United States v. Dehlinger

UNPUBLISHED

UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT

No. 09-4099

UNITED STATES OF AMERICA,

Plaintiff - Appellee,

v.

ERIK DEHLINGER,

Defendant - Appellant.

Appeal from the United States District Court for the District of
South Carolina, at Florence. Terry L. Wooten, District Judge.
(4:06-cr-00900-TLW-1)

Argued: January 29, 2010 Decided: March 5, 2010

Before MOTZ, GREGORY, and DAVIS, Circuit Judges.

Affirmed by unpublished per curiam opinion.

ARGUED: Michael Louis Minns, Rain Levy Minns, THE MINNS LAW
FIRM, Houston, Texas, for Appellant. Gregory Victor Davis,
UNITED STATES DEPARTMENT OF JUSTICE, Washington, D.C., for
Appellee. ON BRIEF: Ashley Blair Arnett, THE MINNS LAW FIRM,
Houston, Texas; John M. Ervin, III, LAW OFFICE OF JOHN M. ERVIN,
III, Darlington, South Carolina, for Appellant. John DiCicco,
Acting Assistant Attorney General, Alan Hechtkopf, Tax Division,
UNITED STATES DEPARTMENT OF JUSTICE, Washington, D.C.; W. Walter
Wilkins, United States Attorney, Columbia, South Carolina, for
Appellee.

Unpublished opinions are not binding precedent in this circuit.
PER CURIAM:

On August 22, 2006, Dr. Erik Dehlinger (“Dehlinger”) was

indicted in the United States District Court for the District of

South Carolina on one count of conspiracy to defraud the United

States in violation of 18 U.S.C. § 371 and three counts of

willfully filing false income tax returns in violation of 26

U.S.C. § 7206. The matter proceeded to trial and a jury found

Dehlinger not guilty on the conspiracy charge and guilty as to

the three tax evasion charges. On January 29, 2009, Dehlinger

was sentenced to 42 months imprisonment. He now appeals his

conviction and sentence. We affirm.

I.

From 1997 to 2002, Dehlinger was an emergency room doctor

at McLeod Hospital in Florence, South Carolina. In 1997 and

1998, Dehlinger engaged the services of Hoyt Wayne Terry

(“Terry”), a certified public accountant, to prepare his income

tax returns. In 1998, Terry calculated Dehlinger’s adjusted

gross income to be $301,091, with an income tax liability of

$85,188, and self-employment taxes of $16,342. Dehlinger had

previously paid $49,510 of his tax liability and therefore owed

an additional $52,200 to the Internal Revenue Service (“IRS”).

Unbeknownst to Terry, however, Dehlinger never filed this, or

the previous year’s, tax return. In neither of these years did

2
Dehlinger report any financial information to Terry regarding a

partnership or subchapter S corporation in which he had an

interest.

Dehlinger claimed that his good fortune in avoiding the

above-described tax liability resulted from his introduction by

his co-worker, Dr. Raghavan Chari, to the Anderson’s Ark and

Associates’ (“AAA”) programs. AAA purported to serve as a tax,

retirement planning, and investment company based in Costa Rica.

AAA sold audiotapes and books and conducted seminars, providing

advice on how to, allegedly legally, avoid personal income tax

liabilities. In March 1999, Dehlinger purchased an AAA audiotape

series entitled “Gateway to Financial Freedom,” delivered by

Guardian Management, an AAA affiliate.

Following this initial purchase, Dehlinger used several

other programs marketed by AAA, including both the “Look Back”

and “Look Forward” series. AAA and Guardian Management designed

“Look Back” to enable its users to both avoid tax liabilities

for the current year and also to “recapture” taxes paid in the

two years prior to usage of the program. Under the “Look Back”

program, a user would create a partnership with an AAA affiliate

such that the customer held a 95% interest and the AAA affiliate

held the remaining five percent interest. AAA would arrange for

an entity known as “La Maquina Blanca” to make a loan directly

to the AAA affiliate minority partner, in exchange for the

3
client’s execution of a promissory note. The partnership would

then use the loan funds to make a guaranteed payment to the AAA

affiliate minority partner, allegedly for consulting and

marketing services. In accordance with Section 707(c) of the

Internal Revenue Code, a guaranteed payment to a partner for the

performance of services constitutes a deductible ordinary

business expense on the partnership’s tax returns. 26 U.S.C. §

707(c). Because the partnership created by AAA reported zero or

at most minimal income, the guaranteed payment resulted in a net

loss for the partnership, which would then pass through to each

of the partners in proportion to their ownership interests. The

partners could use the loss to avoid paying taxes for the

current year and to “recapture” taxes paid for the two preceding

years.

