US v. Leandra Smith

Filing

UNPUBLISHED PER CURIAM OPINION filed. Originating case numbers: 3:03-cr-00219-GCM-DCK-2, 3:03-cr-00219-GCM-DCK-1. Copies to all parties and the district court/agency. [998450196] [09-4825, 09-4838, 09-4893]

US v. Leandra Smith

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UNPUBLISHED UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT No. 09-4825 UNITED STATES OF AMERICA, Plaintiff ­ Appellee, v. LEANDRA SMITH, a/k/a Leanra Smith, a/k/a Rhonda L. Barber, Defendant ­ Appellant.

No. 09-4838 UNITED STATES OF AMERICA, Plaintiff ­ Appellee, v. ANEWA TIARI-EL, a/k/a Annie B. Williams, Defendant ­ Appellant.

No. 09-4893 UNITED STATES OF AMERICA, Plaintiff ­ Appellant, v.

Dockets.Justia.com

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LEANDRA SMITH, a/k/a Leanra Smith, a/k/a Rhonda L. Barber; ANEWA TIARI-EL, a/k/a Annie B. Williams, Defendants ­ Appellees.

Appeals from the United States District Court for the Western District of North Carolina, at Charlotte. Graham C. Mullen, Senior District Judge. (3:03-cr-00219-GCM-DCK-2; 3:03-cr-00219GCM-DCK-1) Submitted: September 17, 2010 Decided: October 21, 2010

Before GREGORY, SHEDD, and DAVIS, Circuit Judges. Affirmed in part; vacated and remanded in part by unpublished per curiam opinion. James S. Weidner, Jr., JAMES S. WEIDNER, JR., Charlotte, North Carolina, for Leandra Smith; Claire J. Rauscher, Ross H. Richardson, FEDERAL DEFENDERS OF WESTERN NORTH CAROLINA, INC., Charlotte, North Carolina, for Anewa Tiari-El. Edward R. Ryan, United States Attorney, Charlotte, North Carolina; John A. DiCicco, Acting Assistant Attorney General, Alan Hechtkopf, Karen M. Quesnel, Katie Bagley, UNITED STATES DEPARTMENT OF JUSTICE, Washington, D.C., for the United States. Unpublished opinions are not binding precedent in this circuit.

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PER CURIAM: Anewa Tiari-El and Leandra Smith were convicted, after a jury trial, of conspiracy to file false claims for tax

refunds, filing false claims for tax refunds, and aiding and abetting others in violation of 18 U.S.C. §§ 286, 287, and 2 (2006). The district court sentenced Tiari-El to 60 months

imprisonment and Smith to 42 months imprisonment and ordered both Defendants to pay restitution in the amount of $244,287.86 to clients who paid them to file the false refund claims.

Tiari-El and Smith appeal, contending that the district court erred by allowing the introduction of evidence of a non-

testifying codefendant's guilty plea and by denying their motion for a new trial based on the Government's failure to turn over exculpatory evidence. The Government cross-appeals, arguing

that the district court erred by failing to order restitution to the Internal Revenue Service. convictions, but vacate We affirm Tiari-El's and Smith's sentences and remand with

the

instructions for the district court to imposed restitution in favor of the Internal Revenue Service. The Government's evidence showed that the Defendants engaged in a scheme conducted through Tiari-El and Associates ("TEA"), a law firm that provided credit counseling services, loan approval and education on home ownership. They offered to

recoup from the Internal Revenue Service interest accrued on tax 3

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payments made by individuals.

TEA falsely informed its clients The tax and

that the IRS maintains a master file on each taxpayer. payments made into this master file accrue

interest,

according to TEA, the taxpayer can obtain the interest earned on this account by filing amended returns. TEA directed their clients to provide their completed prior year tax returns, sign the cover page of a Form 1040X, and sign a limited power of attorney. TEA would then, unbeknownst

to the taxpayer, complete a Form 2439 "Notice to Shareholder of Undistributed Long-Term Capital Gains," and submit it to the IRS, along with the amended return, claiming a refund in amounts ranging from $33,000 to $89,000. The Government presented

evidence that the individuals named in the amended returns filed by TEA did not have the undistributed gains to support the

requested refund.

