F I L E D
United States Court of Appeals
Tenth Circuit
UNITED STATES COURT OF APPEALS
FEB 18 1998
TENTH CIRCUIT
PATRICK FISHER
Clerk
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
v. No. 96-5189
(D.C. No. 96-CR-16-H)
JAMES E. SUTTON, (N.D. Oklahoma)
Defendant-Appellant.
ORDER AND JUDGMENT*
Before BALDOCK, LOGAN, and LUCERO, Circuit Judges.
After examining the briefs and appellate record, this panel has determined
unanimously to grant the parties’ request for a decision on the briefs without oral
argument. See Fed. R. App. P. 34(f); 10th Cir. R. 34.1.9. The case is therefore ordered
submitted without oral argument.
Defendant James E. Sutton appeals following his conviction by a jury on one count
of submitting false documents to the Internal Revenue Service in violation of 18 U.S.C.
*
This order and judgment is not binding precedent, except under the doctrines of
law of the case, res judicata, and collateral estoppel. This court generally disfavors the
citation of orders and judgments; nevertheless, an order and judgment may be cited under
the terms and conditions of 10th Cir. R. 36.3.
§ 1001. The false documentation purported to substantiate defendant’s tax basis in his
residence1 for purposes of net operating loss carry forward deductions on income tax
returns. His 1990 and 1991 income tax returns, filed jointly with his spouse, claimed net
operating loss carryover deductions from that loss. During an audit, defendant submitted
false documentation that represented the tax basis in the residence as approximately
$201,000, rather than $155,000. Appellant’s Br. at 12 (referencing that defendant
admitted documents were falsified). On appeal defendant raises three alleged district
court errors.
Defendant first argues that the district court abused its discretion in excluding
expert testimony. Defendant attempted to present testimony from a tax expert explaining
an alternative tax basis computation for the residence. The expert would have testified
that, despite the discrepancy in documentation provided in response to the audit,
defendant correctly reported his tax liability in 1990 and 1991 because he made
improvements that increased the residence’s value. The district court excluded this
evidence, finding that computations of an alternative tax basis were not relevant to the 18
U.S.C. § 1001 charge that defendant made false representations during his audit.
The government need not prove pecuniary loss to establish a § 1001 violation,
United States v. Gilliland, 312 U.S. 86, 93 (1941) (explaining amendments to § 1001 that
broadened its application); rather, the gravamen of a § 1001 prosecution is false
1
Defendant’s personal residence was destroyed by a fire in 1989.
2
documentation. Thus, it would be of no consequence if defendant were to establish the
accuracy of the tax liability in his 1990 and 1991 tax returns using different
documentation than originally submitted in the audit. Defendant’s proffered expert
testimony explaining an alternate method of establishing the tax basis in his property was
irrelevant.
Defendant next argues that the district court abused its discretion by admitting
certain impeachment evidence. The district court permitted two individuals to testify
about the approximate cost of remodeling or other improvements they performed on
defendant’s residence. The district court allowed the government to impeach one of those
defense witnesses, Ernie Hallmark, with evidence that he had pleaded guilty to conspiracy
to commit grand larceny, a felony.
Federal Rule of Evidence 609 generally permits use of prior felony convictions to
impeach a witness but contains an exception as follows:
(c) Effect of pardon, annulment, or certificate of rehabilitation.
Evidence of a conviction is not admissible under this rule if (1) the
conviction has been the subject of a pardon, annulment, certificate of
rehabilitation, or other equivalent procedure based on a finding of the
rehabilitation of the person convicted, and that person has not been
convicted of a subsequent crime which was punishable by death or
imprisonment in excess of one year, or (2) the conviction has been the
subject of a pardon, annulment, or other equivalent procedure based on a
finding of innocence.
Fed. R. Evid. 609(c).
3
The Oklahoma state court imposed a deferred sentence on Hallmark that defendant
claims was expunged after Hallmark completed that sentence. Defendant asserts that
under Oklahoma law this is not treated as a conviction and should be subject to the
exclusion of Rule 609(c). We held in United States v. Turner, 497 F.2d 406, 407 (10th
Cir. 1974), that a guilty plea on Oklahoma state charges is treated as a conviction even if
it results in a deferred sentence. Defendant argues that Turner does not control because it
was decided before the evidence rules became effective on January 2, 1975. Although
Turner predated the effective date of the rules, it was decided eighteen months after the
Supreme Court promulgated the rules, pending express congressional approval. See 1974
U.S.C.C.A.N. 7051, 7052 (1974) (legislative history explaining Supreme Court
promulgation, with July 1, 1973 effective date, and congressional action deferring that
effective date until full approval by Congress); Pub. L. No. 93-595, 1974 U.S.C.C.A.N.
(88 Stat. 1926) 2215. But even if Turner is not controlling and the district court erred in
allowing the impeachment, the error was harmless because the witness’ testimony was
irrelevant to the controlling issue whether defendant submitted false documentation.
Finally, defendant argues that the district court erred in rejecting his proposed jury
instructions. We review jury instructions to determine whether as a whole they correctly
state the law and fairly cover the issues presented. United States v. Janus Industries, 48
F.3d 1548, 1559 (10th Cir. 1995). The proffered instructions would have allowed the jury
to find for defendant if it concluded that defendant accurately reported his tax basis in the
4
destroyed residence. A defendant is only entitled to instructions on a defense if there is
sufficient evidence in the record for the jury to return a verdict on that basis. United
States v. Grissom, 44 F.3d 1507, 1512 (10th Cir. 1995). We have already concluded that
the district court correctly rejected testimony that would support this theory. The district
court did not err in also rejecting the related jury instructions.
AFFIRMED.
Entered for the Court
James K. Logan
Circuit Judge
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