In contrast to the “Look Back” program, the “Look Forward”

program sought to avoid current income tax liability. Under the

plan, AAA created a limited liability corporation (“LLC”) for

each client. The partnership created through the “Look Back”

program would provide consulting services to the LLC. The LLC

would then make a “consulting fee” payment to the partnership’s

bank account, over which the client had sole control. Again, the

losses would “pass-through” to the client, resulting in losses

on his or her income tax returns.

4
 In reality, neither of these programs operated as it was

purported to operate. Baton Venture, the partnership AAA created

for Dehlinger as a part of the “Look Back” program, allegedly

received a loan from La Maquina Blanca of $650,000 in time to

make a guaranteed payment in that amount to Mason Advertising,

the AAA-created minority partner, by December 30, 1998. In fact,

Dehlinger neither signed the promissory note nor paid the loan

fees until March 1999, both prerequisites for the funding of the

loan, according to the note. Rather, Dehlinger backdated his

signature to December 20, 1998. In addition, Dehlinger never

made a payment on the loan or granted the creditor a security

interest even though he signed both the loan agreement and

promissory note. Finally, despite claiming a partnership loss of

$646,594 because of the guaranteed payment, there is no record

of such a payment made to Mason Advertising.

All in all, the partnership losses translated to a negative

$335,167 adjusted gross income for Dehlinger in 1998 and a

refund of nearly $45,000 when computed by the Guardian

Management Company. Dehlinger filed a Form 1045 in that year,

prepared by George Benoit (“Benoit”), a Guardian Management

employee. This return sought refunds of $34,135 and $34,442 for

taxes paid in 1996 and 1997. Dehlinger filed this return rather

than the one Terry had previously prepared. Dehlinger’s 1999

Form 1040, also prepared by Benoit, reported an income of

5
$240,164 from his medical practice. Again, however, Dehlinger

reported no taxable income and no tax liability. On his 2000

Form 1040, Dehlinger again reported no taxable income and no tax

liability. Dehlinger reported a partnership loss of $242,670 due

to a $250,000 guaranteed payment to Mason Advertising, resulting

in no tax liability despite an income from his medical practice

of $240,164. In February 2002, Dehlinger used an AAA-affiliated

CPA, Tara LaGrand (“LaGrand”), to prepare his 2001 tax returns.

LaGrand also amended Dehlinger’s 2000 tax return, using the

“Look Back” program to recapture taxes already paid.

On August 22, 2006, a grand jury sitting in the District of

South Carolina returned a four-count indictment charging

Dehlinger with one count of conspiracy to defraud the United

States, in violation of 18 U.S.C. § 371, and three counts of

making and subscribing a false return, in violation of 26 U.S.C.

§ 7206(1). Dehlinger pled not guilty on all counts.

At trial, Dehlinger testified on his own behalf, claiming

that Dr. Chari had convinced him that the programs sold by AAA

were legitimate means of avoiding income taxes. Dehlinger denied

knowing that the various components of the program were

illegitimate. He claimed that at the time he filed the returns,

he did not believe that he was committing fraud by taking

deductions related to the AAA programs. He also asserted that he

relied on his tax return preparers and the AAA principals,

6
including LaGrand, in filing the returns that reported zero tax

due and owed.

Following a five-day jury trial, the jury convicted

Dehlinger on three counts of making and subscribing a false

return, and acquitted him on the conspiracy to defraud count. On

January 7, 2009, the district court sentenced Dehlinger to 42

months’ incarceration, to be followed by one year of supervised

release. The court also ordered him to pay restitution of

$363,207, a fine of $5,000, and a $300 special assessment.

II.

Dehlinger challenges his conviction principally on the

ground of ineffective assistance of counsel, claiming that his

attorney had a conflict of interest that impaired his

representation of Dehlinger. Dehlinger also challenges the

district court’s (1) denial of his motion for a mistrial after a

witness volunteered testimony previously ruled to be

inadmissible hearsay; (2) admission of testimony from an

undercover IRS agent regarding his experience with AAA programs;

and (3) calculation of his base offense level and imposition of

a sentencing guidelines enhancement for obstruction of justice.

