COURT OF APPEALS OF VIRGINIA
Present: Judge Bray, Senior Judges Duff and Overton
Argued at Alexandria, Virginia
LEWIS A. BROWN, JR.
OPINION BY
v. Record No. 2964-97-4 JUDGE CHARLES H. DUFF
JULY 27, 1999
COMMONWEALTH OF VIRGINIA
FROM THE CIRCUIT COURT OF WARREN COUNTY
Dennis L. Hupp, Judge
Thomas D. Logie for appellant.
Jeffrey S. Shapiro, Assistant Attorney
General (Mark L. Earley, Attorney General, on
brief), for appellee.
Lewis A. Brown, Jr., appellant, appeals his conviction for
grand larceny by false pretenses in violation of Code § 18.2-95.
He argues on appeal that the trial court erred in (1) denying
his motion to quash the indictment; and (2) denying his motions
to strike the evidence. Finding no error, we affirm the
conviction.
FACTS
With his 1994 state income tax return, appellant, an
accountant and owner of Front Royal Bookkeeping ("Front Royal"),
submitted W-2 forms claiming he was employed by Royal Cinemas
("Royal") and Tomorrow's Country Buffet ("Buffet") in 1994. The
W-2 forms indicated that appellant earned $15,500 in income from
Royal and $25,000 in income from Buffet in 1994. The W-2 forms
also indicated that Royal withheld $2,500 in state income tax
for appellant in 1994, and Buffet withheld $4,500 in state
income tax for appellant in 1994. As a result of these claims,
appellant received an additional $7,000 tax refund from the
Commonwealth of Virginia. Appellant was indicted for grand
larceny in violation of Code § 18.2-95.
At the trial, Francis Brooks, owner of Royal, a subsidiary
of B & B Enterprises ("B & B"), testified that, in 1993, Royal
filed for Chapter 11 bankruptcy and that appellant, Brooks'
friend, offered to help him in any way he could. Brooks said he
did not discuss compensation with appellant but assumed they
would "get to it later." Appellant was not on Royal's payroll,
and Royal did not receive a bill from appellant or pay appellant
or Front Royal for any services. Brooks testified that
appellant prepared tax documents and documents required by the
court for the bankruptcy proceedings.
In 1995, appellant attached a W-2 form to his state income
tax return indicating he had been paid $15,500 by Royal for his
services in 1994. Brooks testified that Royal did not pay
appellant $15,500 in 1994. Brooks first learned of a $15,500
debt allegedly owed appellant when a representative from the
Virginia Department of Taxation approached Brooks with questions
concerning appellant's 1994 W-2 form.
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Royal's 1994 payroll booklet did not list appellant as an
employee of Royal. Royal's quarterly tax report did not list
appellant as an employee. A proof of claim filed in bankruptcy
court indicated that Royal owed $5,541.50 to Front Royal, not
appellant individually.
Brooks also testified that, with the exception of a few
employees who were not compensated for their work in the last
week that Royal operated, all of Royal's employees were paid for
their work performed in 1994. Brooks also stated that, given
the financial condition of Royal in 1994, Royal could not have
afforded to pay someone $15,500 in 1994.
Ashrafullah Sayed, manager of Buffet, a/k/a Dinis Brothers
Restaurant, testified that, after filing for bankruptcy in early
1994, Buffet had a financial agreement with Front Royal for
accounting services. Buffet paid Front Royal monthly for
services. Buffet had no agreement with appellant personally.
Front Royal worked on "tax papers, payrolls, all of those" for
Buffet. Front Royal also prepared Buffet's W-2 forms.
Appellant attached a W-2 form to his 1994 state income tax
return indicating that Buffet paid him $25,000 in income in
1994. Sayed testified that Buffet did not pay appellant $25,000
in 1994. Buffet's 1994 W-4 forms, the withholding allowance
certificates for Buffet's employees, did not include a W-4 form
in appellant's name. Buffet's 1994 quarterly tax reports did
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not include appellant as an employee for whom state income tax
was withheld. Commonwealth's Exhibit No. 4 consisted of
Buffet's 1994 W-3 form, entitled "Transmittal of Wage and Tax
Statements 1994." Attached to the form were copies of Buffet's
employees' W-2 forms. A W-2 form in appellant's name indicated
that Buffet had paid appellant $10,000 in 1994, rather than the
$25,000 indicated on the W-2 form filed by appellant with his
1994 state income tax return. The withholding for state income
taxes on the W-2 form in Buffet's file was $2,000, rather than
$4,500, as indicated on the W-2 form filed by appellant with his
state income tax return.