TEA provided that the refund checks from the TEA charged

IRS were to be sent directly to the TEA offices.

clients $150 to $305 for each tax year in which they filed an amended return claiming this fictitious refund. TEA clients

also agreed to pay TEA fifteen to twenty-five percent of the refunds they received. Tiari-El's behalf Tajah, of the the daughter, Tajah During to Yesher-El, the testified on of her

Defendants. sought

cross-examination testimony that

Government

elicit

husband, Malik Yesher-El, was charged with the same offenses as 4

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Smith and Tiari-El, and that he pled guilty.

The district court

initially prohibited this questioning, but upon request by the Government, reconsidered the ruling, and over the Defendants' objections, allowed the Government to question Tajah about the guilty plea. The Defendants assert that this ruling violated their rights under the Confrontation Clause. "[E]vidence of a non-testifying co-defendant's guilty plea should not be put before the jury." Blevins, omitted). codefendant 960 F.2d 1252, 1260 for (4th Cir. United States v. 1992) are (citations that about the his

The is

reasons not

this to be

restriction

present

cross-examined

motives for pleading guilty and the concern that the jury will consider the codefendant's Id. guilty plea as evidence of the

defendant's guilt.

Admission of such evidence is reviewed

de novo, and a mistrial must be declared unless the court is satisfied beyond a reasonable doubt that the error was harmless. Id. at 1262. "If for whatever reason the jury does learn that codefendants have pled guilty, the court upon request should issue a limiting instruction to jurors." (emphasis added). Blevins, 960 F.2d at 1260

However, the Defendants did not request a

limiting instruction and failed to object to the absence of one in the jury charge. The district court was not required, sua

sponte, to give a limiting instruction. 5

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Moreover,

our

review

of

the

record

leads

to

the

conclusion that the admission of this evidence was harmless when "measured against the other evidence presented at trial." Id.

at 1263 (citing Arizona v. Fulminante, 499 U.S. 279 (1991)). The Defendants asserted that they merely gathered the relevant taxpayer Georgia, information who added and the sent Forms it 2439 to Jo El Bey in the Atlanta, amended

and

prepared

returns and submitted them to the IRS. did not know and the did actual not basis know upon that

They asserted that they which the the refunds claims were were

requested fraudulent.

refund

However, contrary to this stance, the Government

presented testimony that Smith and Tiari-El personally informed clients of the ability to receive from the IRS the interest accumulated in their "master file" with the IRS. Several

witnesses testified that the signatures on the filed amended tax returns, the Forms 2439, and the powers of attorney were forged. The clients were not aware of the actual basis for the refunds as stated in the amended returns. Additionally, upon executing

a search warrant of TEA's offices, officials discovered hundreds of partially completed Forms 2439 and numerous computer files containing Forms 2439 which were completed and able to be

attached to the refund claims. Additionally, in March 2003, the Defendants were

specifically told by an IRS criminal investigator that the tax 6

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refund

scheme

was

fraudulent.

Two

separate

state

court

injunctions were imposed prohibiting Defendants from continuing to prepare amended tax returns on behalf of clients because of the fraudulent nature of the claims, and more than 400 letters were received by TEA clients rejecting the refund claims as

false.

Despite these events, Tiari-El and Smith continued to

file false claims for tax refunds on the same basis. When faced with this overwhelming evidence of Smith and Tiari-El's knowledge of the fraudulent nature of the refund requests and their continued conduct of the scheme after being informed that the claims were false, we conclude that the

isolated reference to Malik Yesher-El's guilty plea during the five-day jury trial was harmless beyond a reasonable doubt. Blevins, 960 F.2d at 1262. Next, the Defendants contend that the Government See

failed to disclose exculpatory evidence in violation of Brady v. Maryland, 373 U.S. 83 (1963). They contend that, at the time of

their trial, the Government was preparing to arrest Jo El Bey in Georgia after a three-year investigation into his conducting the same type of tax refund scheme as that with which the Defendants were charged. They assert that the Government failed to

disclose this information, and in fact, claimed that Jo El Bey did not exist and "crippl[ed] Appellants' defense."