We address these issues in turn.

7
 A.

Whether defendant’s trial counsel had a conflict of

interest presents a mixed question of law and fact, reviewed de

novo by this court. See Mickens v. Taylor, 240 F.3d 348, 360

(4th Cir. 2001) (en banc), aff’d, 535 U.S. 162 (2002); Williams

v. French, 146 F.3d 203, 212 (4th Cir. 1998).

This court considers ineffective assistance claims on

direct appeal only if it “‘conclusively appears’ from the record

that defense counsel did not provide effective representation.”

United States v. Gastiaburo, 16 F.3d 582, 590 (4th Cir. 1994)

(citations omitted); United States v. Baldovinos, 434 F.3d 233,

239 (4th Cir. 2006); United States v. Richardson, 195 F.3d 192,

198 (4th Cir. 1999); United States v. King, 263 Fed. App’x 332,

333 (4th Cir. 2008). The reason for this restriction is that,

generally, a motion under 28 U.S.C. § 2255 in the district court

is preferable than direct appeal, so that the parties may

adequately develop the record. Gastiaburo, 16 F.3d at 590

(citations omitted); United States v. King, 119 F.3d 290, 295

(4th Cir. 1997).

The Supreme Court has held that criminal defendants have a

Sixth Amendment right to conflict-free representation by

counsel. Cuyler v. Sullivan, 446 U.S. 335, 345-50 (1980);

Holloway v. Arkansas, 435 U.S. 475 (1978). A defendant seeking a

new trial must show “‘some real conflict of interest . . .

8
resulting from [overlapping] representation [of two clients]’”

to succeed on this Sixth Amendment claim. United States v.

Atkinson, 565 F.2d 1283, 1284 (4th Cir. 1977) (quoting United

States v. Lovano, 420 F.2d 769, 772 (2d Cir. 1970)). The mere

fact of overlapping representation is insufficient to create a

Sixth Amendment violation. See id. Rather, a defendant must

establish that (1) his attorney labored under “an actual

conflict of interest” that (2) “adversely affected his lawyer's

performance.” Sullivan, 446 U.S. at 348; Strickland v.

Washington, 466 U.S. 668, 691-92 (1984); United States v. Stitt,

552 F.3d 345, 350 (4th Cir. 2008), cert. denied, 130 S. Ct. 65

(2009); United States v. Tatum, 943 F.2d 370, 375 (4th Cir.

1991).

Dehlinger claims that his attorney, Scott Engelhard, Esq.

(“Engelhard”) had a conflict that arose from the latter’s

representation of him, LaGrand (the AAA-affiliated CPA who

prepared his 2001 tax returns and amended his 2000 tax returns),

and Collis Redd (“Redd”), an AAA tax planner. According to

Dehlinger, Engelhard refused to call LaGrand as a witness during

his trial, even though LaGrand could have offered exculpatory

9
evidence, because Engelhard’s loyalties were divided between the

two clients. 1

Here, although Dehlinger raises more than a colorable claim

that Engelhard’s loyalties were impermissibly divided, a review

of the record shows that the facts are not conclusive. It is not

for this court to determine the character, duration, and extent

of Engelhard’s representation of Dehlinger, LaGrand, and Redd,

in the first instance, and whether his representation of these

individuals created actual conflict that adversely affected his

representation of Dehlinger. Indeed, we decline to comment on

these issues. Although, at Dehlinger’s insistence, the district

court conducted limited, non-evidentiary post-verdict

proceedings to examine Dehlinger’s allegations against

Englehard, we agree with the court’s conclusion that the facts

and circumstances presented by this record should be evaluated

by a district judge acting on an adequate factual record in an

orderly post-conviction proceeding rather than on the basis of

dueling affidavits and declarations. Accordingly, we hold that

Dehlinger has not “conclusively” established the existence of an

1
According to Dehlinger, LaGrand could have testified that
her clients, Dehlinger included, believed that AAA’s tax
strategies were legal. Ostensibly, LaGrand’s testimony would
have contradicted the government’s evidence of Dehlinger’s
willful violation of the tax laws. Dehlinger further argues that
LaGrand’s testimony previously exculpated defendants in related
and similar prosecutions in other federal districts.

