FILED
United States Court of Appeals
Tenth Circuit
March 12, 2008
PUBLISH Elisabeth A. Shumaker
Clerk of Court
UNITED STATES COURT OF APPEALS
TENTH CIRCUIT
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
v. No. 06-4232
JAMES THOMPSON,
Defendant-Appellant.
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
v. No. 06-4256
THOMAS E. MOWER,
Defendant-Appellant.
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
v. No. 06-4258
LESLIE D. MOWER,
Defendant-Appellant.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF UTAH
(D.C. No. 2:02-CR-787-K)
Scott C. Williams, Salt Lake City, Utah, for Defendant-Appellant, James
Thompson.
Max D. Wheeler (Rodney R. Parker and Sam Harkness with him on the briefs), of
Snow, Christensen & Martineau, Salt Lake City, Utah, for Defendant-Appellant
Thomas E. Mower.
Denver C. Snuffer, Jr. of Nelson, Snuffer, Dahle & Poulsen, P.C., Sandy, Utah,
for Defendant-Appellant, Leslie D. Mower.
Gregory Victor Davis, Attorney, Tax Division, United States Department of
Justice, Washington, D.C., (Richard T. Morrison, Acting Assistant Attorney
General; Alan Hechtkopf, Attorney, Tax Division, United States Department of
Justice, Washington, D.C.; and Troy A. Eid, United States Attorney, District of
Colorado, Denver, Colorado, of Counsel, with him on the briefs), for Plaintiff-
Appellee.
Before KELLY, McWILLIAMS, and BRISCOE, Circuit Judges.
BRISCOE, Circuit Judge.
Defendants Thomas Mower and Leslie Mower appeal their convictions of
one count of conspiracy to defraud the United States, in violation of 18 U.S.C. §
371, and six counts of tax evasion, in violation of 26 U.S.C. § 7201, for the years
1992 through 1997. Defendant James Thompson appeals his conviction of one
count of conspiracy to defraud the United States, in violation of 18 U.S.C. § 371,
and one count of corruptly endeavoring to interfere with the administration of
internal revenue laws, in violation of 26 U.S.C. § 7212(a). Thomas Mower argues
that (1) the evidence was insufficient to convict him of tax evasion for the years
2
1992, 1993, and 1997; (2) the district court erred in admitting the government’s
summary charts; and (3) the district court erred in compelling Thomas Mower’s
attorney, Allen Davis, to testify before the grand jury. Leslie Mower contends
that (1) the evidence was insufficient to convict her of all counts; (2) the district
court erred in admitting the government’s summary charts; (3) her sentence was
procedurally and substantively unreasonable; (4) the district court erred in not
giving certain jury instructions; (5) the statute of limitations barred four of the
counts of tax evasion, for the years 1992 through 1995; (6) her sentence violated
the ex post facto clause; and (7) the district court erred in denying her motion for
severance. James Thompson argues that (1) the evidence was insufficient to
convict him of either count; (2) the statute of limitations barred both counts; and
(3) the district court erred in denying his motion for severance. We exercise
jurisdiction under 28 U.S.C. § 1291 and affirm.
I.
On December 19, 2002, Thomas Mower and his wife, Leslie Mower, were
indicted on one count of conspiracy to defraud the United States, in violation of
18 U.S.C. § 371, and six counts of tax evasion, in violation of 26 U.S.C. § 7201,
for the tax years 1992 through 1997. On April 8, 2003, the grand jury returned a
Superseding Indictment, adding charges against James Thompson for one count of
conspiracy to defraud the United States, in violation of 18 U.S.C. § 371, and one
count of corruptly endeavoring to interfere with the administration of internal
3
revenue laws, in violation of 26 U.S.C. § 7212(a).
Defendants Thomas and Leslie Mower owned three corporations—Neways
US, Neways Australia, and Neways Malaysia 1—each of which utilized a multi-
level marketing system to sell a variety of personal care products. In a multi-
level marketing system, the company manufactures or purchases product and sells
it to distributors, who purchase the product at a discount and make money by
selling it to the public at retail price. Distributors receive bonuses by signing up
other distributors to sell product. Distributors who have recruited new
distributors also receive bonuses as a result of sales by distributors beneath them
in the “downline.” Individuals at the top of a Neways downline could make
between $25,000 and $35,000 per month. The Mowers had a downline in Neways
US called “Base of the Tree,” and a distributorship in Neways US called “Mower
Partnership.”
Thomas Mower was the president of Neways US, and he was in charge of
running the company—“the go-to person.” Neways employees regularly
discussed the financial status of the company with him, and he made most of the
decisions for Neways US. Randy Lindstrom, a former general manager of
Neways US, testified that Thomas Mower had a basic understanding of
accounting, as evidenced by their conversations about income and expenses.
1
Neways US is located in Utah and was originally named “Images &
Attitudes.”
4
According to Lindstrom, Thomas Mower “didn’t like to pay taxes.”
Leslie Mower also made decisions on a daily basis for Neways US,
although she dealt more with distributors than with sales. In the early 1990s, she
had virtually no involvement with the financial side of the business. Later, for a
period during the mid-1990s, she became Chief Financial Officer of Neways US, 2
even though she did not have any expertise in accounting or finance, and she had
some difficulty understanding the company’s financial statements. She would
sometimes pay the corporation’s bills, but she mostly just promoted the product.
Because of its rapid growth in the early 1990s, Neways US was very
heavily indebted to creditors and needed money for operating expenses. The
Mowers did not want to borrow working capital from a bank, so they instead tried
to solve the company’s money problems by bringing in cash from Neways
Australia. Thomas Mower began meeting with his attorneys to determine how to
get money out of Neways Australia without paying taxes on it. Soon, Neways US
began receiving hundreds of thousands of dollars from Neways Australia, which
Neways US recorded as pre-payment for product that it later sent to Neways
Australia. In addition to these pre-payments, Neways US received other amounts
from Neways Australia that it classified as loans.
Neways Australia had two primary bank accounts: an operating account and
2
The corporation’s bylaws did not actually provide for a position called
“Chief Financial Officer,” but she referred to herself as such.
5
a bonus checking account. It paid for its day-to-day operations—including bills,
payments for product, salaries, and royalty payments to Neways US—from its
operating account. Every month, it paid distributor bonuses from the bonus
checking account. When examined, the books and records at Neways Australia
were found to be in poor condition.
At the top of the Neways Australia downline were seven distributorships:
Images, Inc. 1 through 7, which later became Neways, Inc. 1 through 7, and then
Mower Properties, Inc. 1 through 7. 3 Marija Lee, a former employee at Neways
Australia and Neways Malaysia, testified that John Hunter, the then-CEO of
Neways Australia, asked her to place these distributorships at the top of the
Neways Australia downline. Thomas Mower had originally wanted to set up the
Neways Australia downline like the Neways US downline, but John Hunter
advised him to create these seven entities to absorb more bonus payments than
one entity alone could absorb. These amounts are known in the industry as
“breakage.” The Neways 1 through 7 distributorships did not have to sell product
to receive commissions, and they were structured to absorb any bonuses that
would otherwise flow up to the company itself. Mr. Hunter had several
3
Individually, these were: Images, Inc. 1; Images, Inc. 2; Images, Inc. 3;
Images, Inc. 4; Images, Inc. 5; Images, Inc. 6; and Images, Inc. 7. When their
names later changed to Neways, and then to Mower Properties, they stayed as
seven separate entities. We will largely refer to these entities collectively, as
“Neways 1 through 7.”
6
conversations with Thomas Mower regarding Neways 1 through 7, and the need
for Neways US to get money from Neways Australia. He assumed the
commission payments to Neways 1 through 7 were going to Neways US, because
that was why they set up Neways 1 through 7 in the first place. The Neways 1
through 7 entities received commission checks and later, wire transfers, from
Neways Australia’s bonus checking account. On its books and records, Neways
Australia treated these payments as expenses.
Michael Cunningham, a former CEO of Neways Australia, did not know
what happened to the commission checks for the Neways 1 through 7 entities after
Neways Australia sent the checks to Utah. Marija Lee testified that she sent them
to Utah, and none of the checks were ever voided. John Hunter testified that he
sent the checks directly to Thomas and Leslie Mower in Utah, although he had no
idea what happened to them after they reached the United States. When the
checks were late a couple of times, Leslie Mower called Mr. Hunter to ask
whether they had been mailed. Once, when the Mowers visited Australia, they
asked Mr. Hunter to sign some of the checks over to cash, and he obliged.
Neways 1 through 7 distributorships were also set up at the top of the
Neways Malaysia downline, and Neways Malaysia sent the commission checks
for these distributorships to the United States. At trial, the government
introduced commission checks from Neways Malaysia to several of the Neways 1
through 7 distributorships in 1994 and 1995, as well as registers of commission
7
checks from Neways Malaysia for 1996 and 1997. In 1996, the register showed
commission checks issued to Neways 1 through 7, as well as Mower Properties 1
through 7, and these entities had the same identification numbers. 4 In 1997, the
register showed checks to five other entities with these same identification
numbers: Rezults, N. Trust, N. Properties, Eclat, and CC Corp.
Patricia Sandberg, Thomas Mower’s former secretary, testified that the
Mowers had distributorships in Australia and Malaysia, and she saw checks from
these distributorships. Commission checks from Australia and Malaysia arrived
once a month through the mail, in envelopes addressed to Thomas Mower
personally. A downline report accompanied the checks, and the checks
corresponded to amounts on the downline report. Ms. Sandberg understood the
commission checks to be from distributorships that the Mowers had in Neways
Australia and Neways Malaysia. Usually, she gave the checks to Thomas Mower;
sometimes, he gave them back, and she deposited them in an account for
“Rezults,” per his instructions. Thomas Mower always had the checkbook for the
Rezults account in his possession, and he had signatory authority over the
account. Neways US had no records for this account. Ms. Sandberg did not
know what the Rezults account was used for, but she thought some of the money
4
The check registers listed the identification numbers in the column
reserved for each payee’s Social Security number. For example, both Neways,
Inc. 1 and Mower Properties, Inc. 1 had the identification number XXX-XX-XXXX on
the check registers.
8
may have gone toward the purchase of a warehouse constructed for Neways US.
The corporate accounting department at Neways US never saw the commission
checks from Australia and Malaysia, never came to ask about them, and never
knew that she deposited them. Annette Jenkins, who worked in the accounting
department until 1998, testified that, to her knowledge, Neways US never
received any commission checks.
Patricia Sandberg also identified several commission checks from Neways
US, payable to the following people and entities: Thomas Mower; Neways
Independent Distributorship Adpool; Base of the Tree; Brett Mower 5; Lead
Allocation, Darrid; MP Trust; Orphanage; MP Enterprises; and BW Enterprises.
All of these were endorsed, in some capacity, by Thomas or Leslie Mower, or in
Thomas or Leslie Mower’s handwriting. In addition, David Bevans, who worked
in the IT department at Neways US in 1996 and 1997, testified that he gave bonus
reports to Leslie Mower and that she would sometimes stop by the IT department
to pick up distributor checks, asking, “Are my checks ready?”
Another entity, Mower Properties, Inc., was the property holding company
for Neways US. Neways US leased much of its real property from Mower
Properties, including a manufacturing facility, office space, and a warehouse.
Karin Lane, who worked in the Neways US accounting department, testified that
5
Brett Mower is the Mowers’ son.
9
she did the accounting work for Mower Properties. During the years 1994, 1995,
and 1996, the Mower Properties bank account received monies via wire transfer
from Neways Australia. Ms. Lane thought they were loans or loan proceeds from
Australia, and she treated them as such on Mower Properties’ financial records.
Between October 17, 1994, and July 17, 1996, a total of $736,759 was wired from
Neways Australia into the Mower Properties account.
In 1993 or 1994, the Mowers purchased a property called Hobble Creek.
David Simpson, the real estate broker for the transaction, testified that he dealt
mostly with Thomas Mower. The purchase price for the property was $650,000,
of which the Mowers paid $141,621 as a down payment. They paid the remaining
$508,379 of the balance within one year of the purchase. The Mowers paid for
the property using checks in U.S., Australian, and Malaysian currency, so the
parties to the transaction set up a trust account at First Security Bank. The
Mowers would deposit the checks into the trust account, and the bank would
convert the amounts to U.S. dollars and issue a new check to the sellers of the
property. Almost all of the Mowers’ checks were Australian or Malaysian
commission checks payable to the Neways 1 through 7 entities. One of the
checks was a U.S. commission check for $54,427.56, payable to Thomas Mower.
