USA v. Jewell

• Decision Date: 09 September 2010
• Docket Number: No. 09-1930.,09-1930.
• Citation: 614 F.3d 911
• Parties: UNITED STATES of America, Appellee, v. Barry J. JEWELL, Appellant.
• Court: U.S. Court of Appeals — Eighth Circuit

614 F.3d 911

UNITED STATES of America, Appellee,

v.Barry J. JEWELL, Appellant.

No. 09-1930.

United States Court of Appeals,Eighth Circuit.

Submitted: March 11, 2010.

Filed: July 30, 2010.

Rehearing and Rehearing En Banc Denied Sept. 9, 2010.

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Samuel A. Perroni, argued, Shelly H. Koehler, on the brief, Little Rock, AR, for appellant.

George C. Vena, AUSA, argued, Laura Hoey, on the brief, Little Rock, AR, for appellee.

Before BYE, COLLOTON, and GRUENDER, Circuit Judges.

BYE, Circuit Judge.

A jury convicted Barry Jewell of aiding and abetting tax evasion in violation of 26 U.S.C. § 7201 and 18 U.S.C. § 2. The district court ¹ sentenced him to thirty months in prison and three years of supervised release, and imposed a $25,000 fine. Jewell appeals his conviction on a number of grounds. We affirm.

I

Jewell practiced tax law in Little Rock, Arkansas. Carl and Patricia Evans were two of his clients. In 2000, Carl Evans and his corporation, Press Promotions, settled a copyright infringement case for $3,000,000. Carl Evans personally received $2,062,500 of the settlement and Press Promotions received $937,500. After receiving the settlement offer but prior to accepting it, Carl Evans consulted Jewell about the tax consequences of the settlement.

In order to reduce the couple's 2000 year tax liability, Jewell suggested a scheme whereby Carl Evans purportedly arranged for a venture capital group-prior to the settlement-to fund the copyright infringement suit in exchange for $250,000. Evans would receive $250,000 even if he lost the suit, but if the suit was successful the venture capital group would receive any amount above $250,000 in exchange for funding the litigation and bearing the risk of an unsuccessful outcome. Jewell suggested the transaction so that the Evanses would only have to report $250,000 in income from the settlement on their 2000 tax return instead of the full amount actually received. In truth, however, Carl Evans funded the lawsuit himself and the agreement with the venture capital group never occurred.

To carry out the scheme, Jewell wrote a letter to Carl Evans describing the fictitious agreement with the venture capitalists. Evans then gave a copy of the letter to his accountant, who relied upon it when preparing the couple's 2000 tax return. To hide the additional settlement money, Jewell created a corporation called MIN Enterprises, Inc., and placed the money in a retirement account for MIN Enterprises. Jewell forged and backdated documents to carry out the scheme. For example, Jewell made it appear as if MIN had been created in February 1998, before the $3 million settlement, even though MIN was actually created after the settlement in July 2000. One document, backdated to February 1998, contained an Employer Identification Number the Internal Revenue Service (IRS) did not issue until July 2000. The money placed in the MIN retirement account was eventually transferred back to Carl Evans in May 2002. As payment for his services, Jewell asked for an amount equal to exactly 10% of the estimated “tax savings” which would result from the scheme, or $102,565. Carl Evans negotiated a reduced fee of $62,000 and paid Jewell that amount for his services.

On April 4, 2007, a federal grand jury returned an indictment charging Jewell with aiding and abetting tax evasion in violation of 26 U.S.C. § 7201 and 18 U.S.C. § 2, for causing the filing of a false return for the tax year 2000 in the name of Carl and Patricia Evans. The indictment also charged one count of conspiracy to commit mail fraud and three counts of money laundering. These four additional counts arose from the government's allegation that Jewell and his law partner, Bobby Keith Moser, conspired from 1996 through August 2002 to use client trust funds to pay for the general operating expenses of their law firm and Jewell's child support, and to invest over $1 million in a technology firm called Scanning Technologies, Inc., without the knowledge or approval of their clients. ² The alleged mail fraud arose from Jewell and Moser using the mails to solicit new and existing clients in order to keep client trust accounts funded. The money laundering counts alleged Jewell engaged in monetary transactions with property derived from client trust accounts. The government dismissed the three money laundering charges during trial; the jury decided the mail fraud conspiracy and tax evasion charges.

