United States v. Mudekunye

PER CURIAM:

Fabian Muyaba, Joseph Mudekunye, and three co-defendants were charged in a 39-count indictment stemming from their tax-fraud conspiracy. Muyaba, Mudekunye, and one co-defendant were convicted in a joint jury trial. Muyaba challenges the sufficiency of the evidence to support his convictions; the district court’s applying two Sentencing Guideline enhancements; and its ordering part of his sentence to run consecutively. Mudekunye challenges its failure to sever his trial from Muyaba’s; and his sentence as being procedurally unreasonable. We AFFIRM in part and VACATE and REMAND in part.

I.

From 2004 to 2007, Mudekunye and Muyaba worked as tax preparers at Reliable Tax Services in Dallas, Texas, where they participated in a conspiracy to file fraudulent tax returns. In 2007, Muyaba began operating Efficient Tax Service, where he and Mudekunye prepared tax returns in a similar, fraudulent manner.

At both Reliable and Efficient, Mudekunye and Muyaba falsified tax returns in several ways, inter alia: changing their clients’ filing status (“single” to “head of household”); and claiming losses for nonexistent businesses. Upon receiving their tax refunds, the clients were charged size-able and misleading fees.

To avoid IRS detection, Reliable submitted returns using a different Electronic Filer Identification Number each year. Defendants also hid their fraudulent operations by denying their clients copies of their returns, despite repeated requests. Consequently, until they were contacted by the IRS, many clients were unaware their tax returns contained false information.

Following a Government investigation, Mudekunye, Muyaba, and three co-defendants were charged in the 39-count indictment. All were charged with conspiracy to prepare fraudulent tax returns, in violation of 18 U.S.C. § 371. Mudekunye and Muyaba were each charged with multiple counts of: aiding and assisting in the preparation of fraudulent tax returns, in violation of 26 U.S.C. § 7206(2); aiding and abetting, in violation of 18 U.S.C. § 2 and 26 U.S.C. § 7206(2); and identity theft, in violation of 18 U.S.C. § 1028(a)(7) and (c)(3)(A).

At the conclusion of the Government’s case-in-chief, Muyaba’s motion for judgment of acquittal was granted for three counts. A jury found Muyaba guilty on seven of ten counts; Mudekunye, six of 12.

Muyaba was sentenced, inter alia, to 120 months’ imprisonment: 60 on count 1 (conspiracy); a consecutive 24 on count 33 (preparation of fraudulent tax forms); and 36 each on counts 27-28 and 30-32 (same offense), to run concurrently with each other, but consecutive to the sentences for counts 1 and 33. Mudekunye received, *285inter alia, 97 months’ imprisonment: 60 on count 1 (conspiracy); 36 on counts 7, 9, and 25 (preparation of fraudulent tax forms); and 97 on counts 35-36 (identity theft), to run concurrently.

II.

Muyaba’s, then Mudekunye’s, claims are addressed. Analysis of one or more claims for each is restricted because their review is only for plain error.

A.

Muyaba presents two challenges to his convictions; four, to his sentence. Each fails.

1.

Muyaba preserved his sufficiency challenge by moving, pursuant to Federal Rule of Criminal Procedure 29(a), for judgment of acquittal at the close of both the Government’s case-in-chief and all the evidence. Accordingly, review is de novo. E.g., United States v. Simmons, 470 F.3d 1115, 1120 (5th Cir.2006). His “verdict will be affirmed if a reasonable trier of fact could conclude from the evidence that the elements of the offense were established beyond a reasonable doubt”. Id. (citation and internal quotation marks omitted). All evidence is viewed, and reasonable inferences drawn, in the light most favorable to the verdict; “we evaluate neither the weight of the evidence nor the credibility of the witnesses”. Id. “ ‘The evidence need not exclude every reasonable hypothesis of innocence or be wholly inconsistent with every conclusion except that of guilt, and the jury is free to choose among reasonable constructions of the evidence.’ ” United States v. Anderson, 174 F.3d 515, 522 (5th Cir.1999) (quoting United States v. Burton, 126 F.3d 666, 669-70 (5th Cir. 1997)).

a.

For his sufficiency challenge to his conspiracy conviction, Muyaba contends: the evidence did not show he worked at Reliable; and, therefore, the Government did not establish his involvement in the tax-fraud conspiracy there. The Government had to prove beyond a reasonable doubt that “defendant either positively or tacitly agreed with another person to accomplish a common and unlawful plan, and that during the existence of the conspiracy, one of the conspirators knowingly committed an overt act in furtherance of the conspiracy”. United States v. Bourgeois, 950 F.2d 980, 983 (5th Cir.1992). The agreement need not be explicit, and “may be inferred from a concert of action”. United States v. Mann, 161 F.3d 840, 847 (5th Cir.1998) (citation and internal quotation marks omitted).