Mr. Simpson testified that he would pick up the checks from Thomas Mower
personally, and not from anyone in corporate accounting at Neways US. The
warranty deed for the property stated that the sellers “hereby convey and warrant
10
to Thomas Mower, trustee of the Mower Family Trust.” The Mower Family Trust
is a trust controlled by several members of the Mower family, and the Mowers’
personal residence was held by the Mower Family Trust.
John Hunter learned about Hobble Creek in 1994. Thomas Mower told him
that it was a piece of property they were going to acquire, and he wanted to build
a new house on the property, in part because he wanted room to display full-sized
animal trophies. Leslie Mower also wanted to move, because she wanted more
space for her horses. John Hunter did not know how the property was ultimately
used, and he testified that multi-level marketing companies sometimes purchase
recreational properties. David Simpson testified that Thomas Mower talked about
building a house on the property, although Thomas Mower also stated that he
wanted to use the property for corporate retreats and to entertain corporate guests.
There was no house on the property at the time of sale, and no house was built
after the sale. 6 The property was eventually used for some corporate functions.
On March 27, 1997, Agent Elder of the IRS arrived at the Neways US
headquarters, looking for Thomas Mower. Patricia Sandberg and Agent Elder
testified that Ms. Sandberg was the only person present when Agent Elder arrived,
and she told him that Thomas Mower was unavailable. Allen Davis testified, on
6
Mr. Simpson also sold a contiguous piece of property to other members of
the Mower family. This property has a barn with a “Neways” sign on it, and a
pavilion was built on this property for entertaining. Mr. Simpson did not know
who presently owned the property.
11
the other hand, that when the IRS arrived, the legal department was notified, and
he went to the lobby with James Thompson to meet with Agent Elder. James
Thompson, who was then an attorney for Neways US, told Agent Elder that
Thomas Mower was not present—which was untrue—and that they could set up a
meeting for a later time. After Agent Elder left, James Thompson and Allen
Davis went to Thomas Mower’s office and told him that the IRS was
investigating. They informed Thomas Mower that he could either cooperate or
refuse to cooperate, and he told them to cooperate.
Thomas Mower also told Allen Davis and James Thompson that Hobble
Creek might be an issue. Allen Davis and James Thompson began searching the
legal and accounting records for documentation of the purchase. They did not
find anything, but they knew it had been purchased with funds from Australia.
Prior to Agent Elder returning a second time, they called Mr. Cunningham in
Australia to try to determine the details of the transaction and whether there was
any supporting documentation. Thomas Mower participated in the call. Mr.
Cunningham informed them that the monies used to purchase Hobble Creek were
commission payments, not a loan. Thomas Mower disagreed with this
assessment; he believed that the monies were a loan from Neways Australia and
that Neways Australia had recorded them incorrectly.
Before Agent Elder returned, Allen Davis, James Thompson, and Thomas
Mower discussed whether there was any documentation of a loan from Neways
12
Australia for the purchase of Hobble Creek. When they could find none, James
Thompson decided to create a document to support the loan. The document that
he created, however, was back-dated to January 6, 1994. Thomas Mower signed
the loan document, which stated that Neways Australia had loaned $650,000 to
the Mower Family Trust for the purchase of Hobble Creek.
When Agent Elder returned, he met with Thomas Mower, Allen Davis, and
James Thompson. Thomas Mower told Agent Elder that he did not have any
distributorships in the Neways US downline. He told Agent Elder that he did not
receive any checks for any distributorships, and that he left with the company any
monies to which he might be entitled. He also stated that he did not know what
MP Trust was. Although Thomas Mower disclosed several individual and
corporate bank accounts to Agent Elder, he did not mention the Rezults account.
Thomas Mower also told Agent Elder that Hobble Creek had been
purchased with a loan from Neways Australia. When Agent Elder asked for
documentation, James Thompson and Allen Davis left the room to retrieve the
newly created loan document. Upon their return, James Thompson handed a
folder to Thomas Mower, who reviewed the loan document and handed the folder
to Agent Elder. No one told Agent Elder that the loan document was back-dated.
Allen Davis later told Leslie Mower about the back-dated loan document, and he
continued to keep Leslie Mower apprised of the situation, although she was not
directly involved in it.
13
After the meeting, Allen Davis and James Thompson continued searching
for documentation, and they attempted to gather additional information from the
accounting department and Neways Australia. They continued to have phone
conversations with Michael Cunningham in Australia, and they kept Leslie
Mower apprised of what was happening. They verified that Neways Australia had
treated the Hobble Creek monies as commission payments, rather than as a loan.
They determined that, because the property was in the name of the Mower Family
Trust, and because they believed that Thomas Mower was the payee on the
commission checks, the income was personal income to the Mowers, and the
Mowers needed to amend their individual income tax returns.
For his part, Agent Elder traveled to Australia to investigate the payments
made by Neways Australia. Thomas Mower gave him permission to review the
books of Neways Australia, but no one informed Agent Elder that there was
actually no Hobble Creek loan. On October 31, 1997, Allen Davis wrote a letter
to Agent Elder, informing him that Neways Australia had not properly recorded
the money as a loan, and that they were amending the Neways US corporate tax
returns to reflect the amounts. This letter was the first time anyone informed
Agent Elder that Neways Australia might not have recorded these monies as a
loan, or that Hobble Creek was an asset of Neways US rather than the Mower
Family Trust. During his investigation at Neways Australia, Agent Elder found
no evidence that a loan had been made to anyone—including the Mower Family
14
Trust, Mower Properties, or the Mowers personally. When he returned from
Australia, he told Allen Davis that Neways Australia had not recorded the
payments as a loan. He also interviewed Leslie Mower sometime in 1998, and
she told him that she directed the financial operations of Neways US and that
anything financial at Neways US would have to go through her.
Meanwhile, in the aftermath of the meeting with Agent Elder, James
Thompson contacted Agent Elder and left two telephone messages on his
answering machine. The first was on April 4, 1997, and stated:
Hello, this is James Thompson, calling, uh . . . uh . . . on behalf of
Tom Mower, uh . . . we have been going through documents and-and
things that . . . trying to get whatever else might be available in this
matter. Uhm, I thought I should call you and just talk to you.
Basically to let you know that, uhm . . . uh . . . we have been unable
to find anything new, uhm . . . I’m not sure what we would be
looking for new. Uhm, I believe you have everything, uhm . . .
apparently what happened, what you thought happened did happen,
uh, the checks came, uhm . . . he signed them over directly, uh-uhm .
. . got the loan from the, uh . . . Australian organization and, uh . . .
must pay that back, uh . . . within five years thereof, I believe that
answers all your questions, uhm . . . we’ve gone through everything
and haven’t been able to find anything more. So . . . I’m not sure
what more we would be looking for at this point. But if there’s
something specifically . . . uh, that you want us to find on that deal,
let us know, but-but actually that pretty much covers it, I think. So,
if you’ll call me back at four two three twenty-eight hundred (423-
2800), again, this is James Thompson and, uh . . . and we’ll see
where we need to go. Okay? Thanks a lot, bye-bye.
Tr. at 705-09; Gov’t Ex. 21-5, 21-5A. The second message was on April 8, 1997,
and stated:
Hi, Ted. James Thompson here. Uhm . . . I was just looking over
15
the file again, uh . . . we’ve been running around seeing if we can’t
find anymore documents and we’ve been unable to do so . . . uh, just
like the message I left you the other day. I’m not sure what else that-
that we might be looking for that would interest you. Uhm . . . so far
we just have not found any other documents. So, if you could let me
know what you prefer as you know we’re . . . we have several
summonses that, uh . . . that would be quite burdensome if we tried
to produce all of that information and you did mention there were
other properties that you might be interested in getting information
on, but as I understood it, as you left, really you wanted to focus on
the Hobble Creek property and so that’s what we’ve been focusing on
and I got the feeling from you that . . . that if you were satisfied, uhm
. . . about the facts surrounding that, that you wouldn’t . . . that you
wouldn’t really care to, uh . . . make us dig into everything else, uh .
. . so I haven’t, I haven’t dug into anything else yet. But I wanted
you to know that I’m not just ignoring you, that, uh . . . that I want to
do whatever you . . . want to do on this. Because you’re within your
right to ask for certain information, but, uh . . . just because of the
burden, I hope to avoid it. So, you let me know if you would. I’m,
again, James Thompson at four two three twenty-eight hundred (423-
2800). Uh, and again . . . I assume, you know, this is the . . . uh . . .
(CHUCKLES) . . . the Tom Mower matter and, uh . . . if there’s
anything I can do, let me know, but I don’t want to just keep you
hanging out there, all right? Thanks a lot. Bye-bye.
Tr. at 705-09; Gov’t Ex. 21-5, 21-5A. Agent Elder testified that he viewed these
messages as an attempt by James Thompson to represent that they had given him
everything, and that he did not need to investigate further.
For his part, Michael Cunningham testified that he participated in a
conference call with Thomas Mower, Allen Davis, and Karin Lane, in which
Thomas Mower asked Mr. Cunningham if Neways Australia had any
16
documentation for a loan from the Mowers to Neways Australia. 7 Ms. Lane also
sent a fax to Neways Australia on October 13, 1997, inquiring as to whether they
had found any documentation for a loan. John Dwyer, an in-house accountant at
Neways Australia, prepared a response, dated October 17, 1997, in which he
stated:
All payments from [Neways Australia] to Thomas Mower are for
BONUSES for the Mower downline paid from the MLM system. To
my knowledge no Loan was made to Neways Australia and the
majority of the payments listed were not Loan repayments but are
BONUS payments for the Mower Australian downline.
Tr. at 213, 215, 421-22; Gov’t Ex. 20-13. 8 In addition, Mr. Cunningham testified
that he was not aware of any loans between Neways Australia and the Mowers
personally, or between Neways Australia and the Mower Family Trust or Mower
Properties. John Hunter similarly testified that Neways Australia never loaned
money to the Mowers individually, or to the Mower Family Trust, Mower
7
Allen Davis testified that Thomas Mower viewed the Hobble Creek
monies as a loan from Neways Australia, whereas Mr. Cunningham’s testimony,
Mr. Dwyer’s fax, and Ms. Lane’s testimony stated that Thomas Mower viewed
other monies as repayment for a loan from Thomas Mower to Neways Australia.
This distinction probably results because Mr. Cunningham, Mr. Dwyer, and Ms.
Lane were mostly testifying about the monies wired to the Mower Properties
account—not the Hobble Creek monies—but it is not entirely clear from the
testimony.
8
Mr. Cunningham and Allen Davis testified that, in referring to the
“Mowers,” John Dwyer’s response may have been referring to the companies
themselves, because people in the Neways companies often failed to distinguish
between the companies and the Mowers personally. Mr. Cunningham further
testified that his testimony was consistent with Neways US owning the Neways 1
through 7 distributorships.
17
Properties, or Neways 1 through 7. Moreover, Mr. Hunter testified that Neways
Australia would not have made loan payments with commission checks.
Karin Lane likewise testified about the conference call and the alleged
loan. Part of the conference call dealt with the characterization of the monies
wired to the Mower Properties account. She originally thought that these were
loan proceeds, but Mr. Cunningham told her that they were distributor income.
She realized that she had incorrectly characterized the monies on Mower
Properties’ tax returns and that she would have to amend the returns. However,
the returns were never amended.
After Ms. Lane received the fax from John Dwyer, she decided to amend
the Mowers’ individual income tax returns to include the monies wired to the
Mower Properties account. These monies included $44,209.59 in 1994,
$449,095.13 in 1995, and $328,593.15 in 1996, for a total of approximately
$821,897. Ms. Lane also found a check for $54,427, dated March 20, 1994, and
payable to Thomas Mower, which she included in the Mowers’ income. From this
information, a hired accounting firm prepared 1040Xs for the years 1994, 1995,
and 1996, stating that the Mowers’ owed $39,220, $181,177, and $128,841 in
taxes, penalties, and interest for those years, respectively. A later review by the
IRS indicated that the amended returns primarily addressed payments made to the
Mower Properties account.
The Mowers, however, never filed the amended individual income tax
18
returns. Thomas Mower decided not to file them, and Allen Davis told Karin
Lane that the beneficiary of the monies was actually Neways US, and not Mower
Properties or the Mowers personally. Allen Davis testified that he had originally
thought that Thomas Mower was the payee on the commission checks. This was
actually not the case, and when Allen Davis discovered that the payees were the
Neways 1 through 7 entities, he recommended to Thomas Mower that the Mowers
not file the amended individual returns. Instead, Thomas Mower decided to file
amended corporate returns for Neways US, reporting additional income of
$283,934.30 for 1994 and $247,233.18 for 1995. They filed the returns in early
1998, and paid the taxes, penalties, and interest owing on the additional income.
