United States v. Olbres

                  UNITED STATES COURT OF APPEALS
                      FOR THE FIRST CIRCUIT

                                             

No. 94-2123

                    UNITED STATES OF AMERICA,

                            Appellant,

                                v.

             ANTHONY G. OLBRES and SHIRLEY A. OLBRES,

                      Defendants, Appellees.

                                              

           APPEAL FROM THE UNITED STATES DISTRICT COURT

                FOR THE DISTRICT OF NEW HAMPSHIRE

         [Hon. Steven J. McAuliffe, U.S. District Judge]
                                                                 

                                              

                              Before

                      Selya, Circuit Judge,
                                                    

                  Coffin, Senior Circuit Judge,
                                                        

                     and Cyr, Circuit Judge.
                                                     

                                             

     Karen Quesnel,  Attorney, Tax Division, United  States Dep't
                            
of  Justice, with  whom  Loretta C.  Argrett, Assistant  Attorney
                                                      
General,  Robert E.  Lindsay and  Alan Hechtkopf,  Attorneys, Tax
                                                          
Division, and  Paul M. Gagnon,  United States  Attorney, were  on
                                       
brief, for the United States.
     Terry Philip  Segal, with whom Matthew  H. Feinberg, Matthew
                                                                           
A. Kamholtz,  Segal &  Feinberg, Steven  M. Gordon,  and Shaheen,
                                                                           
Cappiello, Stein & Gordon were on joint brief, for appellees.
                                   

                                              

                          July 26, 1995

                                              

          SELYA, Circuit  Judge.   In  1989, an  employee of  the
                    SELYA, Circuit  Judge.
                                         

Internal Revenue Service (IRS) noticed a Rolls Royce belonging to

the  defendants, Anthony  and  Shirley Olbres,  parked outside  a

restaurant  in Exeter, New Hampshire.  The presence of so opulent

a vehicle in so  bucolic a setting piqued the  taxman's interest.

He initiated  an investigation  that led,  in  succession, to  an

audit,  an indictment, a trial,  and a conviction  for income tax

evasion pursuant to  a jury  verdict.1  The  district court  then

trumped the jury's verdict,  granting the defendants' motions for

judgments of acquittal.  See United States v. Olbres, Cr. No. 93-
                                                              

27-1-2-M (D.N.H. Sept. 30,  1994) (D. Ct. Op.).2   The government

appeals.  We reinstate the convictions.

I.  BACKGROUND
          I.  BACKGROUND

          We    start    by    relating   certain    (essentially

uncontradicted) facts that serve  to put the appeal into  initial

perspective.   In 1974, the Olbreses   he an industrial designer,

she a schoolteacher destined to become a self-taught bookkeeper  

launched a proprietorship, Design Consultants (DC),  to conceive,

construct, and erect exhibit  booths for trade shows.   At first,
                    
                              

     1The statute of conviction provides in relevant part:

          Any  person  who  willfully  attempts  in any
          manner to evade or  defeat any tax imposed by
          [the  Internal Revenue  Code] or  the payment
          thereof shall, in addition to other penalties
          provided by law, be guilty of a felony . . .

26 U.S.C.   7201 (1988).

     2Although  the   district  court's  thoughtful   opinion  is
unpublished, the  interested  reader can  locate  it at  1994  WL
543520.

                                2


the proprietors comprised  the entire work  force.  The  business

grew  steadily,  and  by 1987  DC  employed  23  persons and  had

revenues in excess of $1,900,000.  Despite the  phenomenal growth

of the business,  Shirley Olbres continued  to handle the  books,

toiling  part-time,  mostly  at  home.    Her  working  materials

consisted of an invoice log (in which she recorded bills sent and

payments  received), and three journals reflecting, respectively,

cash receipts, cash disbursements, and petty cash.

          Beginning in 1976, the defendants retained the services

of an accountant,  Wilson Dennett.   Dennett compiled income  tax

returns and financial statements, but did not perform bookkeeping

or kindred services.  He prepared the tax returns in reliance  on

information  supplied by  the defendants.   For  the tax  year at

issue on this appeal   1987   Shirley Olbres drafted a summary of

the defendants' books and records for Dennett's use.  She and her

husband  then met with Dennett to answer questions.  When Dennett

completed the  return,  the defendants  came  to his  office  and

signed it.