The evidence established that Muyaba worked as a tax preparer at Reliable; had a cubicle there; was engaged by many clients when they visited it for tax-filing help; and was one of several of its tax preparers who fraudulently prepared returns. A rational trier of fact could find, beyond a reasonable doubt, that Muyaba was part of the conspiracy.

b.

Muyaba also makes a sufficiency challenge to his conviction for aiding and assisting in the preparation of false and fraudulent tax forms at Reliable. The Government had to prove, beyond a reasonable doubt, that Muyaba “willfully aided, assisted, counseled, or advised another in the preparation or presentation under the internal revenue laws of a document that is fraudulent or false as to any material matter”. United States v. Clark, 577 F.3d 273, 285 (5th Cir.2009) (citation and internal quotation marks omitted).

*286A reasonable jury could have found Muyaba guilty on those counts. Evidence established that, while working at Reliable (and Efficient), Muyaba presented himself as a tax-return preparer; discussed tax returns and refunds with his clients; received tax-preparation information from them; and claimed business losses, credits, and deductions on their returns that were neither substantiated nor requested.

Muyaba insists some of the trial testimony was “incredible and unworthy of belief’. As noted, the evidence’s being sufficient does not require the removal of all doubt, e.g., Anderson, 174 F.3d at 522; and, it is not our role to evaluate witness credibility — that, of course, is for the jury, Simmons, 470 F.3d at 1120. Moreover, to the extent Muyaba contends there was a lack of evidence showing he filed the fraudulent returns, he misstates the elements for violation of 26 U.S.C. § 7206(2): that defendant must file the return is not one of them. See Clark, 577 F.3d at 285.

2.

In challenging two enhancements to his offense level, Muyaba contends: the one for leader-or-organizer does not apply to him; and the one for obstruction-of-justice was applied incorrectly because he did not commit perjury at trial. The district court’s findings of fact for sentencing are reviewed for clear error; its application and interpretation of the Guidelines, de novo. United States v. Creech, 408 F.3d 264, 270 n. 2 (5th Cir.2005). Of course, the leader-or-organizer and obstruction-of-justice enhancements involve factual findings, reviewed for clear error; however, “[a] ruling that ... findings permit an obstruction-of-justice enhancement is a question of law, reviewed de novo”. United States v. Miller, 607 F.3d 144, 148 (5th Cir.2010) (citations and internal quotation marks omitted). “A factual finding is not clearly erroneous if it is plausible in light of the record read as a whole.” United States v. Valencia, 44 F.3d 269, 272 (5th Cir.1995).

a.

Guideline § 3Bl.l(c) provides: “If the defendant was an organizer, leader, manager, or supervisor in any criminal activity ..., increase [his offense level] by 2 levels”. Its commentary states:

To qualify for an adjustment under this section, the defendant must have been the organizer, leader, manager, or supervisor of one or more other participants. An upward departure may be warranted, however, in the case of a defendant who did not organize, lead, manage, or supervise another participant, but who nevertheless exercised management responsibility over the property, assets, or activities of a criminal organization.

U.S.S.G. § 3B1.1 cmt. n. 2.

The court applied the two-level enhancement based upon finding that Muyaba “was an organizer and a leader in the Efficient Tax Service”, serving as its owner, and the employer of at least one other person, Mudekunye. In contesting this enhancement based upon his role at Efficient, although he is silent about his work there, Muyaba maintains the district court clearly erred because “he didn’t play as big a part in Reliable as the others”. The enhancement was based upon Muyaba’s role at Efficient, not Rehable.

b.

In challenging his obstruction-of-justice enhancement for perjury at trial, Muyaba maintains: his testimony about Amber Redden was his “belief’, which is insufficient to be classified as a lie; and evidence of Muyaba’s wife having removed his office documents following his arrest is *287insufficient to show he lied about not having access to his business records. The Guideline provides:

If (A) the defendant willfully obstructed or impeded, or attempted to obstruct or impede, the administration of justice with respect to the investigation, prosecution, or sentencing of the instant offense of conviction, and (B) the obstructive conduct related to (i) the defendant’s offense of conviction and any relevant conduct; or (ii) a closely related offense, increase the offense level by 2 levels.