Thomas Mower remained adamant, though, that the monies were loans and not
commissions. Allen Davis informed Leslie Mower about these decisions, and she
signed amended corporate returns for Neways US on January 6, 1998.
Karin Lane testified that, even though certain monies were wired directly
into the Mower Properties account, they submitted the amended corporate tax
returns for Neways US to account for these monies because Neways US was the
actual beneficiary—and the amounts were loans from Neways US to Mower
Properties. When she filed the amended returns for Neways US, Karin Lane did
not yet know about certain other monies. For instance, she did not know about
the Rezults account. She did not know about Hobble Creek. She did not know
about the commission checks from Neways Malaysia or from Neways Australia.
19
Eventually, when she found out about Rezults and Hobble Creek, she had to ask
the accounting firm to prepare another set of amended returns.
Finally, Ms. Lane testified that, when she was preparing the Mowers’
individual income tax returns, Leslie Mower informed her that the Mowers had a
downline called MP Trust, listed under Thomas Mower’s Social Security number.
Leslie Mower told Karin Lane that the Mowers received monies from MP
Enterprises, Base of the Tree, Revenol, Employee Purchases, BP Sales, and BW
Enterprises. Additionally, Ms. Lane discovered that sometimes the Mowers
would not cash their distributor checks, particularly if the company was having
money troubles, and the Mowers paid some of Neways US’s and Mower
Properties’ bills from the Mowers’ personal checking account. Ms. Lane also
testified that the Mowers had loaned a lot of money to Mower Properties, that the
accounting staff knew about these monies and treated them as loans, and that,
when the Mowers received payments from Mower Properties, the payment
amounts were subtracted from the loan amounts. Ms. Lane identified several
checks and deposited items, payable to Thomas Mower or MP Trust, that had
been deposited in the Mower Properties account and had been treated as loans
from the Mowers to Mower Properties. These deposits totaled $411,536.91 from
1994 to 1997. Ms. Lane admitted, though, that other deposits into the Mower
Properties account during the same time period were commission income that no
one had reported.
20
The government devoted substantial time at trial to the testimony of its
expert, IRS Agent Renae Trask. Agent Trask compiled checks, deposit slips, and
bank records, and she created summaries of all of the commission checks that the
government could discover and that the government alleged were personal income
to the Mowers. At least one piece of evidence supported each item listed on the
summaries, and she converted amounts in Australian or Malaysian currency to
U.S. dollars using the conversion rate at the time of each transaction. Exhibit 81-
1 listed all of the checks and wire transfers that the government had been able to
discover, and it included all of the information from each transaction: the check
date, payor, check number, payee, amount (in U.S. dollars), disposition (if
known), disposition date, endorsement (if any), and exhibit number.
Exhibit 80-3 summarized all of the amounts by year and listed the total
commission income for each year from each country, the commissions reported by
the Mowers on their tax returns, and the total unreported commissions. Agent
Trask testified that, in creating this exhibit, she assumed the commissions were
the Mowers’ personal income. She believed this was a valid assumption for many
reasons, including: (1) Thomas Mower originally wanted the Neways Australia
commission checks made out to him personally, and John Hunter suggested the
Neways 1 through 7 entities as an alternative; (2) all of the Neways 1 through 7
checks were pulled and sent to Utah, addressed to the attention of Thomas and
Leslie Mower; (3) the Neways US accounting department was unaware of these
21
checks; (4) Hobble Creek was purchased with these funds, and it was owned by
the Mower Family Trust; (5) all of the funds were disposed of at Thomas
Mower’s direction; (6) no one at Neways US knew this money existed until the
IRS began investigating in 1997; (7) John Dwyer’s letter stated that these were
“BONUSES for the Mower downline”; (8) these were clearly commission checks,
and not loans; and (9) John Hunter personally handed some checks to the Mowers
and signed them over to cash. For 1992, she calculated the unreported
commissions to be $179,362; for 1993, $512,606; for 1994, $1,028,455; for 1995,
$555,648; for 1996, $536,711; and for 1997, $397,033. The unreported
commissions totaled $3,209,815. 9 In 1996 alone, the Mowers reported only half
of the commission income that they received from Neways US, and none of the
commission income that they received from either Neways Australia or Neways
Malaysia. Ultimately, Agent Trask calculated the total tax due and owing as
$1,262,081.
Other exhibits detailed specific dispositions of commission checks. Exhibit
81-5 summarized a series of deposits on July 27, 1994, into Leslie Mower’s
savings account, all from checks dated June 20, 1994, and made out to Neways 2,
4, 5, 6, and 7. These amounts totaled $55,302.83. Agent Trask did not believe
that the Mowers had made a mistake in depositing these amounts in Leslie
9
The total commissions were $3,775,764, from which she subtracted
reported commission income of $565,949.
22
Mower’s savings account, although the defendants introduced evidence showing
that, in January 1995, the Mowers transferred $20,000 from this account into the
Mower Properties checking account and $40,000 from this account into the
Neways US corporate account. Exhibit 100-1 showed how the payee names on
the commission checks changed over time from 1992 to 1998. Many of the
entities listed as payees on the commission checks—including Neways
Independent Distributor Ad Pool, Base of the Tree, MP Enterprises, BP Sales
International, BW Enterprises, Rezults, and the Mower Family Trust—had never
paid federal taxes. Moreover, two bank accounts—the Mowers’ personal
checking account and the Rezults account—had been opened using Social
Security numbers for two of the Mowers’ children. 10
Exhibits 100-2 and 100-3 summarized the disposition of the Neways
Australia and Neways Malaysia checks, respectively, between 1994 and 1997.
Exhibit 100-4 summarized all commission income from all three
entities—Neways US, Neways Australia, and Neways Malaysia—between 1992
and 1997. A total of $712,111 was listed as “unknown” on the summary, and it
consisted mostly of Australian commission checks for which the government did
10
During a previous audit in 1993, the IRS had discovered something
similar: a bank account that was not included on Images & Attitudes’ tax returns,
that had a different identification number than Images & Attitudes’. The account
was in the name of “Images International, Inc.” and was located in Van Alstyne,
Texas.
23
not know the ultimate disposition. Of the approximately $2.3 million in
commission income from Neways Australia between 1992 and 1997, no person or
entity reported any of it before the IRS began investigating.
At the close of the government’s evidence, the defendants moved for a
judgment of acquittal under Fed. R. Crim. P. 29, but the district court denied the
motion. The defendants then called two witnesses: Wade Winegar, a former
general counsel at Neways US, and E. Gail Anger, an expert witness.
Mr. Winegar testified that, when he began working in the legal department
at Neways US in 1999, he found a lot of corporate structures that various people
had set up over the years, and the Mowers did not understand this set up—they
just followed their attorneys’ advice. The Mowers viewed all of the structures as
one “big ball of wax,” and they did not view the corporate structures as separate
legal entities. Money flowed freely between the different corporations, and
although these transfers should have been treated as inter-company loans, no
documentation supported this treatment. The Mowers had intended Mower
Properties to be a real estate holding company for all of the other companies, and
Mower Properties paid the property taxes on the different properties. The
Mowers, though, had not run Mower Properties as a separate legal entity, and the
properties had been titled in many different names.
As for Hobble Creek, Mr. Winegar testified that he gathered information
about the property and was told that it was a retreat for Neways US, where the
24
company would host distributors and customers. He found verification, including
pictures and videotapes in the marketing department at Neways US, and he saw
plans for a distributor lodge on Hobble Creek. John Dwyer told him that the
checks used to purchase Hobble Creek had come from a payment stream assigned
to Mower Properties. A number of payment streams came from Neways
Australia, and people at Neways US kept getting confused about whether
payments were distributor commissions or pre-payments for product. Also,
Hobble Creek was kept on the books of Mower Properties, although Mr. Winegar
admitted that it did not appear on Mower Properties’ financial statements for
1993, 1994, 1995, or 1996. In 2003, Mr. Winegar re-titled Hobble Creek from the
Mower Family Trust to Mower Properties.
The defendants’ expert, E. Gail Anger, worked to rebut the testimony of
Agent Trask. He disagreed with Agent Trask’s conclusion that the commissions
were personal income to the Mowers. He stated that nothing in the bonus
histories indicated that the Hobble Creek monies were personal to the Mowers,
and just because the checks were sent to the Mowers in Utah, and the property
was titled in the name of the Mower Family Trust, did not make the Hobble Creek
monies personal income. According to Mr. Anger, Mower Properties had “the
burdens and benefits of ownership,” and Hobble Creek was therefore corporate
property. The great bulk of the checks from Neways Australia and Neways
Malaysia, moreover, were not payable to the Mowers personally. In addition, the
25
unidentified checks were never negotiated, and most of the expenses paid out of
the Rezults account were corporate expenses. Mr. Anger also testified that,
eventually, all of the unreported items identified by the government—except the
checks that were not negotiated—were reported on amended corporate income tax
returns for the various companies.
On cross-examination, though, Mr. Anger admitted that Agent Trask had “a
reasonable argument,” even if he disagreed with her. He also admitted that no
one ever reported any of the $3.2 million in any originally filed tax returns, and
that Neways US should not have been the entity amending its returns if the
income was the income of Mower Properties. Further, he admitted that the
accountants at Neways US should have known about the money if it was
corporate income.
At the close of the evidence, the defendants renewed their motions for
acquittal, which the district court denied. After the jury was instructed and the
case submitted, the jury found all three defendants guilty on all counts.
Subsequently, Thomas Mower and Leslie Mower renewed their motions for
acquittal, or in the alternative, for a new trial, and James Thompson renewed his
motion for acquittal. The district court denied the motions.
Prior to sentencing, the district court held a hearing pursuant to U.S.S.G. §
6A1.3, at which the parties presented their proposed tax loss findings for
sentencing. The district court then issued its tax loss findings. After detailing the
26
evidence and its own findings of fact, the district court calculated Thomas
Mower’s tax loss to be $199,775. Under U.S.S.G. § 2T4.1 (2005), the base level
for this tax loss amount was 16. The district court calculated Leslie Mower’s tax
loss to be $89,112, which also resulted in a base level of 16 under U.S.S.G. §
2T4.1 (2005).
At the sentencing hearing on September 13, 2006, the district court
sentenced Thomas Mower first. The district court determined that there were
overt acts after 2001, so the 2001 Guidelines applied. The court increased
Thomas Mower’s base level by 2 for sophisticated means, see U.S.S.G. §
2T1.1(b)(2), and by 2 for playing a leading role, see U.S.S.G. § 3B1.1(c), for a
total offense level of 20. Combined with a criminal history category of I, this
yielded a Guidelines range of 33 to 41 months, and the district court sentenced
Thomas Mower to 33 months’ imprisonment, followed by 36 months of
supervised release.
The district court also applied the 2001 Guidelines for Leslie Mower,
despite her counsel’s argument that the 1997 Guidelines were appropriate. The
court increased her base level by 2 for sophisticated means, see U.S.S.G. §
2T1.1(b)(2), resulting in a total offense level of 18, which combined with a
criminal history category of I for a Guidelines range of 27 to 33 months. The
district court sentenced her to 27 months’ imprisonment, followed by 36 months
of supervised release.
27
Lastly, the district court sentenced James Thompson to a term of
imprisonment for 12 months and a day, followed by 24 months of supervised
release.
II.
Sufficiency of the evidence
On appeal, all three defendants challenge the sufficiency of the evidence to
support their convictions. Thomas Mower challenges the sufficiency of the
evidence as to his conviction for tax evasion for the years 1992, 1993, and 1997.
Leslie Mower challenges the sufficiency of the evidence as to all
counts—conspiracy to defraud the United States, and tax evasion for the years
1992 through 1997. James Thompson challenges the sufficiency of the evidence
as to both counts—conspiracy to defraud the United States, and corruptly
endeavoring to interfere with the administration of internal revenue laws.
“‘Evidence is sufficient to support a conviction if a reasonable jury could
find the defendant guilty beyond a reasonable doubt, given the direct and
circumstantial evidence, along with reasonable inferences therefrom, taken in a
light most favorable to the government.’” United States v. Nelson, 383 F.3d
1227, 1229 (10th Cir. 2004) (quoting United States v. Wilson, 107 F.3d 774, 778
(10th Cir. 1997)). “We will not weigh conflicting evidence or second-guess the
fact-finding decisions of the jury.” United States v. Summers, 414 F.3d 1287,
1293 (10th Cir. 2005). “Rather than examining the evidence in ‘bits and pieces,’
28
we evaluate the sufficiency of the evidence by ‘considering the collective
inferences to be drawn from the evidence as a whole.’” Nelson, 383 F.3d at 1229
(quoting Wilson, 107 F.3d at 778).