          The  defendants maintained various bank accounts during

1987.  These  included business checking and  savings accounts at

Indian  Head Bank  (IHB).   Defendants  deposited  most of  their

business  receipts  into  the   business  checking  account,  but

occasionally  deposited  business  receipts  into   the  business

savings  account.   While    Shirley  Olbres  recorded  all  sums

deposited into the business checking account in the cash receipts

journal,  she did  not make  comparable entries  showing deposits

                                3


made  to  the business  savings account.    During the  same time

frame,  the defendants  also  maintained payroll  and petty  cash

accounts at a  second bank,  and a rent-receipts  account in  the

name of Seabrook Properties at yet a third financial institution.

          The IRS started its investigation into the  defendants'

tax  returns in  1989.   Revenue Agent  Leonard Kaply  pulled the

laboring oar.  He determined, inter alia, that the defendants had
                                                  

substantially underreported  their income on their  joint federal

income tax returns  for the years  1986 through 1988.   For 1987,

Kaply's audit indicated that the defendants had failed to  report

nearly  $750,000 in  income  from three  sources:   (1)  business

receipts deposited directly into the business savings account and

not recorded in  the cash  receipts journal; (2)  rebates from  a

transportation company that had contracted with DC  to move trade

show booths from  place to  place;3 and (3)  certain income  from

rental property.  In the course of the audit, the defendants gave

Agent  Kaply  the cash  receipts  journal,  but  claimed to  have

misplaced  the invoice  log  and the  passbook  for the  business

savings  account (either of which would have revealed much of the

unreported income).  It was only when the IRS issued a summons to

IHB that  it discovered the  business savings  account, with  its

trove of unreported funds.

          The IRS concluded that  the defendants willfully failed

                    
                              

     3For  no easily  explicable reason,  these rebates  had been
deposited into the Seabrook  Properties account, omitted from the
summary  prepared  by Mrs.  Olbres  for  Dennett's  use, and  not
mentioned in the defendants' ensuing dialogue with Dennett.

                                4


to  report substantial amounts of income on their 1986, 1987, and

1988 federal tax returns ($150,954 in 1986, $748,991 in 1987, and

$175,432 in  1988).  The defendants  conceded the underreporting,

but denied  criminal responsibility, saying that  they lacked any

intent  to defraud.4  A federal grand jury returned a three-count

indictment charging the  defendants with willfully  attempting to

evade income tax for those three years.  The case was tried  to a

jury.  The defendants moved for judgments of acquittal at the end

of the government's case,  and again when both sides  had rested.

See Fed. R. Crim. P. 29(a).  The district court  denied the first
             

set of motions and reserved decision on the second set.  See Fed.
                                                                      

R. Crim. P. 29(b).  On January 24, 1994, the jury reached a split

decision:   it found the defendants not  guilty on count 1 (1986)

and count 3 (1988), but guilty on count 2 (1987).

          After  a gestation  period of  nearly nine  months, the

district court, acting  in pursuance  of the  earlier Rule  29(b)

reservation,  granted  the defendants'  motions for  judgments of

acquittal  on count  2.   The government  then filed  this timely

appeal.

II.  ANALYSIS
          II.  ANALYSIS

          Our  analysis of  this case  is partitioned  into three

segments.  First,  we limn the  standard of  review.  Second,  we

examine  the  elements  of  the  offense  of conviction  and  the

sufficiency  of the evidence.  Third, we  explain why we find the
                    
                              

     4The defendants placed much of the onus on their accountant,
Dennett,  who died prior  to the trial.   For the  most part, his
knowledge of the facts died with him. 

                                5


district court's analysis unpersuasive.

                     A.  Standard of Review.
                               A.  Standard of Review.
                                                     

          Expressing the standard for  judicial review of a claim

of   evidentiary  insufficiency   in   a  criminal   case  is   a

straightforward exercise.   If  the evidence presented,  taken in

the light most flattering  to the prosecution, together with  all

reasonable inferences favorable to it, permits a rational jury to

find each  essential  element  of  the  crime  charged  beyond  a

reasonable doubt, then  the evidence is legally  sufficient.  See
                                                                           

Jackson v. Virginia, 443  U.S. 307, 319 (1979); United  States v.
                                                                        

Gifford,  17  F.3d 462,  467 (1st  Cir.  1994); United  States v.
                                                                        