U.S.S.G. § 3C1.1. Additionally, “the court should be cognizant that inaccurate testimony or statements sometimes may result from confusion, mistake, or faulty memory and, thus, not all inaccurate testimony or statements necessarily reflect a willful attempt to obstruct justice”. U.S.S.G. § 3C1.1 cmt. n. 2; see also United States v. Greer, 158 F.3d 228, 239 (5th Cir.1998) (noting courts “must carefully consider whether the defendant has engaged in [obstructive] behavior in a conscious and deliberate attempt to obstruct or impede the administration of justice”).

Muyaba testified he had no access, post-arrest, to documents at Efficient; however, other evidence showed his testimony was false because his wife had then retrieved those documents. Additionally, Muyaba testified that he believed one of his clients, Redden, had employed Muyaba’s brother in Missouri to complete her return. Redden’s testimony, however, was that she did not know Muyaba’s brother, and had watched Muyaba complete it.

In addition, there were manifest inconsistencies in other portions of his testimony. In applying the enhancement, the court adopted the presentence investigation report’s (PSR) discussion of Muyaba’s inconsistent trial testimony. For example, he testified he never worked for Reliable, even though, as discussed supra, significant evidence established that he did. Muyaba also denied completing and signing fraudulent returns; however, that testimony conflicts with extensive evidence of fraudulent claims on returns he completed and signed. The court ruled: the inconsistencies in Muyaba’s testimony were “material to whether he was guilty ... of the counts ... against him, and ... his statements on these issues [did] not result from confusion, mistake, or faulty memory, but [were] instead a willful and deliberate attempt to obstruct justice”.

3.

Muyaba also contends the district court erred in ordering that his sentence for count 33 be consecutive to those for counts 27-28 and 30-32. He maintains: the sentences for each count should have been grouped and ordered to run concurrently because, under Guideline § 3D1.2, those counts charged him for the same offense, violations of 26 U.S.C. § 7206(2) that were for “substantially the same harm”.

Because Muyaba did not so object at sentencing, review is only for plain error. E.g., United States v. Ronquillo, 508 F.3d 744, 748 (5th Cir.2007). For reversible plain error, defendant must show a clear or obvious error that affects his substantial rights. Puckett v. United States, 556 U.S. 129, 129 S.Ct. 1423, 1429, 173 L.Ed.2d 266 (2009). If he does so, our court has discretion to correct that error, and generally will do so only if it seriously affects the fairness, integrity, or public reputation of judicial proceedings. Id.

a.

The PSR grouped all counts as “Closely Related”, including the six counts for violations of § 7206(2) (27-28 and 30-33). Because one count of conviction was for conspiracy to prepare fraudulent tax *288returns, Muyaba’s offense level was based on the total amount of tax loss attributed to his offenses. See U.S.S.G. §§ 2T1.9(a)(l), 2Tl.l(a)(l), 2T4.1 (Tax Table). That loss amount, combined with the enhancements discussed supra, resulted in Muyaba’s having an advisory Guideline sentencing range of 97-121 months. In challenging his sentence, Muyaba fails to account for the mandatory requirements of Guideline § 5G1.2, which provides, inter alia:

If the sentence imposed on the count carrying the highest statutory maximum is less than the total punishment, then the sentence imposed on one or more of the other counts shall run consecutively, but only to the extent necessary to produce a combined sentence equal to the total punishment In all other respects, sentences on all counts shall run concurrently, except to the extent otherwise required by law.

U.S.S.G. § 5G1.2(d) (emphasis added).

For Muyaba, the count carrying the highest statutory maximum sentence was count 1 (conspiracy to prepare fraudulent tax returns), with a statutory maximum of 60 months’ imprisonment. Each of the other counts (fraudulent-tax-return preparation) had a statutory maximum of 36 months. Therefore, if the court had imposed concurrent sentences for all counts of conviction, Muyaba’s total sentence would have been 60 months’ imprisonment, well below his advisory range of 97 to 121 months, and in contravention of Guideline § 5G1.2(d).

b.

Muyaba also claims ineffective assistance of counsel (IAC) because: his counsel did not object at sentencing to the sentence for count 33 being consecutive (deficient performance); and Muyaba was prejudiced because he accordingly received 24 additional months of imprisonment. E.g., Strickland v. Washington, 466 U.S. 668, 687, 104 S.Ct. 2052, 80 L.Ed.2d 674 (1984).