With the exception of several employees who were not paid
in the last two weeks that Buffet operated, all of Buffet's
employees were paid in 1994 before the restaurant closed.
Invoices from Front Royal to Buffet for the months of July,
1994 through October, 1994 indicated that Buffet owed Front
Royal about $4,000 for accounting services. The invoices did
not indicate that Buffet owed any money to appellant,
personally.
John Hawse, an investigator for the Virginia Department of
Taxation, testified that independent contractors do not receive
W-2 forms from the place at which they perform services. Hawse
interviewed appellant about appellant's 1994 tax return.
Initially, Hawse did not mention anything about appellant's 1994
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W-2 forms. Appellant immediately volunteered that Hawse could
check with appellant's employers if he thought the W-2 forms
were "bogus." Appellant also told Hawse that he had worked as a
consultant for B & B (or Royal) and Buffet and that B & B should
have received an invoice from appellant for $15,500 in 1994.
Hawse also testified that appellant said he "had not been
paid the wages that were reported on the W-2's and that he
reported that in accordance with instructions from an IRS
agent." When questioned further by Hawse, appellant could not
recall the IRS agent's name, nor could he produce a tax ruling
or policy to support his actions.
Hawse interviewed appellant again at a later date. Hawse
advised appellant that both Sayed and Brooks had told Hawse that
they did not hire appellant as an employee. Appellant replied
that "they may be right" if they were referring to the fact that
they did not prepare appellant's W-2 forms. Appellant also told
Hawse that he thought he had filed a proof of claim with the
bankruptcy court in order to protect the $40,500 the two
companies allegedly owed him, but appellant never produced any
documents to support this claim.
Appellant also gave Hawse conflicting information on
whether he operated on a cash or accrual basis. In addition,
the withholding rate for state income taxes on appellant's filed
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W-2 forms was about 15% to 18%. Hawse testified that the
highest applicable withholding rate in Virginia is 5.75%.
Belinda Lang, office manager for Front Royal, testified
that she typed appellant's 1994 W-2 forms for Royal and Buffet
based on information she received from the businesses. Lang
could not explain why the W-2 form attached to Buffet's 1994 W-3
Transmittal of Wage and Tax Statements differed from the W-2
form attached to appellant's 1994 tax return. Lang testified
that she "usually" typed the W-2 forms, but that anyone in the
office had access to the forms. Lang stated that she prepared
the 1994 W-2 forms for Buffet's employees based on payroll
records provided to her by Buffet, with the exception of
appellant's W-2 form. She prepared appellant's W-2 form based
on information provided to her by the owner of Buffet. Lang did
not prepare bills for appellant for any consulting work he may
have personally performed, but she said that both Buffet and
Royal owed Front Royal money.
Ray Madaris, a manager with the Virginia Department of
Taxation, testified that as a result of appellant including the
alleged income and alleged withholding for state income taxes
that he claimed was paid by Royal and Buffet, appellant received
an additional state income tax refund of $7,000.
Appellant denied that he prepared the W-2 forms in
question. He testified that he did not know whether the
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companies actually paid the indicated withholding tax. He
denied that he personally performed bookkeeping services for
either Royal or Buffet. Appellant testified that he performed
"services as a bankruptcy consultant" for Buffet and that he was
an employee of the business. He stated that he assisted Royal
with marketing. Appellant testified that he never received cash
payment from either business, but that they partially paid him
with food, gas money, and "entertainment" expenses.
ANALYSIS
I. Motion to Quash the Indictment
Appellant argues that the trial court erred in denying his
motion to quash the indictment on the ground that his conduct of
allegedly filing a false state income tax return was punishable
only under Code § 58.1-348, and not Code § 18.2-95, the grand
larceny statute.