Castro-Lara, 970 F.2d 976, 979 (1st Cir. 1992), cert. denied, 113
                                                                      

S. Ct. 2935 (1993).   In evaluating sufficiency, both  direct and

circumstantial evidence  are accorded weight.   See, e.g., United
                                                                           

States  v. O'Brien, 14 F.3d 703, 706 (1st Cir. 1994).  So long as
                            

the  evidence,  taken  as   a  whole,  warrants  a   judgment  of

conviction, "it need not rule out other hypotheses more congenial

to a finding of innocence."  Gifford, 17 F.3d at 467.
                                              

          When, as now, a criminal defendant mounts a sufficiency

challenge, all the evidence, direct  and circumstantial, is to be

viewed from the government's  coign of vantage.  Thus,  the trial

judge  must resolve  all  evidentiary  conflicts and  credibility

questions  in the  prosecution's favor;  and, moreover,  as among

competing  inferences, two  or more  of which are  plausible, the

judge must choose the inference that  best fits the prosecution's

theory of guilt.  See  United States v. Taylor, 54 F.3d  967, 974
                                                        

                                6


(1st Cir. 1995);  United States  v. Rothrock, 806  F.2d 318,  320
                                                      

(1st Cir. 1986).

          The  granting of a motion for  judgment of acquittal is

subject to de novo review.  See United States v. Kirvan, 997 F.2d
                                                                 

963, 967 (1st  Cir. 1993).  Like the trial  court, "we scrutinize

the  evidence in  the  light most  compatible  with the  verdict,

resolve all credibility disputes in the verdict's favor, and then

reach a judgment about  whether a rational jury could  find guilt

beyond a reasonable doubt."  Taylor, 54 F.3d at 974.
                                             

                 B.  Sufficiency of the Evidence.
                           B.  Sufficiency of the Evidence.
                                                          

          In   this  instance,  our   assignment  is  simplified.

Because the defendants do  not dispute that they signed  the 1987

tax return  and that they substantially  understated their income

in  the process,  the question  of guilt  reduces to  whether the

underreporting   occurred   willfully,   that  is,   whether   it

constituted "a voluntary, intentional  violation of a known legal

duty," United States  v. Pomponio,  429 U.S. 10,  12 (1976)  (per
                                           

curiam) (citations  omitted).  The  trial focused on  this narrow

issue.  The government contended that the defendants deliberately

understated their 1987 income, while the defendants   who claimed

to have signed  the return  without reading it    contended  that

they  were guilty only of  inadvertence, aggravated by the hiring

of a maladroit accountant.

          In a  tax evasion case  in which the  defendants assert

that  blind reliance  on their  accountant, not  criminal intent,

caused an underreporting,  the critical datum is not  whether the

                                7


defendants  ordered the  accountant to  falsify the  return, but,

rather, whether the  defendants knew when they  signed the return

that it understated their income.  See Rothrock, 806 F.2d at 321.
                                                         

So here:   if the evidence  introduced at trial, taken  in a pro-
                                                                           

government light, permitted the jury to infer that the defendants
                          

(a) were aware of the contents of their return, and (b) knew that

their  reportable  income   significantly  exceeded  the   income

reflected therein,  then the  jury lawfully could  find that  the

defendants  acted willfully,  and,  hence, violated  26 U.S.C.   

7201.   See,  e.g., United  States v.  Gaines, 690 F.2d  849, 855
                                                       

(11th Cir. 1982).   We turn  to this  two-part inquiry, and  then

buttress the results with additional evidence of willfulness.

          1.   Knowledge of the Return's Contents.  This facet of
                    1.   Knowledge of the Return's Contents.
                                                           

the inquiry  need not occupy us for long.  A jury may permissibly

infer  that a taxpayer read his return and knew its contents from

the bare fact that he signed it.  See United States v. Drape, 668
                                                                      

F.2d 22,  26  (1st  Cir.  1982)  (holding  that  the  defendant's

signature  on  his  return  sufficed to  establish  knowledge  of

incorrect contents); United States v. Romanow, 505 F.2d 813,  814
                                                       

(1st Cir.  1974) (dismissing taxpayer's  denial that he  had read

tax  form,  and stating  that  "it  is clear  that  a jury  could

disbelieve  him and conclude from  nothing more than the presence

of  his uncontested  signature  that he  had  in fact  read"  the

document).

