USA v. Joseph Sweet

Filing

Opinion issued by court as to Appellant Joseph Nelson Sweet. Decision: Affirmed. Opinion type: Non-Published. Opinion method: Per Curiam. 10-12885X.

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[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
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No. 10-12885
Non-Argument Calendar
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FILED
U.S. COURT OF APPEALS
ELEVENTH CIRCUIT
OCTOBER 26, 2011
JOHN LEY
CLERK

D.C. Docket No. 8:08-cr-00381-SCB-EAJ-2

UNITED STATES OF AMERICA,
Plaintiff-Appellee,
versus
JACK LEE MALONE,
Defendant-Appellant.
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No. 10-15069
Non-Argument Calendar
________________________
D.C. Docket No. 8:08-cr-00381-SCB-EAJ-1

UNITED STATES OF AMERICA,

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Plaintiff-Appellee,
versus
JOSEPH NELSON SWEET,
Defendant-Appellant.
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Appeals from the United States District Court
for the Middle District of Florida
________________________
(October 26, 2011)
Before HULL, WILSON and BLACK, Circuit Judges.
PER CURIAM:
Defendants Joseph Sweet and James Malone were involved in a scheme to
sell tax-avoidance manuals and trust documents to individuals who wanted to hide
their income from the Internal Revenue Service (“IRS”). After a jury trial,
Defendants Sweet and Malone were convicted of conspiracy to defraud the United
States by advocating the intentional disruption of the assessment, ascertainment
and collection of federal income tax, in violation of 18 U.S.C. § 371. Defendant
Sweet was also convicted of corrupt interference with internal revenue laws, in
violation of 26 U.S.C. § 7212(a), and two counts of criminal contempt, in violation
of 18 U.S.C. § 401(3).
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In this consolidated appeal, Defendant Sweet appeals his convictions and
total 120-month sentence, and Defendant Malone appeals his 60-month sentence.
After review, we affirm.
I. REASONABLE DOUBT JURY INSTRUCTION
As to his convictions, Defendant Sweet contends that the district court erred
when it gave the Eleventh Circuit Pattern Jury Instruction defining reasonable
doubt.1 Specifically, Sweet argues that the following language is unnecessarily
confusing and lowered the government’s burden of proof: “Proof beyond a
reasonable doubt is proof of such a convincing character that you would be willing
to rely and act upon it without hesitation in the most important of your own
affairs.”
This Court has repeatedly upheld the reasonable doubt instruction Sweet
challenges. See, e.g., United States v. James, 642 F.3d 1333, 1337-38 (11th Cir.
2011), cert. denied, 2011 WL 4049497 (U.S. Oct. 11, 2011) (No. 11-6276) (“[W]e
have repeatedly approved of the definition of reasonable doubt provided in the
Eleventh Circuit Pattern Jury Instructions.”); United States v. Hansen, 262 F.3d
1217, 1249-50 (11th Cir. 2001); United States v. Daniels, 986 F.2d 451, 457-58,

1

We review jury instructions de novo to determine whether they misstate the law or
mislead the jury to the prejudice of the objecting party. United States v. Hansen, 262 F.3d 1217,
1248 (11th Cir. 2001).
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readopted in relevant part on reh’g, 5 F.3d 495, 496 (11th Cir. 1993). Although
Sweet cites opinions in other circuits questioning the utility of similar reasonable
doubt instructions, he does not explain how the Eleventh Circuit’s Pattern Jury
Instruction misstated the law or misled the jury in his case. As Sweet
acknowledges, we are bound by our precedent upholding the Eleventh Circuit’s
Pattern Jury Instruction on reasonable doubt “unless and until it is overruled by
this court en banc or by the Supreme Court.” United States v. Brown, 342 F.3d
1245, 1246 (11th Cir. 2003). Therefore, Sweet has not shown error in the district
court’s reasonable doubt jury instruction.
II. LOSS CALCULATION
Defendant Malone argues that the district court improperly calculated the
tax loss attributed to him for purposes of determining his base offense level under
the Sentencing Guidelines.2
When tax evasion results in a tax loss to the government, a defendant’s base
offense level is determined using the tax table in U.S.S.G. § 2T4.1. See U.S.S.G.
§ 2T1.1(a)(1). Tax loss is defined as “the total amount of loss that was the object
of the offense.” U.S.S.G. § 2T1.1(c)(1). In calculating the tax loss, “all conduct