Code § 58.1-348 is entitled "Criminal prosecution for
failure or refusal to file return of income or for making false
statement therein; limitation." The statute provides, in
pertinent part:
Notwithstanding any other provisions of
this title and in addition to any other
penalties provided by law, any individual or
fiduciary required under this chapter to
make a return of income, who willfully fails
or refuses to make such return, at the time
or times required by law, or who, with
intent to defraud the Commonwealth, makes
any false statement in any such return,
shall be guilty of a Class 1 misdemeanor.
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(Emphasis added.)
"Well established 'principles of
statutory construction require us to
ascertain and give effect to the legislative
intent.'" Legislative intent is to be
determined by the words in the statute.
Absent ambiguity, "the manifest intent of
the legislature clearly expressed in its
enactments should not be judicially thwarted
under the guise of statutory construction."
Herrell v. Commonwealth, 28 Va. App. 579, 584, 507 S.E.2d 633,
636 (1998) (citations omitted).
In light of these principles, we hold that the language in
the first sentence of Code § 58.1-348 is not ambiguous. This
language clearly provides that the statute is not the exclusive
avenue for punishment for filing a false state income tax
return. Further, "[i]t is well established that the choice of
offenses for which a criminal defendant will be charged is
within the discretion of the Commonwealth's Attorney."
Kauffmann v. Commonwealth, 8 Va. App. 400, 410, 382 S.E.2d 279,
284 (1989). "[I]t is a matter of prosecutorial election whether
the Commonwealth proceeds under the misdemeanor statute or the
felony statute against an accused . . . ." Mason v.
Commonwealth, 217 Va. 321, 323, 228 S.E.2d 683, 684 (1976).
"Where the circumstances surrounding an offense permit
prosecution under either of two statutes, the selection of the
statute under which to proceed is a matter of prosecutorial
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election." Smith v. Commonwealth, 17 Va. App. 37, 41, 434
S.E.2d 914, 916 (1993).
The Commonwealth charged appellant with unlawfully taking
$7,000 from it as a result of filing a false state income tax
return. It was within the Commonwealth's Attorney's discretion
whether to prosecute appellant under Code § 18.2-95, the grand
larceny statute, or to prosecute him under Code § 58.1-348.
Accordingly, appellant's argument is without merit.
II. Sufficiency of the Evidence
"On appeal, 'we review the evidence in the light most
favorable to the Commonwealth, granting to it all reasonable
inferences fairly deducible therefrom.'" Archer v.
Commonwealth, 26 Va. App. 1, 11, 492 S.E.2d 826, 831 (1997)
(citation omitted). "'[W]hat inferences are to be drawn from
proved facts is within the province of the jury and not the
court so long as the inferences are reasonable and justified.'"
Higginbotham v. Commonwealth, 216 Va. 349, 352-53, 218 S.E.2d
534, 537 (1975) (citation omitted).
"To sustain a conviction of larceny by false pretenses, the
Commonwealth must prove: (a) that the accused intended to
defraud; (b) that a fraud actually occurred; (c) that the accused
used false pretenses to perpetrate the fraud; and (d) that the
false pretenses induced the owner to part with his property."
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Wynne v. Commonwealth, 18 Va. App. 459, 460, 445 S.E.2d 160, 161
(1994) (en banc).
The evidence showed that neither Royal nor Buffet considered
appellant to be an employee. No tax records, payroll reports, or
other paperwork from Royal suggested that appellant was on
Royal's payroll. In fact, Brooks testified that he never
discussed a fee arrangement with appellant concerning work
appellant performed for Royal.
Buffet had no payroll report, W-4 form, or quarterly tax
report indicating that appellant was an employee. Buffet's
records contained a copy of a 1994 W-2 form in appellant's name
that indicated a lower amount of income paid and a lower amount
of withholding for state income tax than the W-2 form filed by
appellant with his 1994 state income tax return. Sayed testified
that Buffet had an arrangement with Front Royal to pay by the
month for services, but that it had no such agreement with
appellant individually.
Both companies were in bankruptcy proceedings when they
began working with appellant, and both companies were unable to
pay some of their employees during their last weeks of
operations. Furthermore, appellant admitted that he did not
receive the income from Buffet and Royal as indicated on his 1994
W-2 forms. Moreover, given the financial status of Buffet, the
jury could reasonably infer that Buffet did not contract with
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appellant for $25,000 worth of accounting services as indicated
on appellant's filed 1994 W-2 form. Likewise, given the
financial status of Royal, the jury could infer that Royal did
not contract with appellant for over $15,000 worth of accounting
services as claimed on appellant's filed 1994 W-2 form.