10
actual conflict of interest that adversely affected Engelhard’s

representation of Dehlinger. 2

B.

We review a district court’s refusal to grant a mistrial

for abuse of discretion. United States v. West, 877 F.2d 281,

287-88 (4th Cir. 1989). An abuse of discretion is found “only

under the most extraordinary of circumstances” and requires that

a defendant have experienced prejudice. United States v.

Dorlouis, 107 F.3d 248, 257 (4th Cir. 1997). A defendant cannot

prove prejudice if a jury “could make individual guilt

determinations by . . . appraising the independent evidence

against each defendant,” but rather this court must find that

there is a “reasonable possibility” that the error influenced

the jury’s verdict. United States v. Porter, 821 F.2d 968, 972

(4th Cir. 1987); United States v. Seeright, 978 F.2d 842, 849

(4th Cir. 1992). A district court can generally prevent

prejudice to a defendant by “a cautionary or limiting

instruction, particularly if the danger of prejudice is slight

in view of the overwhelming evidence of guilt.” United States

v. Ham, 998 F.2d 1247, 1254 (4th Cir. 1993) (quoting United

States v. Masters, 622 F.2d 83, 87 (4th Cir. 1980); see also

2
In light of our holding, we deny Dehlinger’s motion to
file a supplemental brief.

11
United States v. Johnson, 610 F.2d 194, 196-97 (4th Cir. 1979)

(“The general rule is that if evidence which may have been taken

in the course of a trial be withdrawn from the consideration of

the jury by the direction of the presiding judge, that such

direction cures any error which may have been committed by its

introduction.”).

Here, the district court did not abuse its discretion in

denying Dehlinger’s motion for a mistrial after William Cauthen,

Jr. (“Cauthen”) offered testimony that the court had previously

deemed inadmissible and subsequently ordered stricken. The

district court had ruled that Cauthen could not characterize

anything on the AAA website as “right wing or fringe.” In

response to the prosecutor’s inquiry of his “impression of the

information that [he] saw on the AAA website,” however, Cauthen

stated that he “thought the information that I saw there was

sort of fringe material, right wing material, and that

potentially it could be fraud.” Upon Dehlinger’s objection and

motion for a mistrial, the district court ordered the statement

stricken from the record. The district court refused to grant a

mistrial. During final instructions the district court reminded

the jury that “if any evidence was stricken from the record,

[they] should not consider that evidence in making [their]

decision.”

12
 Cauthen’s statement was one line in a four-day trial

replete with evidence establishing Dehlinger’s guilt, including

signed fraudulent tax returns. The district court quickly

ordered the statement stricken and, before deliberations,

reminded the jury not to consider such evidence. See United

States v. Harris, 165 F.3d 1062, 1066 (6th Cir. 1999) (affirming

the district court’s denial of a motion for mistrial after a

brief reference to a prior arrest where “the district court gave

an immediate and clear limiting instruction”); Black v. Shultz,

530 F.3d 702, 707 (8th Cir. 2008) (affirming the district

court’s refusal to grant a mistrial given the fact that the

court “gave a curative instruction” after a single statement was

made in violation of the court’s order). And although Dehlinger

claims before us that the statement was devastating to his

defense, he does not state how the statement made about the AAA

website prejudiced him or what impact it likely had on the

jury’s determination of his guilt. See United States v.

Baumgarten, 517 F.2d 1020, 1030 (8th Cir. 1975) (denying

defendant’s motion for a mistrial where witness’ brief reference

to defendant’s previous arrest was “of very little

significance”); United States v. Butler, 71 F.3d 243, 255 (7th

Cir. 1995) (holding that a prosecutor’s lone comment did not

warrant a mistrial as it “was a single, isolated, indirect

remark”).

13
 C.

The decision whether to admit evidence is properly within a

district court’s discretion; thus, we review a district court’s

admission of evidence for abuse of discretion. United States v.

Hodge, 354 F.3d 305, 312 (4th Cir. 2004); United States v.