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The

Government

points

out

that

the

person

who

was

being investigated in Georgia was Joseph Jordan.

Although the

Defendants assert that Jordan and Jo El Bey are the same person, there was no of evidence the of this. Notably, several during the

investigation

Defendants,

cancelled

checks

written to Joseph Jordan were discovered, but none made payable to Jo El Bey. Additionally, conducted by the United the investigation Attorney's of Office Jordan for was Middle

States

District of Georgia, whereas the Defendants were prosecuted in the Western District of North Carolina. that prosecutors in in one district of be There is no requirement aware of and disclose offices.

information

the

possession

other

governmental

See United States v. Pellullo, 399 F.3d 197, 216 (3d Cir. 2005); Kyles v. Whitley, 514 U.S. 419, 438 (1995); see also United States v. Mero, 866 F.2d 1304, 1309 (11th Cir. 1989) (holding that prosecutor in Florida not in possession of and therefore not obligated to disclose information known to prosecutors in Georgia and Pennsylvania). case is not Because imputed the with prosecutor knowledge in of the the

Defendants'

investigation in Georgia, no Brady violation can be shown by the Government not disclosing to the Defendants details of the

investigation of Joseph Jordan.

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The final issue in these appeals is the Government's contention that the district court's failure to order

restitution in favor of the Internal Revenue Service was error. Although it is clear from our review of the record that the district court intended that restitution be made to the IRS in the amount of $1,394,474.67 -- the amount paid on the false

claims submitted by clients of TEA -- the court failed to order restitution in the Judgment and Commitment Orders. Rather, the

court ordered restitution in the amount of $244,287.86 for the individual victims who were clients of Tiari-El and Smith.

Based on its concern over the IRS recouping the money paid to taxpayers under this fraudulent scheme, the court decided to wait for an accounting of monies recovered before imposing the restitution failure to award. award While this is a the legitimate IRS, the a concern, of the the

restitution scheme,

to

victim

Defendants'

fraudulent

violates

Mandatory

Victims

Restitution Act of 1996.

18 U.S.C.A. § 3663A(a)(1) (West 2000 &

Supp. 2010); United States v. Roper, 462 F.3d 336, 338 (4th Cir. 2006); see also United States v. Ekanem, 383 F.3d 40, 42-44 (2d Cir. 2004) (holding that government may be an eligible victim). Further, the Act provides, "In no case shall the fact that a victim has received or is entitled to receive

compensation with respect to a loss from insurance or any other source be considered in determining the amount of restitution." 9

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18 U.S.C. § 3664(f)(1)(B) (2006) (emphasis added).

Rather, the

Act provides that "[a]ny amount paid to a victim under an order of restitution shall be reduced by any amount later recovered as compensatory damages for the same loss by the victim" in any Federal or State civil proceeding." (2006). See 18 U.S.C. § 3664(j)(2)

Thus, despite the fact that the IRS may recoup some of

its losses from the taxpayers who received refunds under TEA's scheme, the district court erred by failing to order restitution to the IRS in the full amount of its losses, with the amount to later be reduced by amounts recouped from taxpayers. See United

States v. Ruff, 420 F.3d 772, 775 (8th Cir. 2005) (discussing mandatory nature of restitution award and the bar against double recovery); United States v. Scott, 270 F.3d 30, 52 (1st Cir. 2001) (interpreting restitution order entered in fraudulent tax return case as allowing government to recover the total amount of restitution from any of several individual defendants, but restricting total recovery to amount of loss). Accordingly, convictions, we vacate while the we affirm Tiari-El's in part and and Smith's the

judgments

remand

cases to the district court for the limited purpose of ordering restitution in favor of the IRS. We dispense with oral argument

because the facts and legal contentions are adequately presented

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in the materials before the court and argument would not aid the decisional process. AFFIRMED IN PART; VACATED AND REMANDED IN PART

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