As a preliminary matter, both Thomas and Leslie Mower rely heavily on
the district court’s tax loss findings at sentencing in attacking the sufficiency of
the evidence to support their convictions. The tax loss findings, however, do not
alter our sufficiency review for three reasons. First, the district court’s
determination of a tax loss for sentencing purposes and the jury’s determination
of guilt based upon the sufficiency of the evidence are different and distinct
inquiries. See, e.g., United States v. Greene, 239 F. App’x 431, 447 (10th Cir.
2007) (rejecting the defendant’s argument that the district court was prohibited
from calculating the tax loss based upon facts found at sentencing); United States
v. Kosinski, 480 F.3d 769, 776 (6th Cir. 2007). Granted, in most instances, this
distinction becomes relevant where a district court has calculated a greater tax
loss than that found by the jury at trial, but there is no reason to blur the two
inquiries when the converse situation is presented. Cf. United States v. Scholl,
166 F.3d 964, 981 (9th Cir. 1999) (holding that the district court did not err in
finding, during sentencing, that “there was insufficient evidence to make a
reasonable estimate of tax loss,” where the jury convicted the defendant of
violating 26 U.S.C. § 7206(1)). Second, in the instant case, the district court
denied the Mowers’ respective post-verdict motions for judgment of acquittal,
29
indicating the district court thought that the evidence was sufficient to support the
jury’s verdicts, notwithstanding the district court’s later tax loss findings. Third,
given the evidence outlined above, the district court would have been justified in
calculating a greater tax loss than it did. In analyzing the Mowers’ sufficiency of
the evidence claims, therefore, we will disregard the district court’s tax loss
findings and employ our usual sufficiency of the evidence analysis by reviewing
the evidence presented at trial to determine “if a reasonable jury could find the
defendant guilty beyond a reasonable doubt, given the direct and circumstantial
evidence, along with reasonable inferences therefrom, taken in a light most
favorable to the government.” Nelson, 383 F.3d at 1229 (citation and internal
quotation marks omitted).
A. Thomas Mower
The evidence was sufficient to convict Thomas Mower of tax evasion for
the years 1992, 1993, and 1997. He has chosen to appeal these years—and not
1994, 1995, and 1996—because in 1992, 1993, and 1997, the only alleged
unreported income was foreign commission income, as opposed to a combination
of domestic and foreign commission income. “In order to prove a defendant
guilty of tax evasion, the government must show (1) a substantial tax liability, (2)
willfulness, and (3) an affirmative act constituting evasion or attempted evasion.”
United States v. Anderson, 319 F.3d 1218, 1219 (10th Cir. 2003); see also 26
U.S.C. § 7201 (“Any person who willfully attempts in any manner to evade or
30
defeat any tax imposed by this title or the payment thereof shall . . . be guilty of a
felony . . . .”). In proving tax evasion, the government’s evidence
is ordinarily circumstantial, since direct proof is often unavailable.
Circumstantial evidence in this context may consist of, among other
things, a failure to report a substantial amount of income, a
consistent pattern of underreporting large amounts of income, the
spending of large amounts of cash that cannot be reconciled with the
amount of reported income, or any conduct, the likely effect of which
would be to mislead or to conceal.
United States v. Kim, 884 F.2d 189, 192 (5th Cir. 1989) (citations and internal
quotation marks omitted).
A reasonable jury could have found beyond a reasonable doubt that Thomas
Mower had a substantial tax liability for the years 1992, 1993, and 1997. In
1992, several Australian checks, payable to Images 1 through 7, were drawn on
the Australian National Bank. One of these checks contained a handwritten note
on the front with the words, “Please Pay Cash.” John Hunter testified that, when
the Mowers visited Australia, they once asked him to sign commission checks
over to cash, and he obliged. In addition, the government discovered multiple
commission checks from 1992 that had an “unknown disposition.” Although the
Mowers presented evidence at trial that these checks were not negotiated, the
receipt of the checks—and not their negotiation—is the important fact in
determining whether income is taxable in a given year. See Walter v. United
States, 148 F.3d 1027, 1028-29 (8th Cir. 1998) (explaining, under the theory of
constructive receipt, that a lost check was still taxable in the year it was received,
31
even though the defendants did not obtain or cash a replacement check until two
years later); see also 26 C.F.R. 1.451-2. For the doctrine of constructive receipt
to apply, the checks must have been personal income to the Mowers, but as
explained below, there was more than enough evidence for a reasonable jury to
conclude that they were. 11
As regards 1993, the government produced evidence of a variety of foreign
commission checks with a variety of dispositions. Several of the checks were
endorsed directly to pay for Hobble Creek. Others were deposited in the Rezults
account. Multiple foreign commission checks from 1993 had an “unknown
disposition.” In 1997, a number of foreign commission checks were deposited in
the Mower Properties account, the Rezults account, and the Neways US account.
Most importantly, the evidence indicated that the foreign commission
checks were personal income to the Mowers. Thomas Mower originally wanted
the Neways Australia commission checks made out to him personally, and he only
created the Neways 1 through 7 entities after John Hunter suggested it. All of the
foreign commission checks were pulled and sent to Utah, addressed to the
attention of Thomas Mower. No one in the corporate accounting department at
11
Ordinarily, the doctrine of constructive receipt applies to prevent
taxpayers from shifting income into subsequent tax years (e.g., to obtain a more
favorable marginal tax rate). Assuming the commission checks were personal
income to the Mowers, though, there is no reason for us to refrain from applying
this doctrine here.
32
Neways US was aware of the checks until after the IRS began investigating in
1997. John Hunter personally signed several of the commission checks over to
cash and handed them to the Mowers, and one of the 1992 commission checks has
“Please Pay Cash” on the front of it. All of the funds were disposed of at Thomas
Mower’s direction. No one at Neways US—except for the Mowers and Thomas
Mower’s secretary—knew of the Rezults account, and the Mowers had control
over the account. Several of the checks from 1993 were endorsed directly to pay
for Hobble Creek, which was titled in the name of the Mower Family Trust and
was where the Mowers had planned to build a house. Further, no one at Neways
US knew about Hobble Creek until after the IRS became involved. Even the false
loan document stated that the “loan” for Hobble Creek was to the Mower Family
Trust, not to any of the corporations. John Dwyer’s letter stated that these were
“BONUSES for the Mower downline.” Also, despite the Mowers’ insistence that
these were loans or loan repayments, they were clearly commission checks, and
the evidence showed that when the Mowers needed a loan for Neways US from
Neways Australia, they knew how to accomplish it—and how to include it on the
books of both companies. Most significantly, despite the Mowers’ insistence that
these monies were corporate income, and not personal income, no person or entity
paid any taxes on the $2,384,849 of Australian commission income or the
$324,554 of Malaysian commission income until after the IRS began investigating
in 1997. Finally, the Mowers continually changed their story as to what these
33
commission checks actually were—loans from Neways Australia, loan repayments
from Neways Australia, income to Neways US, income to Mower Properties, etc.
Taken together, the evidence was more than sufficient for the jury to find beyond
a reasonable doubt that the commission checks were personal income to the
Mowers, for which they incurred a “substantial tax liability.” Anderson, 319 F.3d
at 1219.
Additional evidence—and much of the evidence listed above—showed that
Thomas Mower’s failure to report these monies was “willful[].” Id. Asking John
Hunter to endorse checks directly to cash shows willfulness as to the 1992
amounts. In addition, Thomas Mower endorsed checks directly to purchase
Hobble Creek in 1993, and he presented a false, back-dated loan document to the
IRS in an effort to cover up the purchase. He lied to Agent Elder about not
having a distributorship in Neways US. Further, the sheer number of shell
corporations and entities that the Mowers created here—and which were payees
for the various commission checks—is nothing short of astounding, as is the
number of different payees indicated on the commission checks, as well as the
number of different accounts in which the Mowers deposited all of the
commission checks. Along these same lines, the Mowers frequently opened bank
accounts under incorrect Social Security or employer identification numbers.
From this circumstantial evidence, a reasonable jury could have found beyond a
reasonable doubt that Thomas Mower’s failure to report these amounts was
34
willful.
Finally, the evidence showed affirmative acts of evasion for each year.
“An affirmative act requires more than the passive failure to file a tax return;
rather, it requires a positive act of commission designed to mislead or conceal.”
United States v. Meek, 998 F.2d 776, 779 (10th Cir. 1993). The government only
needed to show one affirmative act of evasion for each count of tax evasion, see
Anderson, 319 F.3d at 1219; Meek, 998 F.2d at 779, and here, many of the
affirmative acts of evasion related to multiple years. For instance, the creation
and presentation of the false, back-dated loan document certainly qualifies as an
affirmative act of evasion—arguably for all six years of tax evasion, and at the
very least for 1993 and 1994. Later, and long after the IRS began investigating,
the Mowers had Neways US file several sets of amended corporate returns, in
which they attempted to claim that the commissions were actually corporate
income, rather than personal income. A reasonable jury could have found beyond
a reasonable doubt that these were affirmative acts of evasion as to the foreign
commission checks issued in 1992, 1993, and 1997.
In his argument on appeal, Thomas Mower contends that the evidence did
not comport with the government’s use of the “specific items method” of proving
tax evasion. Under the specific items method, “the Government . . . produce[s]
evidence of the receipt of specific items of reportable income by the defendant
that do not appear on his income tax return or appear in diminished amount.”
35
United States v. Horton, 526 F.2d 884, 886 (5th Cir. 1976) (contrasting this with
the “net worth method,” whereby the government shows an “increase in the
taxpayer’s net worth during the period in question in an amount greater than that
reported to IRS”); see also United States v. Merrick, 464 F.2d 1087, 1092 (10th
Cir. 1972). Contrary to Thomas Mower’s argument, the government’s use of the
specific items method does not require the government to prove any additional
elements beyond those laid out in Anderson, 319 F.3d at 1219. Rather, the
specific items method merely states the obvious with regard to the government’s
burden to show a “substantial tax liability” under 26 U.S.C. § 7201: the
government must produce evidence of a specific item of reportable income that
the defendants did not—but should have—included on their income tax returns.
The government has done so in the instant case, and the evidence was sufficient
to support Thomas Mower’s convictions.
B. Leslie Mower
1. Conspiracy
There was sufficient evidence for a reasonable jury to find Leslie Mower
guilty beyond a reasonable doubt of conspiracy to defraud the United States. The
elements of conspiracy under 18 U.S.C. § 371 are “that (1) the defendant entered
into an agreement; (2) the agreement involved a violation of the law; (3) one of
the members of the conspiracy committed an overt act; (4) the overt act was in
furtherance of the conspiracy’s object; and (5) the defendant wilfully entered the
36
conspiracy.” United States v. Weidner, 437 F.3d 1023, 1033 (10th Cir. 2006).
“Secrecy and concealment are often necessary to a successful conspiracy, and, as
a result, direct evidence of the crime is frequently difficult to obtain.” Id.
Consequently, “conspiracy convictions may be based on circumstantial evidence,
and the jury may infer conspiracy from the defendants’ conduct and other
circumstantial evidence indicating coordination and concert of action.” Id.
(citation and internal quotation marks omitted).
The evidence was sufficient to show that Leslie Mower entered into an
agreement to conceal approximately $3.2 million in foreign and domestic
commission income. “‘The core of a conspiracy is an agreement to commit an
unlawful act.’” Id. (quoting United States v. Morehead, 959 F.2d 1489, 1500
(10th Cir. 1992)). “The existence of the agreement to violate the law may be
inferred from a ‘unity of purpose or common design and understanding’ among
conspirators to accomplish the objects of the conspiracy.” Id. (quoting United
States v. Kendall, 766 F.2d 1426, 1431 (10th Cir. 1985)). Leslie Mower was the
Chief Financial Officer of Neways US. She was aware of the foreign commission
checks and knew what they were, and, when the commission checks did not arrive
on time, she would call John Hunter to inquire. In her interview with Agent
Elder, she told him that she directed the financial operations of Neways US and
that anything financial at Neways US would have to go through her. She was
with her husband in Australia when they asked John Hunter to sign several of the
37
commission checks over to cash. She often picked up the domestic commission
checks from Neways US, and her endorsement appears on several of the domestic
commission checks. Several commission checks were deposited into her personal
savings account. She never disclosed these payments to anyone at Neways US,
including Annette Jenkins and Karin Lane when she asked them to prepare the
Mowers’ individual income tax returns. She was aware of the purchase of Hobble
Creek and told John Hunter that she wanted to build a new house there. In
addition, Allen Davis continually kept her apprised of the IRS investigation,
including the false loan document that her husband presented to the IRS. Finally,
despite all of this, Leslie Mower ultimately signed the amended corporate tax
returns that Neways US filed to mislead the IRS after the investigation began.