2

We review a district court’s calculation of the amount of tax loss for clear error. United
States v. Patti, 337 F.3d 1317, 1323 (11th Cir. 2003).
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violating the tax laws should be considered as part of the same course of conduct
or common scheme or plan unless the evidence demonstrates that the conduct is
clearly unrelated.” U.S.S.G. § 2T1.1, cmt. n.2.
At sentencing, over Defendant Malone’s objection, the district court
calculated a tax loss of $2,882,200, which resulted in a base offense level of 24,
pursuant to the tax table. See U.S.S.G. § 2T4.1(J) (designating a base offense
level of 24 for a tax loss of more than $2.5 million but less than $7 million). The
district court’s loss calculation included the government’s losses from fourteen
clients of the JoY Foundation, the multi-level marketing tax scheme created by
Defendants Malone and Sweet.
The district court’s finding that the tax losses from JoY Foundation clients
were attributable to Defendant Malone is not clearly erroneous. Malone does not
dispute that he sold the JoY Foundation’s tax program to the fourteen JoY
Foundation clients or the tax loss amount assigned to each client. The JoY
Foundation provided clients with program materials, such as books and form
letters, that instructed clients not to file federal income tax returns under the theory
that wages earned were not subject to taxation. In addition, the JoY Foundation
sold clients trust documents developed by Sweet to purportedly shelter clients’
assets from taxation and advised clients on how to respond to IRS inquiries and
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levies.
Defendant Malone was found guilty of a conspiracy that used the marketing
of sham trusts to help individuals conceal income and assets and prevent the
assessment, ascertainment and collection of taxes. Although some of the JoY
Foundation’s clients already had ceased paying taxes before becoming clients, the
district court found that Malone encouraged these clients to continue their tax
evasion. Thus, part of the object of the conspiracy was the continued tax evasion
by the JoY Foundation clients, and the clients’ continued failure to pay their taxes
was part of “the same course of conduct or common scheme or plan.” See
U.S.S.G. § 2T1.1, cmt. n.2. Accordingly, the district court properly attributed
these clients’ tax losses to Malone.
III. OBSTRUCTION OF JUSTICE ENHANCEMENTS
Both defendants challenge the district court’s imposition of a 2-level
obstruction of justice enhancement.3
A defendant’s offense level is increased by 2 levels if he “willfully
obstructed or impeded, or attempted to obstruct or impede, the administration of
3