Lancaster, 96 F.3d 734, 744 (4th Cir. 1996). A district court

abuses its discretion “only when it can be said that [it] acted

arbitrarily or irrationally in admitting evidence,” something

that occurs only under “the most extraordinary of

circumstances.” United States v. Williams, 445 F.3d 724, 732

(4th Cir. 2006) (citing United States v. Simpson, 910 F.2d 154,

157 (4th Cir. 1990)); see also United States v. Heater, 63 F.3d

311, 325 (4th Cir. 1995) (“[I]n order to find a district court's

error harmless, we need only be able to say ‘with fair

assurance, after pondering all that happened without stripping

the erroneous action from the whole, that the judgment was not

substantially swayed by the error.’”) (quoting United States v.

Nyman, 649 F.2d 208, 211–12 (4th Cir. 1980)).

1.

Fed. R. Evid. 701 allows lay witnesses to express opinions

that are “(a) rationally based on the perception of the witness,

(b) helpful to a clear understanding of the witness' testimony

or the determination of a fact in issue, and not based on

scientific, technical, or other specialized knowledge within the

14
scope of [expert testimony].” In addition, courts have held

that lay testimony generally requires that the opinion offered

be “the product of reasoning processes familiar to the average

person.” See United States v. Garcia, 413 F.3d 201, 215 (2d.

Cir. 2005); United States v. Cooks, 589 F.3d 173, 180 (5th Cir.

2009).

Dehlinger argues that the district court impermissibly

allowed lay witnesses to offer “expert testimony” designed to

show that he possessed a guilty state of mind during his

interactions with AAA. At trial, the district court permitted

Cauthen to offer testimony about the AAA website. As just

discussed, however, the court ordered testimony characterizing

the website as “fringe,” stricken from the record and instructed

the jury to disregard it. The court also permitted Special Agent

Mike Preiss, who conducted an undercover investigation into the

operation of AAA, to testify about investors’ relationships with

AAA, specifically focusing on Dehlinger. In permitting such

testimony, the court reasoned that the testimony would “provide

some evidence for the jury to consider in terms of what actually

went on at [AAA] and what the process was.” As a witness, Preiss

compared the partnership documents AAA sent him while he was

undercover with those that Dehlinger had obtained from AAA and

testified to his understanding of how the AAA programs worked,

and specifically, that he was to receive about $300,000 in tax

15
savings. Preiss also noted the existence of similar statements

about tax benefits in an executive summary AAA sent to

Dehlinger. Preiss further discussed and compared plan documents

that he had received from AAA with those Dehlinger had in his

possession. To his knowledge, Preiss indicated that the

partnerships and companies created by AAA conducted no business

of their own, as indicated in their income tax returns which

listed no gross income or receipts and included only minimal

expenditures, other than the guaranteed payment at issue. And

even though the partnership agreement explicitly set out the

various responsibilities of each partner to the agreement, the

partners never performed any of these duties. Priess testified

that, based on his experience with AAA, he was not obligated to

repay the loan for which he had cosigned and that was

subsequently used to fund the guaranteed payment to his AAA-

affiliated partner.

Dehlinger claims that Cauthen’s and Preiss’s testimony

amounted to impermissible expert testimony because their

statements demonstrate that Dehlinger knew the information on

the AAA website was illegitimate and that Dehlinger had the same

guilty state of mind as Preiss did during his interactions with

AAA, respectively. This argument fails. The testimony at issue

in this case is not, in either purpose or effect, that of an

expert. Both witnesses merely offered their opinion of their

16
individual experiences with AAA, making deductions and drawing

inferences that an “average person” would similarly be capable

of in an identical situation. Neither Cauthen nor Priess

testified about Dehlinger’s mental state or whether he knowingly

violated the tax laws. Cauthen limited his statements only to

his personal impressions of the AAA website, which were later

stricken, as previously discussed. Preiss’s testimony was

restricted to his own knowledge of, and experience with, AAA. He

offered his personal impressions of AAA and the similarities

inherent in the documents AAA provided to him and those

Dehlinger received. He did not, as Dehlinger would have us

believe, proffer testimony suggesting that Dehlinger himself

possessed a felonious intent. He never testified or even hinted

that, because he believed AAA’s programs were illegal, Dehlinger

must have believed they were illegal as well. In short, neither

Cauthen nor Priess testified to the ultimate issue of

Dehlinger’s willfulness as an expert witness would have.

2.

