US v. Kevin Witasick

Filing

UNPUBLISHED PER CURIAM OPINION filed. Originating case number: 4:07-cr-00030-jlk Copies to all parties and the district court/agency. [998657923].. [10-4593]

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Date Filed: 08/18/2011

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UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT

No. 10-4593

UNITED STATES OF AMERICA,
Plaintiff - Appellee,
v.
KEVIN JOHN WITASICK,
Defendant - Appellant.

Appeal from the United States District Court for the Western
District of Virginia, at Danville.
Jackson L. Kiser, Senior
District Judge. (4:07-cr-00030-jlk)

Submitted:

July 29, 2011

Decided:

August 18, 2011

Before MOTZ, GREGORY, and WYNN, Circuit Judges.

Affirmed by unpublished per curiam opinion.

Jerald C. Thompson, Tempe, Arizona, for Appellant.
Frank P.
Cihlar, Gregory Victor Davis, Tax Division, DEPARTMENT OF
JUSTICE, Washington, D.C.; Timothy J. Heaphy, United States
Attorney, Roanoke, Virginia, for Appellee.

Unpublished opinions are not binding precedent in this circuit.

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PER CURIAM:
Kevin
fifteen-month

John

Witasick

sentence

for

appeals

two

his

counts

of

conviction
tax

evasion

and
in

violation of 26 U.S.C. § 7201 (2006), two counts of tax perjury
in violation of 26 U.S.C. § 7206(1) (2006), one count of failure
to file a tax return in violation of 26 U.S.C. § 7203 (2006) and
one count of health care fraud in violation of 18 U.S.C. § 1347
(2006).

He

argues

that

insufficient

evidence

supported

his

convictions and that the trial on the tax counts was infected by
prosecutorial misconduct.

We affirm.

Briefly, the Government alleged that Witasick, who was
an

attorney

in

the

Arizona

firm

of

Witasick,

Parker,

and

Thompson before moving to Virginia in 1999, owned Stoneleigh, a
historic

property

in

Stanleytown,

Virginia.

While

Witasick

operated an office of the Arizona firm out of Stoneleigh, he
claimed, on his 1999 tax return, that 75% of the (considerable)
funds

he

spent

remodeling

and

deductable as business expenses.
of the expenses were deductable.
2001.

renovating

Stoneleigh

were

In 2000, he claimed that 100%
He filed no tax return in

The resulting tax loss alleged by the Government was over

$100,000.
At
Stoneleigh’s

the

same

time,

groundskeeper

Witasick

(and

2

falsely

Witasick’s

claimed

personal

that

trainer)

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Zeke Ca-stle 1 was the property manager of his firm’s Virginia
office, and listed Ca-stle as an employee on his firm’s group
health insurance plan.

I.

Insufficient Evidence (Tax Charges)

Witasick

first

argues

that

insufficient

evidence

supported his convictions for tax evasion, filing a false tax
return, and failure to file.

He argues that he was entitled to

rely on the advice of his accountant and his attorney; in the
alternative, he alleges that the Government adduced no evidence
of tax loss.
We review de novo challenges to the sufficiency of the
evidence supporting a jury verdict.
F.3d 433, 440 (4th Cir. 2007).
sufficiency

of

the

evidence

United States v. Kelly, 510

“A defendant challenging the

faces

a

heavy

burden.”

States v. Foster, 507 F.3d 233, 245 (4th Cir. 2007).

United
We review

a sufficiency of the evidence challenge by determining “whether,
after viewing the evidence in the light most favorable to the
prosecution, any rational trier of fact could have found the
essential

elements

United

States v.

of

the

crime

Collins,

1

beyond
412

a

reasonable
F.3d

Although the parties use the spelling
briefs, we have used the spelling Ca-stle
identified himself during the trial.

3

515,

doubt.”
519

Castle in the
gave when he

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(4th Cir. 2005)(quoting United States v. Fisher, 912 F.2d 728,
730 (4th Cir. 1990)).

We review both direct and circumstantial

evidence, and accord the government all reasonable inferences
from the facts shown to those sought to be established.
States

v.

