs. Yurek had acted willfully.

To satisfy the willfulness requirement, the government had to prove a specific intent to evade taxes. United States v. Payne , 978 F.2d 1177, 1182 (10th Cir. 1992) ; see Hoskins , 654 F.3d at 1090 ("Under § 7201, ‘willfulness’ means the ‘voluntary, intentional violation of a known...