Carl Evans testified at trial, giving an account of the advice Jewell gave him with respect to the fictitious venture capital agreement. The government also introduced evidence regarding the forged and backdated documents Jewell created to carry out the scheme. In addition, the government called an IRS agent who explained the difference between the taxes the Evanses actually paid and the amount they should have paid resulted in a tax deficiency of $737,436 in the 2000 tax year.

The jury acquitted Jewell on the mail fraud conspiracy charge, but convicted him of aiding and abetting tax evasion. This timely appeal followed in which Jewell raises a number of issues challenging his conviction. Additional facts relevant to the disposition of the issues Jewell raises on appeal will be discussed below.

II

A

First, Jewell claims the district court erred in admitting into evidence a video deposition Jewell gave in a lawsuit between Piedmont Technologies and Scanning Technologies, the company in which the government alleged Jewell invested using funds from clients' trust accounts. At trial, Jewell objected to the introduction of the videotape as unfairly prejudicial under Rule 403 of the Federal Rules of Evidence. “We give deference to a district court's decision under the Rule 403 balancing test and reverse only for a clear abuse of discretion.” United States v. Guerrero-Cortez, 110 F.3d 647, 652 (8th Cir.1997). On appeal, Jewell additionally contends the introduction of the deposition violated his right to a fair trial, his right to remain silent, and amounted to prosecutorial misconduct in violation of his due process rights. Because these additional claims were not raised in the district court, we review them for plain error only. United States v. Lomeli, 596 F.3d 496, 504 (8th Cir.2010). “Under the plain error standard, we will reverse the district court only if the error prejudices the substantial rights of the defendant, and would result in a miscarriage of justice.” United States v. Jones, 266 F.3d 804, 814 (8th Cir.2001).

The government's introduction of the Piedmont videotape was not relevant to the tax evasion charge; instead, the videotape related only to the mail fraud conspiracy charge. During the deposition, Piedmont's attorney repeatedly asked Jewell for the names of the clients whose money was used to invest in Scanning Technologies, and Jewell repeatedly asserted the attorney-client privilege as the reason for refusing to answer the question. The government introduced the videotape to attempt to prove Jewell was inappropriately asserting the attorney-client privilege to avoid disclosing his use of client trust account funds without his clients' knowledge.

As noted above, the jury acquitted Jewell of the mail fraud conspiracy charge to which the videotape deposition related. In United States v. Apodaca, 666 F.2d 89 (5th Cir.1982), the Fifth Circuit addressed a similar situation in which a defendant alleged evidentiary error relating to the introduction of an exhibit relevant to acquitted conduct. In Apodaca, the defendant was charged with both corporate income tax evasion and personal income tax fraud. The jury convicted him of corporate income tax evasion, but returned verdicts of not guilty on the three counts of personal income tax fraud. Id. at 91. On appeal, he challenged the introduction of Exhibit 121, a summary of his personal expenses. The Fifth Circuit found no error in the introduction of the exhibit, stating “the defendant was acquitted on all charges related to his personal income tax returns, and ... we are convinced that there was no reasonable possibility that any error in admitting Exhibit 121 contributed to Apodaca's conviction [for corporate tax evasion].” Id. at 95-96.

Similarly, we fail to see how any alleged error in admitting the videotape deposition contributed to Jewell's conviction for aiding and abetting tax evasion. The videotape related only to the government's failed attempt to secure a conviction for conspiracy to commit mail fraud, and the jury was instructed to consider each charge separately. Cf. United States v. Lawson, 173 F.3d 666, 671 (8th Cir.1999) (concluding the defendant was not prejudiced by joinder of separate counts where the “district court also specifically instructed the jury to consider each count and the relating evidence separately” and “[n]othing in the record suggests that the jury could not keep separate the relevant evidence to each count”). We conclude the district court did not abuse its discretion in admitting the videotape under Rule 403's balancing test. In addition, we conclude the admission of the videotape did not prejudice Jewell's substantial rights.

B

Jewell next claims the district court should have granted his request to strike the testimony of witness Scott Fletcher. We review a district court's decision to admit or exclude testimony for an abuse of discretion. Quigley v. Winter, 598 F.3d 938, 946 (8th Cir.2010).

Fletcher was an attorney who practiced law with Jewell and Moser. He also oversaw the firm's computer system. Fletcher testified regarding several documents Jewell generated as part of the fictitious venture capital agreement, including the dates the documents were created. Fletcher also gave his opinion that Jewell had forged the signature of a man named Robert Standard on some documents, ³ and also testified that Jewell admitted to forging...