          Here,  moreover,   the   jury  had   before  it   other

circumstantial evidence  indicating that the  defendants knew the

                                8


contents of their return.   Dennett's wife, who worked  with him,

testified that when Dennett prepared  a tax return for signature,

the  return was bundled  into a  packet with  a cover  sheet that

summarized its contents.   The bottom portion of the  cover sheet

contained  the  bill  for  the  tax  preparation services.    The

defendants testified that it  was their habit to go  to Dennett's

office, sign  the completed return, and  pay the bill.   The jury

could  reasonably  infer   that,  in  order  to  have   paid  the

accountant's bill, the  defendants must have read  the portion of

the cover sheet that detailed the return's contents.

          2.    Knowledge  of   the  Understatement.    The  most
                    2.    Knowledge  of   the  Understatement.
                                                             

compelling  proof  that  the  defendants  knew  that  the  figure

reported on  their 1987  return  substantially understated  their

true  income is the product of simple arithmetic.  Tama Mitchell,

a government  witness, analyzed  the defendants' 1987  return and

found that the disposable  funds available to them in  that year,

based  on  the  information  contained in  the  return,  totalled

$24,695.   Mitchell  further testified  that the  defendants made

expenditures  of more  than $620,656  during the  year.5   In the

same period, their overall savings  increased by $334,003.  After

subtracting net  deposits of  loan proceeds, Mitchell's  analysis

demonstrated  that  the  defendants'  combined  expenditures  and

                    
                              

     5Mitchell's computations did not include all the defendants'
annual expenditures,  but established a baseline by concentrating
on  major  cash purchases  during the  year,  e.g., an  outlay of
                                                            
$158,000 in June to purchase a Rolls Royce  Corniche convertible;
an outlay  of $32,450 in August to purchase a Range Rover; and an
infusion of roughly $140,000 to a brokerage account.

                                9


accretions to  savings in  1987  exceeded the  cash available  to

them, according to their tax return, by $580,989.

          To be sure, the  evidence pertaining to the defendants'

lavish spending is circumstantial  and suggestive, not direct and

irrefutable.      Yet,   the   arithmetic   furnishes   a  sturdy

infrastructure  capable of supporting a reasonable inference that

the  defendants  must  have been  aware  that  their 1987  return

substantially underreported  their income.  See  O'Brien, 14 F.3d
                                                                  

at 706-07 (holding  that, despite an absence  of direct evidence,

circumstantial  evidence adequately supported jury's inference of

guilty knowledge  in fraud  case); Castro-Lara,  970 F.2d  at 981
                                                        

(explaining that  "circumstantial evidence, in and  of itself, is

often  enough to ground a  conviction"); United States v. Hurley,
                                                                          

957 F.2d 1, 4 (1st  Cir.) (stating that, in proving tax  evasion,

"the  government [does] not need  to show direct  evidence of tax

motivation" so long as  the jury has a  sufficient circumstantial

basis for  inferring willfulness),  cert. denied, 113  S. Ct.  60
                                                          

(1992).   Even if one were to accept the defendants' self-serving

hypothesis that the accountant's incompetence sparked the  myriad

misstatements  embedded  in  the  return, the  jury  could  still

reasonably  infer that,  when the  defendants signed  the return,

they must have  gained an  awareness that the  numbers could  not

possibly be accurate.  See Gaines, 690 F.2d at 855 (holding  that
                                           

glaring  inaccuracies  in   figures  can  support  a   reasonable

inference  of knowledge); see also Drape, 668 F.2d at 26 ("Intent
                                                  

may  be established  where a  taxpayer  `chooses to  keep himself

                                10


uninformed  as  to   the  full  extent   that  [the  return]   is

insufficient.'") (quoting Katz  v. United States, 321  F.2d 7, 10
                                                          

(1st Cir.), cert. denied, 375 U.S. 903 (1963)).
                                  

          The  proposition that the  defendants knew their return

understated their  income derives support from  other evidence as

well.    For  example,  during  1986,  Anthony  Olbres  (who  had

unrestricted access  to DC's  books and records)  provided fiscal

and marketing  information to  Dennett so that  the latter  could

prepare a  financial statement  in connection with  a prospective

sale of the  business.  When  completed, the financial  statement

projected  1987  revenues  in  the amount  of  $1,976,000.    The

projection proved  to  be  prophetic    DC's  actual  1987  gross

receipts totalled $2,014,059    but the defendants reported gross

receipts  on  the  1987  tax  return  in  a  far  smaller  amount

($1,265,069).   Based on this  progression of events,  a rational

jury  could plausibly  infer that  Anthony Olbres  had sufficient

knowledge  of  DC's  financial  matters  to  recognize  the  huge

discrepancy between projected revenues and reported revenues, and

to appreciate the significance  of the gap.6  Likewise,  the jury

                    
                              