The totality of this evidence was sufficient to prove beyond a reasonable
doubt that Leslie Mower entered into an agreement with her husband to defraud
the United States. It was also sufficient to show beyond a reasonable doubt that
she entered into the agreement willfully. See Weidner, 437 F.3d at 1033. In
addition, even though the government only had to prove that one of the members
of the conspiracy committed an overt act in furtherance of the conspiracy, see id.,
the evidence contained several examples of overt acts committed by Leslie Mower
herself. The evidence was sufficient to convict Leslie Mower of conspiracy to
defraud the United States.
38
2. Tax evasion
Leslie Mower’s challenge to the sufficiency of the evidence also fails with
regard to the six counts of tax evasion. “In order to prove a defendant guilty of
tax evasion, the government must show (1) a substantial tax liability, (2)
willfulness, and (3) an affirmative act constituting evasion or attempted evasion.”
Anderson, 319 F.3d at 1219.
For the same reasons as her husband, Leslie Mower had a “substantial tax
liability” in 1992, 1993, and 1997. In 1994, 1995, and 1996, there was evidence
of unreported income from the foreign commission checks, and for those years,
the government also produced evidence of unreported domestic commission
income. The government’s evidence of unreported income in 1994, 1995, and
1996 included: foreign commission checks used to purchase Hobble Creek in
1994; domestic and foreign commission checks deposited in Leslie Mower’s
savings account in 1994 and 1995; domestic commission checks deposited in the
Mowers’ checking account in 1994, 1995, and 1996; domestic and foreign
commission checks deposited in the Mower Properties account in 1994, 1995, and
1996; domestic and foreign commission checks deposited in the Rezults account
in 1994, 1995, and 1996; foreign commission checks drawn on the National
Australia Bank in 1994 and 1995; and domestic and foreign commission checks of
“unknown disposition” in 1994 and 1996. As explained previously, the evidence
was sufficient for a reasonable jury to conclude beyond a reasonable doubt that
39
this was personal income to the Mowers.
In addition, the evidence previously cited as supporting Leslie Mower’s
conviction for conspiracy to defraud the United States was also sufficient to show
the final two elements for all six counts of tax evasion: “(2) willfulness, and (3)
an affirmative act constituting evasion or attempted evasion.” Anderson, 319
F.3d at 1219. The government presented sufficient evidence for a reasonable jury
to convict Leslie Mower of tax evasion for the years 1992 through 1997.
C. James Thompson
1. Conspiracy
There was also sufficient evidence to convict James Thompson of
conspiracy to defraud the United States, in violation of 18 U.S.C. § 371. The
elements of conspiracy are “that (1) the defendant entered into an agreement; (2)
the agreement involved a violation of the law; (3) one of the members of the
conspiracy committed an overt act; (4) the overt act was in furtherance of the
conspiracy’s object; and (5) the defendant wilfully entered the conspiracy.”
Weidner, 437 F.3d at 1033. James Thompson was aware that there was no
documentation to support treating the monies used to purchase Hobble Creek as a
loan, and further, that Neways Australia had not accounted for the monies as a
loan. Yet, he decided to create a false, back-dated loan document for the
transaction. Then, during Agent Elder’s interview, James Thompson brought the
false loan document to Thomas Mower, who presented it to Agent Elder. Neither
40
James Thompson nor Thomas Mower informed Agent Elder that the document
was back-dated. In addition, James Thompson left two messages on Agent
Elder’s answering machine, in which he tried to convince Agent Elder that they
had given him all of the information that they had concerning the alleged Hobble
Creek loan.
The evidence was sufficient for a reasonable jury to find James Thompson
guilty of conspiracy to defraud the United States. His creation of the false, back-
dated loan document, which Thomas Mower ultimately signed, and their joint
presentation of that document to Agent Elder, showed “a unity of purpose or
common design and understanding” between James Thompson and Thomas
Mower, from which a reasonable jury could infer an agreement to commit an
unlawful act. Weidner, 437 F.3d at 1033 (citations and internal quotation marks
omitted). In addition, this series of events contained several overt acts in
furtherance of the conspiracy, as well as evidence of willfulness. The evidence
was sufficient to support James Thompson’s conviction for conspiracy.
2. Obstruction
The evidence was also sufficient for a reasonable jury to convict James
Thompson of corruptly endeavoring to interfere with the administration of
internal revenue laws. “In order to establish a violation of 26 U.S.C. § 7212(a),
the government must prove that a defendant ‘corruptly’ endeavored to obstruct
and impede the due administration of the internal revenue laws.” United States v.
41
Winchell, 129 F.3d 1093, 1098 (10th Cir. 1997). In this context, “to act corruptly
means to act with the intent to secure an unlawful benefit either for oneself or for
another.” Id.
James Thompson was aware of the pending IRS investigation. He
responded by creating a false, back-dated loan document, which Thomas Mower
signed and which they presented to Agent Elder without informing him that it was
back-dated. He knew, before creating the false loan document, that no
documentation supported treating the Hobble Creek monies as a loan, and that
Neways Australia had not accounted for the monies as a loan. In addition, after
presenting the false loan document to Agent Elder, he called Agent Elder and left
two messages trying to convince Agent Elder that they had given him all of the
information that they had concerning the alleged Hobble Creek loan. This
evidence was sufficient for a reasonable jury to find beyond a reasonable doubt
that James Thompson “‘corruptly’ endeavored to obstruct and impede the due
administration of the internal revenue laws.” Winchell, 129 F.3d at 1098.
Statute of limitations
Leslie Mower and James Thompson contend that the government did not
bring several of the charges against them within the applicable statute of
limitations. 12 Specifically, Leslie Mower contends that the government brought
12
Both Leslie Mower and James Thompson raised this issue before the
(continued...)
42
four of the tax evasion charges—for the years 1992, 1993, 1994, and
1995—outside of the statute of limitations, because the limitations periods began
to run when the Mowers filed their personal income tax returns for those years.
James Thompson argues that his final phone message to Agent Elder, on April 8,
1997, was not an overt act in furtherance of the conspiracy and was not an
attempt to obstruct or impede the IRS, and, as a result, both counts against him
are barred by the applicable statute of limitations.
“We review the district court’s interpretation of the statute of limitations de
novo.” Anderson, 319 F.3d at 1219. The limitations period for each count in the
Superseding Indictment is six years. See 26 U.S.C. § 6531(2), (6), & (8); United
States v. Workinger, 90 F.3d 1409, 1413-14 (9th Cir. 1996).
A. Leslie Mower
The district court correctly determined that the government brought the
four counts of tax evasion against Leslie Mower within the six-year limitations
period. In Anderson, 319 F.3d at 1219, we adopted the rule, embraced by many of
our sister circuits, “that when a defendant commits a series of evasive acts over
several years after incurring a tax liability, the statute of limitations begins to run
on the date of the last evasive act.” See also United States v. Wilson, 118 F.3d
12
(...continued)
district court. Thomas Mower raised this issue below, but he does not raise it on
appeal.
43
228, 236 (4th Cir. 1997); United States v. Dandy, 998 F.2d 1344, 1355 (6th Cir.
1993); United States v. Winfield, 960 F.2d 970, 974 (11th Cir. 1992); United
States v. DeTar, 832 F.2d 1110, 1113 (9th Cir. 1987); United States v. Ferris, 807
F.2d 269, 270-71 (1st Cir. 1986). In so holding, we expressly approved of the
First Circuit’s reasoning in Ferris, explaining:
Section 7201 criminalizes not just the failure to file a return or the
filing of a false return, but the willful attempt to evade taxes in any
manner. In light of the fact that evasive acts following the filing of a
return may be considered part of the offense, . . . “it is the date of the
latest act of evasion, not the due date of the taxes, that triggers the
statute of limitations.”
Anderson, 319 F.2d at 1219-20 (citing and quoting Ferris, 807 F.2d at 271). We
also quoted the Sixth Circuit’s explanation that “‘to hold otherwise would only
reward a defendant for successfully evading discovery of his tax fraud for a
period of six years subsequent to the date the returns were filed.’” Id. at 1220
(quoting Dandy, 998 F.2d at 1355).
An affirmative act of evasion “requires more than the passive failure to file
a tax return; rather, it requires a positive act of commission designed to mislead
or conceal.” Meek, 998 F.2d at 779. In the instant case, the Superseding
Indictment alleged that, for each count of tax evasion, the filing of the false
amended corporate income tax returns for Neways US on January 6, 1998, was an
affirmative act of evasion. In its closing argument, the government again
contended that this filing was an affirmative act of evasion occurring after
44
December 18, 1996—i.e., occurring within six years of when the original
indictment was returned against Leslie Mower. Moreover, the jury instructions
explained to the jury that it “must unanimously agree that the affirmative act of
evasion occurred on or after December 18, 1996.” Jury Instruction No. 32, ROA,
Vol. V, Doc. 188, at 35. The jury’s finding that Leslie Mower was guilty,
therefore, necessarily meant that it found beyond a reasonable doubt that she
committed an affirmative act of evasion after December 18, 1996. Included in the
evidence to support this finding was Leslie Mower’s signature on the amended
corporate income tax returns for Neways US, filed on January 6, 1998. There was
sufficient evidence for the jury to conclude that the statute of limitations did not
bar Leslie Mower’s convictions for tax evasion.
Leslie Mower argues that our decision in Anderson was contrary to our
prior decision in United States v. Payne, 978 F.2d 1177 (10th Cir. 1992), and that
“the alleged offense is complete and the six year statute of limitations begins to
run when a defendant willfully files a false return on the filing date.” L.M.
Opening Br. at 38. She is incorrect. In Payne, 978 F.2d at 1179, we addressed
the situation where a defendant had committed an affirmative act of evasion but
had not yet incurred a tax deficiency. We explained that, because the crime was
not complete until the defendant incurred a tax deficiency, the statute of
limitations could not begin to run until that point in time. Id. We noted,
however, that our holding was consistent with other circuits that had “held that a
45
prosecution under § 7201 is timely if commenced within six years of the last act
of evasion,” where a defendant incurred a tax deficiency and then committed
affirmative acts of evasion. Id. at 1179 n.2. In Anderson, 319 F.3d at 1220-21,
we relied upon this language in Payne to reconcile the two cases, and we
explained that, where a defendant has already incurred a substantial tax
deficiency, the statute of limitations begins to run on the date of the last
affirmative act of evasion. 13
B. James Thompson
The district court correctly determined that the government’s charges
against James Thompson were not barred by the applicable statute of limitations.
For the conspiracy count, the government was required to prove that, within the
statute of limitations period, one of the conspirators committed an overt act in
furtherance of the conspiracy. See Grunewald v. United States, 353 U.S. 391,
13
Leslie Mower also argues that tax evasion is not a “continuing offense”
for statute of limitations purposes. Given that the affirmative acts of evasion are
part of the crime itself, and the statute of limitations does not begin running until
the affirmative acts are complete, see Anderson, 319 F.3d at 1220-21, the
“continuing offense” doctrine is irrelevant here. See United States v. Eklund, 551
F. Supp. 964, 969 (D. Iowa 1982). There is also no reason to distinguish between
evasion of assessment and evasion of payment cases for statute of limitations
purposes. See United States v. Hunerlach, 197 F.3d 1059, 1065 (11th Cir. 1999).
In addition, as previously discussed, the jury’s finding that she committed
the affirmative act within the statute of limitations is not negated by the district
court’s tax loss findings. Further, because Leslie Mower’s statute of limitations
theory is wrong as a matter of law, she certainly was not entitled to a jury
instruction incorporating that theory. Finally, contrary to her contention, there
was unreported commission income in 1992.
46
396-97 (1957). Here, because the Superseding Indictment was returned on April
8, 2003, the jury needed to find that one of the conspirators committed an overt
act on or after April 8, 1997, and the district court correctly instructed the jury as
to the law on this issue.
Even if James Thompson’s telephone message to Agent Elder on April 8,
1997, when viewed in isolation, may appear innocuous, it came only days after
James Thompson and Thomas Mower presented the false Hobble Creek loan
document to Agent Elder. Several statements in the telephone message,
moreover, indicate that James Thompson was trying to forestall the government’s
investigation, and Agent Elder testified that he viewed the message as such. In
light of its timing and context, a reasonable jury could have found beyond a
reasonable doubt that James Thompson’s telephone message to Agent Elder on
April 8, 1997, was an overt act in furtherance of the conspiracy.