With respect to an obstruction of justice enhancement, we review a district court’s
factual findings for clear error and its application of those facts to the guidelines de novo. United
States v. Bradberry, 466 F.3d 1249, 1253 (11th Cir. 2006). For factual findings to be clearly
erroneous, we “must be left with a definite and firm conviction that a mistake has been
committed.” United States v. Rodriguez-Lopez, 363 F.3d 1134, 1137 (11th Cir. 2004) (quotation
mark omitted).
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justice with respect to the investigation, prosecution, or sentencing of the instant
offense of conviction” and “the obstructive conduct related to” the defendant’s
offense of conviction, his relevant conduct or a closely related offense. U.S.S.G.
§ 3C1.1. A defendant obstructs justice by “committing, suborning, or attempting
to suborn perjury, including during the course of a civil proceeding if such perjury
pertains to conduct that forms the basis of the offense of conviction.” U.S.S.G.
§ 3C1.1, cmt. n.4(B). Perjury occurs when a defendant offers “false testimony
concerning a material matter with the willful intent to provide false testimony,
rather than as a result of confusion, mistake, or faulty memory.” United States v.
Dunnigan, 507 U.S. 87, 94, 113 S. Ct. 1111, 1116 (1993).
A defendant also obstructs justice by “providing materially false
information to a judge or magistrate.” U.S.S.G. § 3C1.1, cmt. n.4(F). A statement
is “material” where it, “if believed, would tend to influence or affect the issue
under determination.” U.S.S.G. § 3C1.1, cmt. n.6. A defendant’s material false
statement, when made to a judge or magistrate, does not have to interfere with the
investigation or prosecution for the obstruction of justice enhancement to apply.
United States v. Ruff, 79 F.3d 123, 125-26 (11th Cir. 1996).
Here, the district court did not err in imposing the 2-level obstruction of
justice enhancement as to either defendant, albeit on different grounds. With
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regard to Defendant Sweet, the record indicates that he provided false information
to a district court in a civil lawsuit filed against him by the Tax Division of the
Department of Justice. On January 30, 2002, the district court granted a default
judgment and permanent injunction against Sweet and ordered Sweet to provide
copies of the order to all individuals and entities who had purchased Sweet’s taxavoidance manuals and trust documents and to produce records identifying those
individuals and entities. In response, on March 20, 2002, Sweet filed a document
entitled “Compliance with Court Order” in which he denied possessing the names
and addresses of anyone who had purchased his manual or trust documents or any
records related to those sales.
Defendant Sweet does not dispute that his statements in his filing were
false. Indeed, at trial, an IRS agent testified that during a search of Sweet’s home,
agents found numerous boxes containing, among other things, documents relating
to Sweet’s promotion of the tax-avoidance program and his selling of trust
documents, including client lists and order forms.
The IRS’s criminal investigation of Sweet began in early 2001. Sweet
ultimately was charged with a fraud conspiracy in which his sale of his manual
and trust documents to clients to aid their evasion of internal revenue laws was an
integral element of the scheme. Under the circumstances, the existence of records
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demonstrating that such sales had taken place was material to both the district
court’s efforts to enforce its civil injunction and the IRS’s ongoing criminal
investigation of Sweet for tax fraud. See United States v. Dedeker, 961 F.2d 164,
167 (11th Cir. 1992) (“Under the commentary to section 3C1.1, the threshold for
materiality is conspicuously low.”). Moreover, Defendant Sweet’s materially
false statements to the district court in the government’s civil tax proceedings
related to Sweet’s offenses of conviction given that it was reasonably foreseeable
that further government investigation might result in criminal charges for a tax
fraud conspiracy. See United States v. Amedeo, 370 F.3d 1305, 1320 (11th Cir.
2004) (concluding that defendant’s obstructive conduct during police investigation
of a drug overdose was “related directly and foreseeably” to defendant’s
subsequent conviction for cocaine distribution). Accordingly, Sweet’s conduct
falls within § 3C1.1’s obstruction of justice enhancement.
As for Defendant Malone, the record shows that he testified at his criminal
trial that he did not know about the civil injunction issued against Sweet or recall
receiving correspondence from the IRS informing him that he was covered by the
injunction. Although Malone admitted he had signed a response form to the IRS’s
letter, he said he did not remember doing so. At sentencing, the district court
found that Malone “conveniently didn’t remember a number of things,” about the
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correspondence with the IRS and the Sweet injunction, that Malone was not
honest about what he had received from the government and that his purported
failure to remember was an attempt to sway the jury and obstruct justice.
The district court’s finding that Defendant Malone perjured himself was not
clearly erroneous. Malone contends his testimony about receiving the IRS’s letter
was the result of a faulty memory and not willful. However, the district court
found that Malone feigned his faulty memory, a credibility determination to which
we owe considerable deference. See Amedeo, 370 F.3d at 1318 (explaining that
we accord “special deference” to a district court’s determination that a defendant
obstructed justice if it involves a credibility assessment). Moreover, Malone’s
perjury was material given that the district court found it represented an attempt to
sway the jury as to his guilt for the offense of conviction.
For these reasons, the district court did not err in imposing the 2-level
obstruction of justice enhancement when calculating the advisory guidelines
ranges for Defendants Sweet and Malone.
AFFIRMED.

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