     6The   district  court   suggested   that  Anthony   Olbres'
participation in  the preparation of the  1987 projections tended
to be  exculpatory rather  than incriminatory, because  it showed
that the defendants reposed great confidence in their accountant.
See  D.  Ct. Op.  at  31.    Though  such  an  inference  may  be
             
permissible, it is not  compelled; and, given the method  of Rule
29, it is the  jury's choice between alternative inferences,  not
the trial judge's  choice, that  must control.   See O'Brien,  14
                                                                      
F.3d  at  707 (warning  that judges  must  not "usurp  the jury's
province"  of choosing  between  alternative inferences);  United
                                                                           
States  v. Guerrero-Guerrero, 776 F.2d 1071, 1075 (1st Cir. 1985)
                                      
(similar), cert. denied, 475 U.S. 1029 (1986).
                                 

                                11


could infer from Shirley Olbres' position as DC's bookkeeper that

she,  too, must  have  recognized the  massive understatement  of

income.

          3.  Other Evidence  of Willfulness.  In this  case, the
                    3.  Other Evidence  of Willfulness.
                                                      

jury  heard other  evidence capable  of supporting  a permissible

inference that the  defendants acted willfully  in underreporting

their income.  For one thing, the defendants themselves from time

to time  bypassed their  business checking account  and deposited

substantial amounts of money (including approximately $145,000 in

payments  from  a  single  customer,   Digital  Equipment  Corp.)

directly into  their business  savings account.   They  knew that

these payments constituted income, yet they neither recorded them

in the cash receipts  journal nor reported them on their 1987 tax

return.  To  make matters  worse, the two  source materials  that

most  easily could  have identified  the unreported income    the

invoice log and the  passbook for the business savings  account  

were    withheld   from   the    defendants'   accountant;   and,

coincidentally,   the   same   source    materials   conveniently

disappeared  during  the  IRS   audit.7    While  the  defendants

maintained other  books and records  from which the  existence of

these funds could perhaps be gleaned, see D. Ct. Op. at 31, it is
                                                   

readily  evident that  a jury  plausibly could  infer  from these

facts that  the defendants  clumsily attempted to  conceal income
                    
                              

     7Joyce  Wildes, a  Dennett employee  assigned to  review the
defendants'  taxes,  testified that  she  was  not provided  with
either  the log or the  passbook, and Agent  Kaply discovered the
existence  of  the business  savings  account  only by  obtaining
information directly from IHB.

                                12


from both their tax preparer and their government.

          Of course, the defendants'  counter-argument   that the

evidence indicates  nothing more  than that they  were remarkably

slipshod  in  their  business  practices     is  also  plausible.

Withal, the option to choose between these inferences belonged to

the jury,  not the judge, see United States v. Guerrero-Guerrero,
                                                                          

776 F.2d  1071, 1075 (1st Cir. 1985), cert. denied, 475 U.S. 1029
                                                            

(1986),   and  the  jury  had  a  perfect  right  to  reject  the

defendants' counter-argument and draw  the inference urged by the

government.   See  O'Brien,  14 F.3d  at  707; United  States  v.
                                                                       

Quejada-Zurique, 708 F.2d 857, 859  (1st Cir.), cert. denied, 464
                                                                      

U.S. 855 (1983).  After all, "if the evidence can be construed in

various reasonable  alternatives, the jury is  entitled to freely

choose from among them."   United States v. Smith, 680 F.2d  255,
                                                           

259 (1st Cir. 1982), cert. denied, 459 U.S. 1110 (1983).
                                           

          The evidence  anent the defendants' income  from rental

property  also bolstered  the inference  of willfulness.   During

1987, the defendants owned various  properties and rented them to

tenants.   In 1987, Johnson Matthey Catalog  Company (J/M) rented

space from the defendants  in Seabrook, New Hampshire, at  a rate

of  $48,000 per  annum.   J/M  sent a  $4,000 rent  check to  the

defendants' home every month.  Shirley Olbres deposited each rent

check,  when  received,  into the  Seabrook  Properties  account.

Although J/M  paid the full  $48,000 during 1987,  the defendants

informed Dennett that  they had garnered  only $30,000 in  rental

income  from  all their  real estate.    Thus, their  1987 return

                                13


failed to include $18,000 from the avails of the J/M tenancy, and

also failed to  include $3,890  in rental income  referable to  a

property known as "the barn."  It is beyond serious question that

the  defendants'  action in  pegging  the J/M  lease  proceeds at

$30,000  in the summary  they gave  to their  accountant, coupled

with their failure  to list  any rental income  referable to  the
                                          

barn, could ground the requisite inference of criminal intent.