We “resolve [IAC] claims ... on direct appeal only in rare cases where the record allow[s] us to evaluate fairly the merits of the claim”. United States v. Higdon, 832 F.2d 312, 314 (5th Cir.1987). This is one of those instances because the record is adequately developed. Because, as discussed supra, the consecutive-sentence claim has no merit, the requisite deficient performance does not exist.

B.

Mudekunye claims: his trial should have been severed from Muyaba’s; and, on two grounds, his sentence was procedurally unreasonable.

1.

Although Mudekunye moved to sever prior to trial, he did so only with respect to co-defendant Niehelle Henson not with respect to Muyaba. Nevertheless, he contends the district court erred by not severing his trial from Muyaba’s, and claims resulting prejudice. Because this issue is raised for the first time on appeal, review is only for plain error. E.g., United States v. Misher, 99 F.3d 664, 669 (5th Cir.1996).

Severance vel non is within the discretion of the district court: it should be granted “only if there is a serious risk that a joint trial would compromise a specific trial right of one of the defendants”, and limiting instructions to the jury will often cure any prejudice resulting from a joint trial. Zafiro v. United States, 506 U.S. 534, 539, 113 S.Ct. 933, 122 L.Ed.2d 317 (1993). Mudekunye must show “specific and compelling prejudice against which the district court could not provide adequate protection, and that this preju*289dice resulted in an unfair trial”. United States v. Stouffer, 986 F.2d 916, 924 (5th Cir.1993). Mudekunye fails to do so; instead, he complains generally.

As discussed, a generalized showing of prejudice is insufficient. E.g., United States v. Solis, 299 F.3d 420, 441 n. 46 (5th Cir.2002) (“severance issues are fact-specific, requiring a showing of specific compelling prejudice” (citation and internal quotation marks omitted)); Stouffer, 986 F.2d at 924. In addition, substantial evidence directly implicating Mudekunye in the conspiracy removes any concern that not severing subjected him to “manifest injustice”. United States v. Carreon, 11 F.3d 1225, 1240 (5th Cir.1994). Last, the instructions alleviated any risk of prejudice arising from a joint trial. See United States v. Bernard, 299 F.3d 467, 476 (5th Cir.2002). The jury was instructed to consider each defendant’s charges separately, and this court must presume that it heard, understood, and followed those instructions. Richardson v. Marsh, 481 U.S. 200, 211, 107 S.Ct. 1702, 95 L.Ed.2d 176 (1987). Defendants’ being acquitted on some charges reflects the jury was able to consider, and weigh separately, each of the charges. United States v. Ellender, 947 F.2d 748, 755 (5th Cir.1991).

2.

Mudekunye contends his sentence was procedurally unreasonable because the court erroneously applied two sentencing enhancements for the same conduct. Because Mudekunye failed to raise this objection below, plain error review applies. See United States v. Hernandez-Martinez, 485 F.3d 270, 272-73 (5th Cir.2007).

a.

Under the Guidelines, if a § 2T1.4(b)(l) enhancement is applied at sentencing, a § 3B1.3 enhancement should not be. U.S.S.G. § 2T1.4(b)(l) cmt. n. 2. The Government concedes that the district court erred in applying both enhancements and that this error was clear. The application of the § 3B1.3 enhancement resulted in a total offense level of 28. Combined with Mudekunye’s criminal history category of I, the application of the enhancement resulted in an advisory sentencing range of 78 to 97 months. The correct Guidelines range is 63 to 78 months. See U.S.S.G. Ch. 5 Pt. A (Sentencing Table). The incorrect Guidelines range (78-97 months) and the correct Guidelines range (63-78 months) overlap by one month as the top of the correct range and the bottom of the incorrect range are the same: 78 months.

b.

To satisfy the third prong of plain-error review, the error must have affected the defendant’s substantial rights, which ordinarily requires the defendant to show that the error “affected the outcome of the district court proceedings.” United States v. John, 597 F.3d 263, 284 (5th Cir.2010) (quotation omitted). A sentencing error affects a defendant’s substantial rights if he can show a reasonable probability that, but for the district court’s misapplication of the Guidelines, he would have received a lesser sentence. United States v. Blocker, 612 F.3d 413, 416-17 (5th Cir.2010). Our precedent is clear that absent additional evidence, a defendant has shown a reasonable probability that he would have received a lesser sentence when (1) the district court mistakenly calculates the wrong Guidelines range, (2) the incorrect range is significantly higher than the true Guidelines range, and (3) the defendant is sentenced within the incorrect range. See, e.g., John, 597 F.3d at 284-85 (holding that an imposed sentence affects a defendant’s substantial rights when it significantly exceeds the high- and low-ends of applicable *290Guidelines range); United States v. Jasso, 587 F.3d 706, 713 n. 10 (5th Cir.2009) (“In cases where this Court has found plain error, the gap between the correct and erroneous sentences has been sufficient enough that there was an apparent, reasonable probability that the defendant would have received a lesser sentence but for the district court’s error.”) (collecting cases).