Further, the government is correct that, because James Thompson did not
take the affirmative steps necessary to withdraw from the conspiracy, any of his
co-conspirators’ overt acts—not just his own acts—may be used to satisfy the
statute of limitations as to him. See United States v. Hauck, 980 F.2d 611, 614
(10th Cir. 1992). Even if we were to conclude, therefore, that the telephone
message on April 8, 1997, was not an overt act in furtherance of the conspiracy,
any of his co-conspirators’ acts in furtherance of the conspiracy, on or after April
8, 1997, brought his conspiracy charge within the statute of limitations.
47
As for the count of corruptly endeavoring to interfere with the
administration of internal revenue laws, the statute of limitations began to run “on
the date of the last corrupt act,” Wilson, 118 F.3d at 236, so the government was
required to prove beyond a reasonable doubt that James Thompson committed a
corrupt act on or after April 8, 1997. The district court correctly instructed the
jury on this issue, and, for reasons similar to those supporting the conspiracy
count, a reasonable jury could have found that James Thompson’s telephone
message was a corrupt act designed to obstruct or impede the IRS investigation.
Summary charts
Thomas and Leslie Mower both contend that the district court abused its
discretion and committed reversible error in admitting the government’s
“summary charts.” Neither of the defendants specifies which particular
“summary charts” they are challenging. At a minimum, it appears both
defendants are appealing the district court’s decision to admit Exhibit 80-3. Some
of their argument also appears to challenge the district court’s admission of other
exhibits.
Regardless of which summary charts the Mowers are appealing, the district
court did not abuse its discretion in admitting them. Under the Federal Rules of
Evidence,
[t]he contents of voluminous writings, recordings, or photographs
which cannot conveniently be examined in court may be presented in
the form of a chart, summary, or calculation. The originals, or
48
duplicates, shall be made available for examination or copying, or
both, by other parties at reasonable time and place. The court may
order that they be produced in court.
Fed. R. Evid. 1006. “The admission of summaries under Rule 1006 is within the
sound discretion of the trial court,” Harris Mkt. Research v. Marshall Mktg. &
Commc’ns, Inc., 948 F.2d 1518, 1525 (10th Cir. 1991), and we review a district
court’s decision to admit summary charts under Rule 1006 for an abuse of
discretion, United States v. Samaniego, 187 F.3d 1222, 1223 (10th Cir. 1999). In
previous cases, we have approved the use of summaries in tax prosecutions, as
long as the district court provides appropriate limiting instructions. See, e.g.,
United States v. Mann, 884 F.2d 532, 539 (10th Cir. 1989); see also United States
v. Ray, 370 F.3d 1039, 1046 (10th Cir. 2004) (explaining that “because tax cases
often require the presentation of substantial and complex documentation and the
technical analyses of these materials by tax experts,” summaries are often
admissible in tax cases under Rule 1006), vacated on other grounds, 543 U.S.
1109 (2005).
In the present case, the district court did not err in admitting the
summaries. The government’s evidence was incredibly voluminous, and it would
have been incomprehensible to the jury without summarization. Agent Trask
compiled the summaries from all of the commission payments that the
government alleged were personal income to the Mowers. Each item listed on the
summaries was supported by at least one piece of evidence, such as a check,
49
deposit slip, bank record, or wire transfer receipt. Exhibit 81-1 listed all of the
items in painstaking detail, cross-referencing to each specific exhibit number.
The Mowers are correct that, in compiling the summaries, Agent Trask
assumed the items listed were personal income to the Mowers. She believed,
however, that this assumption was factually correct, and she explained how the
evidence supported it. Further, the Mowers thoroughly cross-examined Agent
Trask concerning the amounts and items listed on the summaries. Moreover, as
discussed previously, the evidence supported Agent Trask’s contention that these
amounts were personal income to the Mowers—even the checks that were never
negotiated or were deposited in corporate accounts. Finally, the district court
instructed the jury:
Charts or summaries have been prepared by the government
and shown to you during the trial for the purpose of explaining facts
that are allegedly contained in books, records, and other documents
which are in evidence in the case. Such charts or summaries are not
evidence in this trial or proof of any fact. If you find that these
charts or summaries to [sic] not correctly reflect facts or figures
shown by the evidence in the case, the jury should disregard the
charts or summaries.
In other words, such charts or summaries are used only as a
matter of convenience for you and to the extent that you find they are
not, in truth, accurate summaries of facts or figures shown by the
evidence in the case, you can disregard them entirely.
Jury Instruction No. 14, ROA, Vol. V, Doc. 188, at 15. These instructions were
sufficient to mitigate any potential prejudice resulting from the admission of the
summaries here. See United States v. Francis, 131 F.3d 1452, 1458 (11th Cir.
50
1997). The district court did not abuse its discretion in admitting the summaries.
Grand jury testimony of Allen Davis
Thomas Mower contends that the grand jury testimony of his attorney,
Allen Davis, on March 13, 2002, did not provide prima facie evidence that
Thomas Mower used Mr. Davis to further a crime or fraud, and the district court
erred in granting the government’s motion to compel Mr. Davis’s December 5,
2002, grand jury testimony. Thomas Mower also argues that the district court
violated his procedural due process rights by refusing to unseal the transcript of
an ex parte motion hearing and refusing to compel the production of the
government’s evidence. He contends that these errors require dismissal of the
indictment.
After entering into an immunity agreement with Allen Davis on March 12,
2002, the government subpoenaed Mr. Davis to testify before the grand jury on
March 13, 2002. Mr. Davis, an attorney at Neways US, began by explaining that
he was representing Thomas Mower individually during the IRS investigation.
Mr. Davis testified that he met with Thomas Mower, prior to the interview with
Agent Elder, to discuss the IRS investigation, but Mr. Davis asserted attorney-
client privilege in response to questions about the content of that meeting. He
then identified the loan document for Hobble Creek, and stated that he was
present when James Thompson created it, that he was present when it was
provided to Agent Elder, and that the Mowers later permitted him to tell Agent
51
Elder that it was a false loan document. He asserted attorney-client privilege,
however, in refusing to answer a question about whether he ever had a meeting
with Thomas Mower in which they discussed the Hobble Creek loan document.
Later, he testified that, after the IRS investigation began, they originally decided
to amend the Mowers’ individual income tax returns, but Thomas Mower decided
not to file them and instead to amend the Neways US corporate returns. Mr.
Davis further testified that he talked with Michael Cunningham about the
payments from Australia, but he again asserted attorney-client privilege regarding
his conversations with Thomas Mower on that subject.
Following Mr. Davis’s grand jury testimony, the government filed an ex
parte motion to compel the testimony of Mr. Davis and two other attorneys. The
district court granted the motion, finding:
A. The government has established a prima facie showing that the
alleged crime has some foundation in fact;
B. The government has sustained their burden of showing that the
testimony sought is related to the charges under investigation;
and
C. The testimony sought is not covered by the attorney-client
privilege because the purported conversations and documents
were in furtherance of a crime or fraud[.]
Order to Compel, T.M. Opening Br. at App’x C, at 1. The district court ordered
Mr. Davis and the two attorneys
to testify before the grand jury to answer questions regarding Thomas
Mower and Leslie Mower’s failure to report on their U.S. individual
52
income tax return or a U.S. corporate income tax return their
commission income earned from Neways U.S., Neways Australia,
Neways Malaysia and other Neways entities from 1989 through the
present, the preparation of phoney loan documents, the presentation
of phoney loan documents to the IRS, the preparation and filing of
the Mower’s individual income tax returns, the preparation and filing
of Neways corporate tax returns, the preparation and filing of Mower
Properties tax returns, the preparation and filing of amendments to
Neways corporate tax returns, falsification of Neways U.S. and
Mower Properties’ corporate books and records and other attempts by
these attorneys to knowingly or unwittingly further Thomas Mower
and Leslie Mower’s tax fraud scheme.
Id. at 1-2. Under compulsion from the order, Allen Davis again appeared before
the grand jury on December 5, 2002, and provided answers to questions on the
subjects identified in the court’s order. In response, Thomas Mower filed a
motion to unseal the transcript of the ex parte hearing and to compel the
production of the evidence that the government provided to the district court in
connection with the hearing. The district court denied this motion. Later,
Thomas Mower filed a motion to dismiss the indictment, contending that the
government’s intrusion into his attorney-client privilege violated his due process
rights. The district court denied this motion as well.
We conclude that Thomas Mower’s contentions on appeal do not support
dismissal of the indictment. As for his first contention—that the order to compel
was unjustified and over-broad under the crime-fraud exception to attorney-client
privilege—presumably he is claiming a violation of his due process rights,
although it is not entirely clear from his discussion. “We review the denial of
53
Appellant’s motion to dismiss the indictment for an abuse of discretion.” United
States v. Kingston, 971 F.2d 481, 490 (10th Cir. 1992). In United States v.
Kennedy, 225 F.3d 1187, 1194 (10th Cir. 2000), we explained that, although
“[g]overnment intrusions into pre-indictment attorney-client relationships do not
implicate the Sixth Amendment,” 14 there are instances in which “a defendant may
claim his or her rights under the Due Process Clause have been violated by
prosecutorial misconduct occurring prior to indictment.” Such a violation only
occurs where the “[m]isconduct by law enforcement officials in collecting
incriminating evidence . . . is outrageous enough to shock the conscience of the
court.” Id. (citing Rochin v. California, 342 U.S. 165, 172-74 (1952)). After
noting that “[o]ther courts have concluded governmental misconduct in the form
of a pre-indictment invasion of a defendant’s attorney-client relationship may,
under some circumstances, amount to a deprivation of the defendant’s right to due
process,” we adopted the Third Circuit’s test for evaluating such claims:
[I]n order to raise a colorable claim of outrageousness pertaining to
alleged governmental intrusion into the attorney-client relationship,
the defendant’s submissions must demonstrate an issue of fact as to
each of the three following elements: (1) the government’s objective
awareness of an ongoing, personal attorney-client relationship
between its informant and the defendant; (2) deliberate intrusion into
14
Thus, Thomas Mower is incorrect in claiming that the government’s
conduct, pre-indictment, violated his Sixth Amendment right to counsel.
Kingston, 971 F.2d at 491 (“Because the Sixth Amendment right to counsel does
not attach prior to indictment, Appellant cannot show that he was prejudiced by a
Sixth Amendment violation on these facts.” (citation omitted)).
54
that relationship; and (3) actual and substantial prejudice.
Id. at 1195 (quoting United States v. Voigt, 89 F.3d 1050, 1067 (3d Cir. 1996)).
Thomas Mower has failed to show that the challenged government
conduct—“[t]he government’s ex parte invocation of the crime/fraud exception to
defendant’s attorney-client privilege,” T.M. Opening Br. at 40—caused him any
actual and substantial prejudice under the third prong of the Kennedy test. In his
brief on appeal, Thomas Mower states:
Among the more damaging disclosures was the disclosure that
amended personal tax returns reporting the foreign commissions as
the Mowers’ personal income had been prepared but never filed.
Although those returns were not filed, and the commissions were
reported as corporate income instead, the government used the fact
that, in a privileged setting, the Mowers and their advisors had first
characterized the income as personal to persuade the jury that the
later characterization of the income was fraudulent.
T.M. Opening Br. at 43. Contrary to Thomas Mower’s contention, this
“damaging disclosure” did not occur during Allen Davis’s December 5, 2002,
grand jury testimony as a result of the district court’s order to compel. Rather,
Mr. Davis discussed these facts in his previous grand jury testimony on March 13,
2002, prior to the government ever seeking the order to compel. Mr. Davis
certainly testified about this point on December 5, 2002, but, given his previous
testimony, the later testimony hardly qualifies as a “damaging disclosure.” Under
the third prong of the Kennedy test, Thomas Mower has not shown any “actual
and substantial prejudice” resulting from the district court’s order to compel—or
55
from “[t]he government’s ex parte invocation of the crime/fraud exception to
defendant’s attorney-client privilege”—and there was no deprivation of his due
process rights. See Kennedy, 225 F.3d at 1195-97. 15 As a result, we do not need
to address whether attorney-client privilege, or the crime-fraud exception to that
privilege, appropriately applied to Mr. Davis’s testimony. See Kingston, 971
F.2d at 491 n.5 (“It is unclear whether, in fact, a breach of the attorney-client
privilege occurred during the grand jury proceedings. . . . We need not reach
th[is] issue . . . because, as stated in the text, Appellant has failed to show
prejudice stemming from this alleged violation of the attorney-client privilege.”).
Thomas Mower’s second contention—that the district court’s refusal to
unseal the transcript of the ex parte hearing and compel the production of the
government’s evidence violated his procedural due process rights—is likewise
unpersuasive. Given the procedural posture of the case, this second contention
falls within our due process analysis under the Kennedy test, and, as explained
above, Thomas Mower has failed to show any “actual and substantial prejudice”
under that test. Kennedy, 225 F.3d at 1195.