Where admission of lay testimony is challenged as bordering

on expert opinion, testimony that has no direct effect upon

proof of the elements of the substantive offenses charged, will

not be overturned, particularly if there is sufficient evidence

elsewhere in the record upon which the jury could have found the

defendant guilty. See Fed. R. Crim. P. 52(b)).

17
 Dehlinger was found guilty of three counts of willfully

filing false income tax returns. One of the elements proved by

the government was that Dehlinger voluntarily and intentionally

violated a known legal duty. Cheek v. United States, 498 U.S.

192, 201 (1991). Even discounting Priess’s testimony, there was

sufficient evidence of willfulness. For instance, the government

presented evidence that, in 1998, Dehlinger had accurate Form

1040s prepared by Terry. Dehlinger, however, did not file this

form or inform Terry that this form was incorrect. Rather,

Dehlinger signed and filed a tax return that claimed a refund of

all taxes paid to a AAA partner. This evidence shows that

Dehlinger knowingly filed fraudulent tax returns. See United

States v. Mohney, 949 F.2d 1397, 1407 (6th Cir. 1991) (“A

taxpayer’s signature on a return does not in itself prove his

knowledge of the contents, but knowledge may be inferred from

the signature along with the surrounding facts and

circumstances, and the signature is prima facie evidence that

the signer knows the contents of the return.”) (citing United

States v. Harper, 458 F.2d 891, 894 (7th Cir. 1971)); United

States v. Drape, 668 F.2d 22, 26 (1st Cir. 1982) (holding that a

defendant’s signature is sufficient to establish knowledge once

it has been shown that the return was false). The district court

did not abuse its discretion in refusing to grant a mistrial.

18
 D.

We review a district court’s interpretation of the

Sentencing Guidelines de novo and its factual findings for clear

error. United States v. Osborne, 514 F.3d 377, 387 (4th Cir.

2008), cert. denied, 128 S. Ct. 2525 (2008); United States v.

Daughtrey, 874 F.2d 213, 217-18 (4th Cir. 1989). If a defendant

fails to raise a timely objection during sentencing, however, we

review the district court’s actions for plain error. See United

States v. Olano, 507 U.S. 725, 731-32 (1993); United States v.

Uzenski, 434 F.3d 690, 711 (4th Cir. 2006); United States v.

Lynn, Nos. 08-5125, 08-5126, 08-5132, 09-4341, _ F.3d _, 2010 WL

322176 (4th Cir. Jan. 28, 2010).

Dehlinger claims that the district court improperly

sentenced him when it (1) took into account three years of tax

losses for which he was not indicted or convicted and (2)

increased his offense level by two levels for obstruction of

justice. As to the former issue, the district court properly

took into account three years of tax losses for which Dehlinger

was not indicted in calculating his base offense level. When an

offense involves tax evasion or filing fraudulent tax returns,

the Sentencing Guidelines calculates a defendant’s base offense

level on the attempted tax loss, defined as “the total amount of

loss that was the object of the offense.” U.S.S.G. §

2T1.1(c)(1); United States v. Delfino, 510 F.3d 468, 472 (4th

19
Cir. 2007). Tax loss is loss attributable to the offense of

conviction and any other loss due to relevant conduct, including

“all acts and omissions committed, aided, abetted, counseled,

commanded, induced, procured, or willfully caused by the

defendant . . . that occurred during the commission of the

offense of conviction, in preparation for that offense, or in

the course of attempting to avoid detection or responsibility

for that offense,” U.S.S.G. § 1B1.3(a)(1), and all such acts and

omissions that were part of the same course of conduct or common

scheme or plan as the offense of conviction, U.S.S.G. §

1B1.3(a)(2). “[A]ll conduct violating the tax laws should be

considered as part of the same course of conduct or common

scheme or plan unless the evidence demonstrates that the conduct

is clearly unrelated.” U.S.S.G. § 2T1.1 comment (n.2); United

States v. Ervasti, 201 F.3d 1029, 1042 (8th Cir. 2000).