          We think,  too, that the defendants'  failure to report

sums  received   as  rebates   from  Mayflower   Transit  Company

(Mayflower) gives rise to a founded inference of willfulness.  DC

retained  Mayflower to  ferry exhibit  booths to  and from  trade

shows.    The  contract   between  the  parties  stipulated  that

Mayflower  would  furnish   transportation  services  to   DC  at

customary  tariff  rates,  but  then  remit  20% of  the  amounts

actually  paid.  The rebate would be calculated monthly, based on

payments from DC  to Mayflower.   Pursuant  to this  arrangement,

Mayflower  remitted $96,671 in 1987, but, for some reason, failed

to  issue a 1099 form memorializing the payments.  The defendants

did  not report any of this money  as income on their 1987 return

(despite the fact that  they deducted 100% of the  tariff charges

that they paid in the first instance).

          Shirley  Olbres deposited  each  of  the eleven  rebate

checks that DC received  from Mayflower during the year  into the

Seabrook  Properties  account even  though  that  account had  no

direct  connection  with  DC or  its  business.    At trial,  she

testified  that she  did not  know  that the  rebates constituted

                                14


income.  Her husband, however, admitted that he was aware of  the

rebates' taxable character.   We believe that, on this  record, a

rational jury  could infer that  the concealment  of the  rebates

resulted not from  ignorance or inadvertence but from a conscious

decision  on the defendants'  part to take  criminal advantage of

Mayflower's failure to issue the required 1099 form.

          4.    Recapitulation.   To  sum  up,  the record,  read
                    4.    Recapitulation.
                                        

favorably to the  verdict, supports the following findings:   (1)

the  defendants signed  the 1987  tax return;  (2) they  knew the

contents of the return at the time they signed it,  and they knew

that it significantly understated  their taxable income; (3) they

knew their  business had made  substantially more money  than the

return  reflected; (4) they had  received revenues during the tax

year  which they knew were taxable, such as business receipts and

transportation rebates, yet they neither deposited those revenues

in the business  checking account nor  recorded their receipt  in

the  usual manner, but,  instead, diverted the  revenues to other

bank accounts;  (5) they deliberately understated  the amounts of

rental income received when transmitting data to their accountant

preliminary to the accountant's  preparation of their tax return;

and (6) they withheld materials from the accountant  (and, later,

from  the IRS auditor) that  would have pointed  to the existence

and  extent  of  the  undeclared  income.    Notwithstanding  the

defendants' denials and  regardless of  the exculpatory  evidence

that lurked in the record, these findings enabled a rational jury

to  conclude, beyond a reasonable doubt, that the defendants were

                                15


guilty of income tax evasion for the year 1987.

                  C.  The Judgment of Acquittal.
                            C.  The Judgment of Acquittal.
                                                         

          The district  court, steadfast in its  desire to ensure

the  integrity  of the  reasonable  doubt  standard, undertook  a

painstakingly  thorough examination  of  the record.   The  court

conceded that  the government's  case was not  "unpersuasive," D.

Ct.  Op.  at  35,  that  a  jury  "could  rationally  reach"  the
                                                              

conclusion that the defendants willfully attempted to defraud the

government in respect to their 1987 taxes, id., and that,  if the
                                                        

court  were to determine the existence of willfulness by means of

a preponderance test, it  would find for the government,  see id.
                                                                           

at 37.  Nevertheless,  the court entered judgment notwithstanding

the  verdict  on  the ground  that  the  proof did  not  permit a

finding, beyond a reasonable doubt, that the defendants willfully

filed a  false tax return.   To the court's way  of thinking, the

defendants   had   articulated   a   "hypothesis   of   innocence

(negligence, incompetence, inattention,  and reasonable  reliance

on  the family's  long-time certified  public accountant)  . .  .

[that was]  sufficiently reasonable and  sufficiently strong  and

sufficiently credible that  a rational trier  of fact . .  . must

necessarily entertain  a reasonable doubt about defendants' guilt

. . . ."  Id. at 37-38.
                       