There is a second line of precedent relevant to this case. These cases hold that when the correct and incorrect ranges overlap and the defendant is sentenced within the overlap, “we do not assume, in the absence of additional evidence, that the sentence affects a defendant’s substantial rights.” Blocker, 612 F.3d at 416. This default (or presumption) is undeniably sensible, because the defendant is still sentenced within the applicable Guidelines range.

Mudekunye’s case does not neatly fall into either line of precedent. The correct and incorrect sentencing ranges overlap by one month, but he was sentenced well outside the one month overlap, 19 months above the correct range. No published cases have addressed the same fact scenario, but in an unpublished case, United States v. Carrizales-Jaramillo, we remanded for resentencing in a similar situation. 303 Fed.Appx. 215, 217 (5th Cir.2008) (per curiam) (unpublished) (vacating a 31-month imposed sentence based on an incorrect Guidelines calculation of 30-37 months rather than 24-30 months). While this case is not binding, it is persuasive and supports the conclusion that the reasoning applicable to our “no overlap” line of cases best applies here. That is, where it is “not apparent from the record that [the defendant] would have received an above-Guidelines sentence,” the imposed sentence affects the defendant’s substantial rights. John, 597 F.3d at 285 (holding that a sentence 21 months above the high end and 38 months above the low end of the correct Guidelines range violated the defendant’s substantial rights).

It is not apparent from the record that Mudekunye would have received an above-Guidelines sentence of 97 months if the district court had calculated the Guidelines correctly. See John, 597 F.3d at 285. The sentencing judge stated that Mudekunye’s “sentence happens to be within the Guideline range” and that it “is the appropriate sentence in this case given all of the facts and circumstances.” The government argues that these phrases indicate that the court would have imposed the same sentence regardless of the correct Guidelines range. We cannot arrive at the same conclusion. The court’s comments are vague and ambiguous, in contrast to other cases in which we have held that the court’s statements eliminate any reasonable probability of a lesser sentence. In these cases, the sentencing court stated explicitly and unequivocally that the imposed sentence was the correct sentence regardless of the applicable Guideline ranges. See United States v. Bonilla, 524 F.3d 647, 656 (5th Cir.2008) (finding that district court imposed a valid alternative non-Guidelines sentence when it considered the correct and incorrect ranges and stated: “I believe that I have calculated the guidelines correctly, but even if I am wrong about the guidelines, this is the sentence that I would impose in any event.”); United States v. Lemus-Gonzalez, 563 F.3d 88, 94 (5th Cir.2009) (finding no reasonable probability of a lesser sentence where the district court considered both the correct and incorrect ranges and stated that it would have imposed the same sentence in any event). The record does not establish that Mudekunye would have received an above-Guidelines sentence of 97 months if the district court had calculated the Guidelines correctly.

*291In light of the significant disparity between Mudekunye’s sentence and the top of the correct Guidelines range and the absence of any evidence suggesting that the court would have sentenced Mudekunye to 97 months’ imprisonment irrespective of the correct Guidelines range, Mudekunye has shown a reasonable probability of a lesser sentence and therefore, demonstrated that the court’s clear error affected his substantial rights.

c.

Even where a defendant’s substantial rights are violated, our court retains discretion to correct the reversible plain error only if it seriously affects the fairness, integrity, or public reputation of judicial proceedings. Puckett, 129 S.Ct. at 1429. The substantial disparity between the imposed sentence and the applicable Guidelines range warrants the exercise of our discretion to correct the error. See United States v. Gonzalez-Terrazas, 529 F.3d 293, 299 (5th Cir.2008) (concluding that the imposition of a sentence that was substantially greater than the Guidelines range affected the defendant’s substantial rights and the fairness of the judicial proceedings). We vacate Mudekunye’s sentence and remand for resentencing.1

III.

For the foregoing reasons, we AFFIRM on every ground with the exception of Mudekunye’s sentence which we VACATE and REMAND for resentencing.

. Because we vacate and remand for resentencing, we need not address Mudekunye's argument that his sentence was procedurally unreasonable because the sentencing court treated the Guidelines as mandatory and ignored mitigating factors.