15
The disclosure of the draft amended individual income tax returns
appears to be the only “damaging disclosure” that Thomas Mower alleges here.
Perhaps the language of his brief can be interpreted as contending that other
“disclosures” by Mr. Davis on December 5, 2002, were prejudicial, see T.M.
Opening Br. at 43 (“Among the more damaging disclosures . . . .” (emphasis
added)), but without any additional specificity, it would be difficult—if not
impossible—for us to determine whether any “actual and substantial prejudice”
resulted from these “damaging disclosures.”
56
Severance
Both Leslie Mower and James Thompson challenge the district court’s
decision to deny their respective motions for severance. Leslie Mower argues
that, because of the “overwhelming evidence” at trial against Thomas Mower and
James Thompson, it was impossible for the jury to consider only the evidence
against her. Likewise, James Thompson argues that he was prejudiced by the
great weight of the evidence against the Mowers—especially considering his
comparatively brief participation in the alleged conspiracy and the fact that, on
multiple days during the trial, he was never even mentioned.
The district court did not abuse its discretion in denying Leslie Mower’s or
James Thompson’s motion to sever. Under Rule 8(b) of the Federal Rules of
Criminal Procedure, a single indictment may charge multiple defendants “if they
are alleged to have participated in the same act or transaction, or in the same
series of acts or transactions, constituting an offense or offenses.” Even if
multiple defendants have been charged together in a single indictment, though,
the district court may sever their trials: “If the joinder of offenses or defendants
in an indictment, an information, or a consolidation for trial appears to prejudice
a defendant or the government, the court may order separate trials of counts, sever
the defendants’ trials, or provide any other relief that justice requires.” Fed. R.
Crim. P. 14(a). “The granting of a motion to sever is ordinarily left to the district
court’s discretion.” United States v. Powell, 982 F.2d 1422, 1432 (10th Cir.
57
1992). “Neither a mere allegation that defendant would have a better chance of
acquittal in a separate trial, nor a complaint of the ‘spillover effect’ from the
evidence that was overwhelming or more damaging against the co-defendant than
that against the moving party is sufficient to warrant severance.” United States v.
Hack, 782 F.2d 862, 870-71 (10th Cir. 1986) (citations omitted). Rather, “absent
a showing of clear prejudice, a joint trial of the defendants who are charged with
a single conspiracy in the same indictment is favored where proof of the charge is
predicated upon the same evidence and alleged acts.” Id. at 871.
Like Thomas Mower, Leslie Mower and James Thompson were charged
with conspiracy to defraud the United States, and generally, “in a conspiracy trial
it is preferred that persons charged together be tried together.” United States v.
Scott, 37 F.3d 1564, 1579 (10th Cir. 1994). As previously discussed, there was
more than enough evidence to implicate both Leslie Mower and James Thompson
in the conspiracy. They were both active participants in the conspiracy, and even
if James Thompson’s participation in the conspiracy was comparatively brief, he
created the false loan document and assisted in concealing the Mowers’ income.
The evidence against each defendant—not any “spillover effect” of evidence
against others—provided a sufficient and independent basis for the conviction of
both Leslie Mower and James Thompson.
In addition, the district court instructed the jury that
[e]ach defendant is entitled to have his or her case decided solely on
58
the evidence which applies to him or her. . . . You must give
separate and individual consideration to each charge against each
defendant. The fact that you find one defendant guilty or not guilty
of the crimes charged in the Indictment should not control your
verdict as to whether you find the other defendant guilty or not guilty
of the crimes charged in the Indictment. You must consider the
evidence presented and determine whether the government has
proved, beyond a reasonable doubt, its case against each of the
defendants.
Jury Instruction No. 18, ROA, Vol. V, Doc. 188, at 19; see also Jury Instruction
No. 21, id. at 22. These instructions cured any potential prejudice that could have
resulted from a joint trial. See Zafiro v. United States, 506 U.S. 534, 540-41
(1993) (“Moreover, even if there were some risk of prejudice, here it is of the
type that can be cured with proper instructions, and juries are presumed to follow
their instructions.” (citation and internal quotation marks omitted)). The district
court did not abuse its discretion by denying the motion for severance.
Jury instructions
Leslie Mower appeals three issues with regard to the district court’s jury
instructions. She argues that the district court erred in (1) refusing to give a
requested instruction explaining the difference between corporate and personal
income; (2) refusing to give a requested instruction on the Mowers’ theory of
defense; and (3) not providing an instruction allowing the jury to consider the
lesser-included offense of misdemeanor tax evasion.
59
A. Jury instruction distinguishing personal from corporate income
The defendants proposed a jury instruction explaining the difference
between personal and corporate income. At the jury instruction conference, the
district court accepted most of the proposed instruction, including the following
paragraphs:
The first step in arriving at taxable income is to determine the
individual taxpayers’ gross income. . . .
In determining whether the income is personal to the defendants, you
may consider several factors, including whether the defendants
actually received the money, how the money was used, the intent of
the parties as determined by all of the circumstances, the economic
realities, and the substance and the form of the transaction.
Jury Instruction No. 31, ROA, Vol. V, Doc. 188, at 34. The district court,
however, refused to include an additional paragraph that the defendants had
proposed as part of this instruction. This paragraph stated:
However, the fact that a defendant owns a corporation and makes
decisions regarding corporate monies does not mean that the
corporation’s income is taxable to him or her personally because, by
definition, the owner of a corporation always has control over
corporate monies.
L.M. Opening Br. at 34 n.12. 16 Leslie Mower’s counsel, Neil Kaplan, acquiesced
in this final jury instruction:
THE COURT: We’re going to replace 35 and 36 with the
Mowers’ proposal, with the third paragraph
16
Although the text of the supposed instruction is not in the record on
appeal, the parties appear to agree on its content.
60
deleted. And then, in the second paragraph, the
phrase between the comma “rather than to their
corporations,” that’s out.
MR. KAPLAN: We’re fine. . . .
Jury Instruction Conference, ROA, Vol. XXV, at 28-29.
Because Leslie Mower agreed to the final language of Jury Instruction No.
31, we review for plain error. See United States v. Robertson, 473 F.3d 1289,
1291 (10th Cir. 2007). “Plain error exists only where (1) there was error, (2) that
is plain, (3) that affects substantial rights, and (4) that seriously affects the
fairness, integrity or public reputation of judicial proceedings.” Id. Here, the
district court did not err in refusing to include the defendants’ proposed
paragraph, so the first prong of our plain error standard disposes of Leslie
Mower’s argument. The language that ultimately appeared in Jury Instruction No.
31 was more than adequate to instruct the jury on the difference between
corporate and personal income. The omitted language, in contrast, could have
created confusion for the jury because it overemphasized the amount of control an
owner of a corporation appropriately exercises over corporate monies. The
omitted language also failed to account for the law regarding constructive
dividends—where the amounts are ultimately taxed twice, as both corporate and
shareholder income. See, e.g., Wortham Mach. Co. v. United States, 521 F.2d
160, 164 (10th Cir. 1975). The district court appropriately refused to include this
language. See United States v. Kaatz, 705 F.2d 1237, 1246 (10th Cir. 1983)
61
(“The instructions must be reviewed as a whole. The requested instruction would
have added nothing but confusion and was properly refused.” (citation omitted)).
B. Jury instruction regarding defendants’ theory of defense
The defendants also proposed a jury instruction regarding their theory of
defense. This proposed instruction stated:
As to Counts Two through Seven, if you have a reasonable doubt as
to whether . . . Leslie D. Mower willfully failed to report income . . .
she knew was personal income because . . . Leslie D. Mower
believed:
1. the monies were income or a loan to a corporation;
2. the monies were repayment of loans;
3. that taxes on the monies had been withheld and paid;
4. that for any other reason the monies were not taxable to [the
Mowers] personally,
then you must find . . . Leslie D. Mower not guilty, even if you also
have some question that additional taxes may still be due.
Theory of Defense Instruction, ROA, Vol. V, Doc. 186, at 4. 17 The district court
refused to include this instruction.
“Criminal defendants are entitled to jury instructions upon their theory of
defense provided there is evidentiary and legal support. Upon the failure to so
instruct, we will find reversible error.” United States v. Visinaiz, 428 F.3d 1300,
17
Again, Leslie Mower cites to an exhibit to Doc. 187, which is not in the
record. The government, however, cites to Doc. 186, which is in the record and
appears to include the exact same language.
62
1308 (10th Cir. 2005) (citation omitted). The district court, however, is not
required to give a theory of the defense instruction “if it would simply give the
jury a clearer understanding of the issues.” United States v. Wolny, 133 F.3d
758, 765 (10th Cir. 1998). Rather, the district court is only required to give the
instruction “if, without the instruction, the district court’s instructions were
erroneous or inadequate.” Id. “We review the instructions de novo to determine
whether, as a whole, they adequately apprised the jury of the issues and the
governing law.” Id.
Here, the district court’s instructions “adequately apprised the jury of the
issues and the governing law” regarding willfulness, and the rejected jury
instruction was unnecessary. Id. For instance, the district court instructed the
jury that “a failure to report income on a tax return, without willfulness, is not
sufficient to satisfy the requirement of an affirmative act of evasion.” Jury
Instruction No. 32, ROA, Vol. V, Doc. 188, at 35. Another jury instruction
provided:
The word “willfully,” as used in this tax statute means a voluntary,
intentional violation of a known legal duty. In other words, the
defendant must have acted voluntarily and intentionally and with the
specific intent to do something the law forbids; that is to say, with a
purpose either to disobey or to disregard the law. . . . [N]egligent
conduct, even grossly negligent conduct, a mistake,
misunderstanding, and/or a good faith belief, even if unreasonable, is
not sufficient to constitute willfulness.
Jury Instruction No. 33, id. at 36. In light of these jury instructions, the district
63
court was not required to give Leslie Mower’s proposed theory of the defense
instruction, which was “essentially [a] summar[y] of the evidence in the light
most favorable to the defense, [a] summar[y] that [was] more appropriate for
closing argument.” Wolny, 133 F.3d at 766 (citations, alteration, and internal
quotation marks omitted).
C. Lesser-included offense instruction
Leslie Mower argues that the district court erred in not providing a lesser-
included offense instruction for misdemeanor tax evasion. 18 She admits that she
did not request this instruction before the district court. Therefore, as we have
explained in a previous case, she may not be entitled to any appellate
review—even for plain error: “‘[T]his court has often held in noncapital cases
involving direct appeals that a trial court does not err in refusing to give a lesser
included instruction—even one supported by the evidence—if the defendant
neglects to make a proper request for one at trial.’” United States v. Bruce, 458
F.3d 1157, 1164 n.3 (10th Cir. 2006) (quoting Hooks v. Ward, 184 F.3d 1206,
1234-35 (10th Cir. 1999)). Nevertheless, in Bruce, 458 F.3d at 1164 & n.3, we
noted that we had “occasionally applied plain error review in contexts similar to
that at issue in this case,” and, given the facts in that case, we did not
“definitively decide the issue because Bruce’s claim fails even assuming plain
18
She never actually specifies which crime she is referencing, but
presumably it is 26 U.S.C. § 7203. The government assumes as much in its brief.
64
error review is applicable when a defendant fails to make a proper request for a
lesser-included-offense instruction.”
Likewise, even if we review Leslie Mower’s claim under our plain error
standard, it fails. Like the court in Bruce, 458 F.3d at 1164-66, we need only
address the fourth prong of the plain error test, because Leslie Mower has not
shown any error “that seriously affects the fairness, integrity or public reputation
of judicial proceedings.” “Under this standard, ‘we will not notice a
non-constitutional error, such as the one in the case before us, unless it is both
particularly egregious and our failure to notice the error would result in a
miscarriage of justice.’” Id. at 1165 (quoting United States v. Gonzalez-Huerta,
403 F.3d 727, 736 (10th Cir. 2005) (en banc)). Leslie Mower has the burden of
meeting this standard. Id. As discussed previously, there was more than enough
evidence to support Leslie Mower’s conviction of tax evasion under 26 U.S.C. §
7201, and Leslie Mower has not shown that a “miscarriage of justice” resulted
from the district court’s failure to instruct on the lesser-included offense of
misdemeanor tax evasion. Accord Bruce, 458 F.3d at 1165 (“Despite Bruce’s
protestations to the contrary, the government’s case against him was strong.”).
Leslie Mower’s sentencing
Leslie Mower appeals several issues with regard to her sentencing. She
argues that (1) her sentence was procedurally unreasonable because the district
court incorrectly calculated her tax loss and applied the Guidelines as mandatory;
65
(2) her sentence was substantively unreasonable under the factors listed in 18
U.S.C. § 3553(a); and (3) the application of the 2005 Guidelines violated the ex
post facto clause of the Constitution.