          Our independent review of  the record convinces us that

the court,  while giving lip service to the "viewpoint" principle

(which holds that the evidence must be viewed, for the purpose of

an  acquittal  motion,  in  the  light  most  flattering  to  the

                                16


government), subverted  the principle by isolating  each piece of

evidence and  determining whether that evidence,  standing alone,

gave  rise to a powerful enough inference of willfulness to allay

any  reasonable  doubt about  the  defendants'  guilt.    In  the

bargain, the  court appears  to have misunderstood  the interplay

between  the  viewpoint   principle  and  the   reasonable  doubt

standard.

          The   lower  court's  handling   of  the  rent-receipts

evidence illustrates our concerns.   In discussing this evidence,

the  court   acknowledged  that  an  inference   adverse  to  the

defendants  could rationally  be drawn,  but concluded  that this

inference was  not "of  sufficient persuasive value  to establish

[the  defendants']  knowing  intent  to  evade  taxes,  beyond  a

reasonable  doubt."    D.  Ct.  Op. at  33.    But  few,  if any,

circumstantial   evidence  cases   can  survive   this  sort   of

balkanization.  For  purposes of Rule  29, a broader  perspective

must  be employed to gauge  the prosecution's mettle.   Under the

viewpoint principle, a jury charged with determining an accused's

guilt  or innocence  is entitled  to consider  the evidence  as a

seamless whole.  Jurors are "not required to examine the evidence

in isolation, for `individual pieces of evidence, insufficient in

themselves to prove a point, may in cumulation prove it.  The sum

of an  evidentiary  presentation may  well  be greater  than  its

constituent parts.'"  United  States v. Ortiz, 966 F.2d  707, 711
                                                       

(1st Cir. 1992)  (quoting Bourjaily  v. United  States, 483  U.S.
                                                                

171, 179-80 (1987)), cert. denied, 113 S. Ct. 1005 (1993).  Here,
                                           

                                17


though no one piece of evidence laid bare the defendants' intent,

the aggregate evidence, taken  most hospitably to the prosecution

(as the viewpoint principle demands), was equal to the task.

          The  lower  court's  treatment  of  the evidence  anent

transportation rebates illustrates another  (related) shortcoming

in the court's inchmeal approach to evidentiary sufficiency:  the

court  not only  took each  piece of  evidence in  isolation, but

weighed  the several  possible  inferences  associated with  each

piece,  and   chose  between  them.     Thus,  while   the  judge

acknowledged that the jury could rationally infer criminal intent

in connection with Shirley Olbres' handling of the transportation

rebates,8  he posited  that  Mrs. Olbres,  as an  "unschooled lay

person," might  well have  misconstrued the rebates  as something

other  than income.   D.  Ct. Op.  at 34.   By umpiring  the duel

between two  competing inferences and declaring the winner on the

basis  of which inference appeared  more robust in  his eyes, the

judge invaded the jury's province.

          On a motion for judgment of acquittal   unlike, say, on

a motion for  a new trial9   it  is for the jury, not  the court,

to  choose  between  conflicting  inferences.   In  Jackson,  the
                                                                     

Supreme  Court  stated  that a  court  "faced  with  a record  of

historical   facts  that  supports  conflicting  inferences  must
                    
                              

     8The district court conceded that the evidence could sustain
an inference  that Shirley  Olbres knew  the  rebate checks  were
taxable  income,  but  attempted  to hide  them,  thereby  taking
advantage of Mayflower's  failure to report  the payments to  the
IRS on the required form.  See D. Ct. Op. at 34.
                                        

     9The defendants did not move for a new trial in this case.

                                18


presume   even if it does not affirmatively appear in the  record

  that  the trier of fact resolved any such conflicts in favor of

the prosecution, and must defer to that resolution."  443 U.S. at

326.  Under this  directive, the judge's failure to  defer to the

permissible inference of willfulness  arising out of, inter alia,
                                                                          

the defendants'  failure to report the  rebate checks constitutes

error.

          There is  still another aspect of  the district court's

methodology  that  bears  correction.     In  finding  the  proof

insufficient to  convict, the  court  cited, and  relied upon,  a

statement to the  effect "that  if a hypothesis  of innocence  is

sufficiently   reasonable  and   sufficiently   strong,  then   a

reasonable trier of fact  must necessarily entertain a reasonable
                                        

doubt."  United States v. Bell, 678 F.2d 547, 550 (5th Cir. 1982)
                                        

(en  banc)  (Anderson,  J., concurring)  (internal  citation  and

quotation marks omitted),  aff'd on other  grounds, 462 U.S.  356
                                                            

(1983).  Even  apart from a citation error,10  this stripped-down

formulation,  without more, comprises  a misleading  statement of

the  law.   Its principal  vice is  that it  is incomplete.   The

quoted  text fails  to reflect  a core  element of  the viewpoint

principle:  the necessity of drawing inferences hospitable to the

government's theory of  the case before  judging the strength  of
                                                 

any proffered hypothesis of innocence.  We explain briefly.