In addition, Front Royal, appellant's accounting business,
filed a proof of claim against Royal in the bankruptcy court for
only $5,541 worth of unpaid services, not $15,500. Appellant
personally filed no proof of claim for any unpaid services
rendered to either Royal or Buffet.
Neither the businesses nor appellant produced invoices from
appellant or Front Royal indicating that the bankrupt businesses
owed appellant the sums of money indicated on the filed W-2
forms. Indeed, invoices from Front Royal to Buffet indicated an
outstanding balance of only about $4,000 for the months of July,
1994 through October, 1994.
From the evidence presented, the jury could conclude beyond
a reasonable doubt that appellant was not an employee of either
Buffet or Royal. Furthermore, appellant admitted that he was not
paid the income indicated on the W-2 forms. Although Lang
testified that she "usually" prepared the W-2 forms for Front
Royal, she was unable to explain the discrepancy between the
amount shown on appellant's filed W-2 form from Buffet and the
amount shown on the W-2 form from Buffet's records. Lang further
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testified that anyone in Front Royal's office had access to the
W-2 forms and could have completed one without her knowledge.
Moreover, the W-2 forms filed by appellant were suspect because
the withholding amount for state income taxes on those forms was
15% to 18%, whereas the evidence proved that the highest
applicable withholding rate in Virginia is 5.75%. Thus, the jury
could infer beyond a reasonable doubt that appellant falsified
the filed W-2 forms, despite appellant's claim that he did not.
"In its role of judging witness credibility, the fact finder is
entitled to disbelieve the self-serving testimony of the accused
and to conclude that the accused is lying to conceal his guilt."
Marable v. Commonwealth, 27 Va. App. 505, 509-10, 500 S.E.2d
233, 235 (1998).
Therefore, from the evidence presented, the jury could
conclude beyond a reasonable doubt that appellant knowingly and
falsely represented his status as an employee of Royal and Buffet
and that he knowingly and falsely represented the information on
his filed 1994 W-2 forms concerning Buffet and Royal. In
addition, the jury could infer beyond a reasonable doubt that
appellant filed his falsified 1994 tax return with the intent to
defraud the Commonwealth of Virginia of money by obtaining a
greater state income tax refund than that to which he was
entitled. The evidence proved that appellant received an
additional $7,000 state income tax refund from the Commonwealth
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as a result of the false information he filed concerning Buffet
and Royal. Therefore, the evidence was sufficient to prove
beyond a reasonable doubt that appellant committed grand larceny
by false pretenses.
Appellant also contends that, in order to prove that he
received something to which he was not entitled, the
Commonwealth had to prove that Royal and Buffet did not pay to
the Commonwealth the sums of state income withholding tax
indicated on the filed W-2 forms. Appellant argues that the
Commonwealth did not research all of the names under which the
two businesses operated during the time in which the withholding
tax could have been paid by the businesses. However, on the
record before us, nothing in the documents from Royal indicated
that appellant was employed by Royal in 1994 or that Royal paid
any withholding state income taxes for appellant in 1994.
Although Buffet's records contained a copy of a W-2 form in
appellant's name for 1994, the amount of income and withholding
tax on Buffet's copy of the W-2 form were less than the amounts
indicated on the W-2 form filed by appellant. Furthermore,
Buffet's payroll records did not indicate that appellant was an
employee. Thus, the evidence excludes any reasonable hypotheses
of innocence. "[T]he Commonwealth need only exclude reasonable
hypotheses of innocence that flow from the evidence, not those
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that spring from the imagination of the defendant." Hamilton v.
Commonwealth, 16 Va. App. 751, 755, 433 S.E.2d 27, 29 (1993).
The evidence proved that appellant intentionally filed a
falsified 1994 state income tax return and falsified W-2 forms
and that he received a state income tax refund in excess of $200
from the Commonwealth of Virginia to which he was not entitled.
These circumstances are sufficient to prove beyond a
reasonable doubt that appellant committed the charged offense.
For these reasons, we affirm the conviction.
Affirmed.
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