Here, the presentence investigation report recommended a

tax loss of $363,207, which included tax loss for the six-year

period from 1996 to 2001. During sentencing, Dehlinger did not

object to the very inclusion of tax losses from 1996, 1997, and

1998. Rather, Dehlinger objected to the inclusion of those tax

losses only to the extent that they did not reflect deductions

to which he may have been entitled. The district court did not

err in overruling Dehlinger’s objection and including tax losses

from 1996 to 1998 because it was shown at trial that Dehlinger

20
used the same AAA programs and made the same types of deductions

in those three years as the subsequent three years for which he

was indicted and convicted. See Ervasti, 201 F.3d at 1042 (using

"fraud loss," which defendant conceded to be $5,747,478.88,

rather than "tax loss," to which she did not “ascribe a precise

value,” as the basis for calculating the base offense level in a

mail fraud case in which the defendant misappropriated impounded

tax monies from clients of their payroll processing

corporation); see also United States v. Hayes, 322 F.3d 792,

801-02 (4th Cir. 2003) (vacating a sentence because the district

court did not consider all relevant evidence in determining the

applicable tax loss).

As to the second of Dehlinger’s sentencing issues, the

district court did not err in increasing Dehlinger’s offense

level by two levels for obstruction of justice. The Sentencing

Guidelines allow a two level increase if “the defendant

willfully obstructed or impeded, or attempted to obstruct or

impede, the administration of justice with respect to the

investigation, prosecution, or sentencing of the instant offense

of conviction and any relevant conduct.” U.S.S.G. § 3C1.1;

United States v. Puckett, 61 F.3d 1092, 1095 (4th Cir. 1995).

Obstruction of justice includes committing perjury at trial.

U.S.S.G. § 3C1.1, comment (n.4(b)). A district court applying an

enhancement based on obstruction of justice must necessarily

21
find, by a preponderance of the evidence, that the defendant (1)

gave false testimony, (2) concerning a material matter, (3) with

the willful intent to deceive while under oath. United States v.

Dunnigan, 507 U.S. 87, 92-98 (1993); United States v. Sun, 278

F.3d 302, 314 (4th Cir. 2002) (citing United States v. Smith, 62

F.3d 641, 646 (4th Cir. 1995)).

The district court found that Dehlinger committed perjury

when he testified (extensively) under oath that he relied on

others, taking advice from his accountant and financial planner,

as well as Dr. Chari, regarding the legality and soundness of

the AAA programs. Specifically, Dehlinger claimed that he took

certain deductions “because Richard Marks and George Benoit said

they were appropriate deductions.” Tr. 108. As an initial

matter, the district court’s enhancement for perjury did not

constitute double counting (even though Dehlinger’s crime

constituted lying to the IRS) because the crime for which he was

convicted was completed by the time he went on trial. Indeed,

his crime was complete after he had filed the fraudulent tax

returns. Lying under oath constitutes a new and different

circumstance designed to hide the already completed crime. In

short, the conduct underlying Dehlinger’s conviction is

different from the conduct upon which the district court based

its enhancement.

22
 Second, the district court properly reasoned that, since

the jury found Dehlinger guilty of all tax evasion charges, it

must have rejected all of his testimony regarding good faith and

lack of willfulness. During sentencing, the district court

discussed at length its reasons for enhancing Dehlinger’s

sentence; namely, that Dehlinger (1) gave false testimony, (2)

concerning a material matter, (3) with the willful intent to

deceive while under oath. The district court said,

[Defendant’s] testimony was to say, if it is
detrimental reliance, if that is the description, the
proper description, it may well be; but it was more
specific about what was going on, what I did and,
gosh, I really did not know that this was not on the
up and up. And it seems that the jury evaluated that
testimony and the jury found the defendant guilty and
ignored that testimony altogether. . . .

But [defendant] was very specific about what he had
done and the fact that it was not bad motive or
criminal intent by him; but the specifics were such
that, it seems to me, there was a rejection of those
facts. . . . But the testimony was detailed and
specific about what happened; and he asked the jury to
rely on his position that he did not know what was up
in light of a lot of evidence that indicated that he
knew some of the things that were going on simply were
not legal, and ultimately the jury concluded they were
criminal.

Sent. Tr. 34-38. These observations by the district court

support its determination that Dehlinger committed perjury for

the sole purpose of deceiving the jury regarding his culpability

and involvement with AAA. The district court therefore properly

sentenced Dehlinger.

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 III.

For the foregoing reasons, we affirm Dehlinger’s conviction

and sentence, without prejudice to any post conviction claim

based on ineffective assistance of counsel that appellant may

elect to pursue.

AFFIRMED

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