“When reviewing a sentencing challenge, we evaluate sentences imposed
by the district court for reasonableness.” United States v. Conlan, 500 F.3d 1167,
1169 (10th Cir. 2007) (citing United States v. Booker, 543 U.S. 220 (2005);
United States v. Kristl, 437 F.3d 1050, 1053 (10th Cir. 2006)); see also Gall v.
United States, --- U.S. ---, 128 S. Ct. 586, 594 (2007) (“[A]ppellate review of
sentencing decisions is limited to determining whether they are ‘reasonable.’”).
This inquiry includes both procedural and substantive components, and we
“review the sentence under an abuse-of-discretion standard.” Gall, 128 S. Ct. at
597. “Procedural reasonableness involves using the proper method to calculate
the sentence. Substantive reasonableness involves whether the length of the
sentence is reasonable given all the circumstances of the case in light of the
factors set forth in 18 U.S.C. § 3553(a).” Conlan, 500 F.3d at 1169 (citations
omitted).
A. Procedural reasonableness
1. Tax loss calculation
Leslie Mower challenges the procedural reasonableness of the district
court’s tax loss findings. First, she argues that the district court erred in failing to
apportion its tax loss findings by year. It does not appear that she raised this
66
issue before the district court, so we review for plain error. See Robertson, 473
F.3d at 1291.
The district court did not err in failing to apportion its tax loss findings by
year, and Leslie Mower’s claim fails under the first prong of our plain error test.
See id. Under the Guidelines, the district court was required to determine Leslie
Mower’s base offense level by calculating her tax loss and comparing it to the tax
loss table in U.S.S.G. § 2T4.1. See U.S.S.G. § 2T1.1(a)(1). For an offense
involving tax evasion, “the tax loss is the total amount of loss that was the object
of the offense (i.e., the loss that would have resulted had the offense been
successfully completed).” Id. § 2T1.1(c)(1). In addition, where “a defendant
[was] convicted of more than one count,” and the “counts involv[ed] substantially
the same harm,” the district court is required to group the counts together and
determine “the offense level corresponding to the aggregated quantity.” Id. §§
3D1.1(a)(1), 3D1.2(d) (citing § 2T1.1), 3D1.3(b). The district court, therefore,
appropriately grouped the counts against Leslie Mower and calculated her offense
level based upon “the aggregated quantity” of the tax loss. Id. § 3D1.3(b).
There is also no support for Leslie Mower’s argument that, because Thomas
Mower was convicted of tax evasion for the same amounts, the district court was
required to reduce her tax loss by fifty percent in calculating her base offense
level. Section 1B1.3(a)(1) of the Guidelines explains that
the base level offense . . . shall be determined on the basis of the
67
following: . . .
(B) in the case of a jointly undertaken criminal activity (a criminal
plan, scheme, endeavor, or enterprise undertaken by the
defendant in concert with others, whether or not charged as a
conspiracy), all reasonably foreseeable acts and omissions of
others in furtherance of the jointly undertaken criminal
activity,
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[.]
See also United States v. Bishop, 291 F.3d 1100, 1115 (9th Cir. 2002) (“Because
the defendants were convicted of conspiring to defraud the IRS, the total tax loss,
including the loss through the spouses, is attributable to each defendant. Tax loss
is determined from the reasonably foreseeable conduct of all co-actors, not just
the defendant’s own conduct.” (citation omitted)). Given this standard, it is far
more likely that the district court erred in not including the Hobble Creek
transaction, or all of the money from the Rezults account, in Leslie Mower’s tax
loss calculations than it is that the district court erred in not reducing her tax loss
by fifty percent.
The district court did commit one procedural error, but it was harmless. In
its tax loss findings, the district court stated that it was applying the 2005
Guidelines. At sentencing, though, the district court actually applied the 2001
Guidelines. As will be discussed, the district court was correct in applying the
2001 Guidelines. Under the “one-book rule” of the Guidelines, however, the
68
district court erred in using sections from two different versions of the
Guidelines. See U.S.S.G. § 1B1.11(b)(2). Nevertheless, the provision that the
district court cites in its tax loss findings—the tax loss table in U.S.S.G. §
2T4.1—is the same in the 2001 Guidelines as it is in the 2005 Guidelines for
calculating Leslie’s Mower’s base offense level. Compare U.S.S.G. § 2T4.1
(2005), with U.S.S.G. § 2T4.1 (2001). In addition, the sentencing table in both
sets of Guidelines is the same with regard to Leslie Mower, who had a total
offense level of 18 and a criminal history category of I. Compare U.S.S.G. ch. 5,
pt. A (2005), with U.S.S.G. ch. 5, pt. A (2001). Any error was harmless.
2. Application of the Guidelines
Leslie Mower argues that the district court violated Booker by applying the
Guidelines in a mandatory fashion, and therefore, her sentence was procedurally
unreasonable. Under the Supreme Court’s decision in Booker, 543 U.S. at 226-
27, 245, the Guidelines are advisory, and the district court may not apply them in
a mandatory fashion. Because Leslie Mower did not object to this alleged
sentencing error before the district court, we review for plain error. See United
States v. Begay, 470 F.3d 964, 976 (10th Cir. 2006); see also Booker, 543 U.S. at
268 (“[W]e expect reviewing courts to apply ordinary prudential doctrines,
determining, for example, whether the issue was raised below and whether it fails
the ‘plain-error’ test.”).
The district court did not apply the Guidelines in a mandatory fashion, and
69
Leslie Mower’s claim fails under the first prong of our plain error test. Leslie
Mower relies on two statements by the district court as evidence that it applied
the Guidelines in a mandatory fashion. The first is the district court’s statement
at sentencing, in response to her contention that her disabled son needed her at
home:
I am troubled by the relationship matter, but the law is so --
presumptions are so much against family problems to be taken into
consideration. You know, about one case out of three has something
like this, and the law has just developed steadily presumptively
against it and the presumption is that somehow arrangements can be
made. So as I said a minute ago, the 3553 factors lead me still to a
low end guideline sentence here without leading role applying.
L.M. Sentencing, ROA, Vol. XXIX, Doc. 350, at 23. This statement does not
show that the district court viewed the Guidelines as mandatory. Rather, the
district court is simply acknowledging that defendants often cite their family
responsibilities as a reason for imposing lighter sentences, and the law generally
discourages district courts from taking this into account. See United States v.
Hildreth, 485 F.3d 1120, 1129 (10th Cir. 2007) (“[I]ndeed, as a matter of policy,
the Guidelines discourage courts from considering family ties and responsibilities
in sentencing decisions.” (citing U.S.S.G. § 5H1.6)).
The second statement came in response to Leslie Mower’s request on
February 26, 2007, that the district court “recommend to the Bureau of Prisons
that she be placed in a Community Correctional Facility pursuant to the factors
set forth in 18 U.S.C. § 3621(b).” Doc. 354, at 2 (citing Wedelstedt v. Wiley, 477
70
F.3d 1160 (10th Cir. 2007)). The district court responded with the following:
Defendant’s current back problems have arisen since sentencing.
Although the court will not affirmatively recommend placement in a
community correctional center, the court would not oppose [her]
placement in a community correctional center. Her current health
problems and the fact that such a placement would afford her
increased access to her treating physicians certainly weigh in favor of
such a placement. She also poses no threat to the community.
02/28/07 Order, Doc. 360, at 2. This statement does not show that the district
court viewed the Guidelines as mandatory. Indeed, this statement came months
after sentencing, and even then, the district court did not indicate that it felt in
any way constrained by the Guidelines. See id. Instead, the district court
appropriately examined her circumstances and decided not to “recommend
placement in a community correctional facility.” Id.
In addition, the district court explained at sentencing that it had applied the
sentencing factors under 18 U.S.C. § 3553(a). See L.M. Sentencing, ROA, Vol.
XXIX, Doc. 350, at 23 (“[T]he 3553 factors lead me still to a low end guideline
sentence here . . . .”). Given this explanation, and the lack of any evidence that
the district court viewed the Guidelines as mandatory, Leslie Mower’s sentence
was procedurally reasonable. 19
19
In a separate section of her brief on appeal, Leslie Mower argues that the
district court violated United States v. Booker, 543 U.S. 220 (2005). This appears
to be a restatement of her argument that the district court applied the Guidelines
in a mandatory fashion.
71
B. Substantive reasonableness
As the Supreme Court recently explained in Kimbrough v. United States, --
- U.S. ---, 128 S. Ct. 558, 564 (2007), “‘reasonableness’ is the standard
controlling appellate review of the sentences district courts impose.” We review
for substantive reasonableness “under an abuse-of-discretion standard,” and,
“[w]hen conducting this review, [we] will, of course, take into account the totality
of the circumstances, including the extent of any variance from the Guidelines
range.” Gall, 128 S. Ct. at 597. Moreover, we may apply a presumption of
reasonableness to a sentence properly calculated under the Guidelines. Id. “‘The
defendant may rebut this presumption by demonstrating that the sentence is
unreasonable in light of the other sentencing factors laid out in [18 U.S.C.] §
3553(a).’” United States v. Arrevalo-Olvera, 495 F.3d 1211, 1213 (10th Cir.
2007) (quoting Kristl, 437 F.3d at 1055) (alteration in original).
Under the district court’s tax loss findings, Leslie Mower’s sentence was
within the Guidelines range, and we accord it a presumption of reasonableness.
Id. Leslie Mower has failed to demonstrate that the sentence is unreasonable in
light of the factors listed in 18 U.S.C. § 3553(a). We therefore hold that the
district court did not abuse its discretion, and we affirm her sentence as
substantively reasonable.
C. Leslie Mower’s sentence under the ex post facto clause
Leslie Mower argues that the district court violated the ex post facto clause,
72
U.S. Const., art. I, § 9, cl. 3, by sentencing her under the 2005 Guidelines, rather
than the 1989 Guidelines. She concedes that she did not object to the district
court on this ground, so our review is only for plain error.
The district court did not err here, and, as a result, Leslie Mower’s ex post
facto claim fails under the first prong of our plain error test. See Robertson, 473
F.3d at 1291. “A sentencing court is generally required to apply the Guidelines
that are in effect on the date the defendant is sentenced.” United States v. Gerber,
24 F.3d 93, 95 (10th Cir. 1994); see also 18 U.S.C. § 3553(a)(4)(A)(ii); U.S.S.G.
§ 1B1.11(a). However, the ex post facto clause “bars the sentencing court from
retroactively applying an amended guideline provision when that amendment
disadvantages the defendant.” Gerber, 24 F.3d at 95-96 (citation and internal
quotation marks omitted). To determine whether the application of a version of
the Guidelines violates the ex post facto clause, we use a two-prong test: “first,
did the sentencing court apply the guideline to events occurring before its
enactment, and second, did that guideline disadvantage the offender affected by
it.” Id. at 96 (citations and internal quotation marks omitted).
In the instant case, the district court correctly applied the 2001 version of
the Guidelines in sentencing Leslie Mower. 20 The district court explained:
20
As discussed above, the district court did err in applying the 2005
Guidelines in calculating Leslie Mower’s tax loss, but because the 2005
Guidelines were the same as the 2001 Guidelines in this regard, such error was
(continued...)
73
I think the evidence is that there were overt acts after 2001. I don’t
think that’s inconsistent with the loss findings. So I’m going to
apply the 2001 guidelines.
T.M. Sentencing, ROA, Vol. XXIX, Doc. 325, at 18; see also L.M. Sentencing,
ROA, Vol. XXIX, Doc. 350, at 7 (same rationale applies). The district court was
correct that the evidence showed overt acts (for conspiracy) and affirmative acts
of evasion (for the six counts of tax evasion) that occurred after 2001. Given that
all of her offenses continued after the date on which the 2001 Guidelines became
effective, the district court did not violate the ex post facto clause by applying the
2001 Guidelines at her sentencing. See United States v. Sullivan, 255 F.3d 1256,
1259 (10th Cir. 2001) (“Because the defendant completed the second offense after
the amendment to the guidelines took effect, the ex post facto clause does not
prevent determining the sentence for that count based on the amended
guidelines.” (quoting U.S.S.G. § 1B1.11 cmt. background)); cf. U.S.S.G. §
1B1.11(b)(1) (explaining that, if the ex post facto clause would otherwise be
violated, “the court shall use the Guidelines Manual in effect on the date that the
offense of conviction was committed”).
20
(...continued)
harmless. For similar reasons, this did not “disadvantage” Leslie Mower for the
purposes of our ex post facto clause analysis.
74
III.
The convictions and sentences of Thomas Mower, Leslie Mower, and James
Thompson are AFFIRMED.
75