          In  analyzing a  motion  for judgment  of acquittal,  a

                    
                              

     10The district court incorrectly attributed this language to
the Bell majority.  See D. Ct. Op. at 20.  
                                 

                                19


court is obliged  to take, and then to  scrutinize, a snapshot of

the case   but, as  we have made clear on other  occasions,11 the

snapshot only can be taken after focusing the  lens of inquiry at

an angle  favorable  to  the prosecution.    The  district  court

neglected this focus.   It took the snapshot head-on  (as a judge

would do if  presiding over  a bench trial).   Consequently,  the

court acknowledged that inferences of willfulness could plausibly

be drawn from  much of  the evidence, but,  instead of  crediting

those inferences and then confronting the question of evidentiary

sufficiency, the court  simply placed the inculpatory  inferences

on  an  equal footing  with  various  exculpatory inferences  and

proceeded  to weigh this  mixed bag.   In other words,  the court

neither  deferred to  the jury's  presumed choice  of alternative

inferences, see  Jackson,  443 U.S.  at  326, nor  evaluated  the
                                  

potency of  the defendants' hypothesis  of innocence in  light of
                                                                           

those  presumed  choices.     This  improper  focus  emptied  the
                                  
                    
                              

     11See,  e.g., United  States v.  Flores-Rivera,     F.3d    
                                                             
(1st Cir. 1995) [No. 93-1558]:

          [I]f the  evidence viewed in  the light  most
          favorable  to  the  verdict  gives  equal  or
          nearly  equal  circumstantial  support  to  a
          theory of guilt and  a theory of innocence of
          the  crime charged,  this court  must reverse
          the conviction.   This  is so because  . .  .
          where  an equal  or  nearly  equal theory  of
          guilt and  a theory of  evidence is supported
          by  the evidence  viewed  in  the light  most
          favorable  to  the prosecution,  a reasonable
          jury must necessarily entertain  a reasonable
          doubt.

Id. at     [slip op. at 5] (quoting United States v. Sanchez, 961
                                                                      
F.2d 1169, 1173 (5th Cir.), cert. denied, 113 S. Ct. 330 (1992)).
                                                  

                                20


viewpoint principle  of its essential meaning  (causing the court

to  usurp  the jury's  function)  and  produced a  snapshot  that

distorted, rather than accurately depicted, the Rule 29 record.

III.  CONCLUSION
          III.  CONCLUSION

          We need go no further.   It is trite, but true,  that a

court "ought not disturb, on the ground of insufficient evidence,

a jury  verdict that is supported by a plausible rendition of the

record."  Ortiz, 966 F.2d at 711.  While  there may well be cases
                         

in which  the government's proof  founders in the  "realm between

preponderance and  `beyond reasonable doubt,'" D. Ct.  Op. at 22,

see also Hon. Jon O. Newman, Beyond "Reasonable Doubt", 68 N.Y.U.
                                                                

L.   Rev.  979,   986-88   (1993)  (criticizing   the   perceived

toothlessness  of appellate  application of the  reasonable doubt

standard  in review  of evidentiary  insufficiency  claims), this

case is not of that genre.  To the contrary, this case evokes our

frequently reiterated rule that:

          [I]n a criminal case, "the  evidence need not
          preclude    every    reasonable    hypothesis
          inconsistent with guilt"  in order to sustain
          a  conviction.   It is  enough that  . .  . a
          rational jury could  look objectively at  the
          proof   and   supportably   conclude   beyond
          reasonable doubt that  the defendant's  guilt
          had been established.

United States v. Ingraham,  832 F.2d 229, 239-40 (1st  Cir. 1987)
                                   

(internal citation omitted), cert.  denied, 486 U.S. 1009 (1988).
                                                    

Because  our perscrutation  of the record  convinces us  that, in

mulling the issue  of intent, the district  court both misapplied

the  appropriate legal standard and undervalued  the force of the

government's overall proof, the judgment below must be

                                21


Reversed.
          Reversed.
                  

                                22