Harvey,

532

F.3d

326,

333

United

(4th Cir. 2008).

In

reviewing for sufficiency of the evidence, we do not review the
credibility of the witnesses, and assume that the jury resolved
all contradictions in the testimony in favor of the government.
Kelly, 510 F.3d at 440.

We will uphold the jury’s verdict if

substantial evidence supports it, and will reverse only in those
rare cases of clear failure by the prosecution.

Foster, 507

F.3d at 244-45.
In order to establish a violation of 26 U.S.C. § 7201
(2006), the Government must prove that Witasick acted willfully
and “committed an affirmative act that constituted an attempted
evasion of tax payments” and, as a result, “a substantial tax
deficiency existed.”
(4th Cir. 1997).

United States v. Wilson, 118 F.3d 228, 236

Moreover, in order to obtain a conviction for

filing false tax returns and failing to file tax returns, the
Government

must

willful.

See

(4th Cir. 1996)

similarly
United
(filing

prove

States
false

that

v.
tax

Witasick’s

Aramony,

88

returns);

actions

F.3d
United

1369,

were
1382

States

v.

Ostendorff, 371 F.2d 729, 730 (4th Cir. 1967) (failing to file
tax returns).
4

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Willfulness,

in

this

Page: 5 of 12

context,

means

intentional violation of a known legal duty.”
States,

498

U.S.

192,

201

(1991)(quoting

Bishop, 412 U.S. 346, 360 (1973)).

a

“voluntary,

Cheek v. United
United

States

v.

A belief, in good faith,

that one has complied with the tax laws negates willfulness and
is therefore a defense, even if the belief is unreasonable.

See

id. at 201-02.

In other words, the Government must demonstrate

that

did

Witasick

not

have

a

subjective

belief,

however

irrational or unreasonable, that he was compliant with tax laws.
“Good

faith

reliance

on

a

qualified

accountant

has

long been a defense to willfulness in cases of tax fraud and
evasion.”

United

(9th Cir. 2002).

States
The

v.

good

Bishop,
faith

291

reliance

F.3d

1100,

defense

is

1107
not

applicable, however, where the defendant has failed to fully and
accurately disclose all relevant tax-related information to the
accountant

upon

whose

advice

the

defendant

claims

reliance.

See, e.g., Bishop, 291 F.3d at 1107; United States v. Masat, 948
F.2d

923,

930

(5th Cir. 1991).

This

is

so

because

if

a

defendant did not make full disclosure to his accountant, he
likely did not act in good faith.
see

also

United

States

v.

See Bishop, 291 F.3d at 1107;

DeClue,

899

F.2d

1465,

1472

(6th Cir. 1990) (“A taxpayer who relies on others to keep his
records and prepare his tax returns may not withhold information

5

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from those persons relative to taxable events and then escape
responsibility for the false tax returns which result.”).
We have reviewed the evidence adduced at trial, and we
conclude

that

the

Government

adduced

ample

evidence

of

Witasick’s guilt, and the jury properly concluded that he did
not rely on the advice of his accountant.

In fact, the evidence

reveals that Witasick directed his accountant to over-deduct his
business

expenses,

accountant

that

despite

only

being

business

repeatedly

expenditures

informed
were

by

the

deductable.

Thus, there is no basis in the record for Witasick’s claim that
he relied in good faith on the advice of his tax preparer.
The same is true of Witasick’s claim with regard to
his failure to file charge.

The evidence shows that Witasick

was not told by his attorney not to file a tax return until more
than a year after the return was due, at which time the offense
was complete.
Witasick argues in the alternative that the Government
did not adduce admissible evidence of a tax loss.
agree.

We do not

As discussed above, in order to prove a violation of

§ 7201, the Government must prove, among other elements, “the
existence of a tax deficiency.”

Boulware v. United States, 552

U.S. 421, 424 (2008)(quoting Sansone v. United States, 380 U.S.
343, 351 (1965); see also Wilson, 118 F.3d at 236.

To show a

tax

that

deficiency,

the

Government
6

must

prove

first

the

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taxpayer “had unreported income, and second, that the income was
taxable.”

United

(8th Cir. 1986).

States
The

v.

Abodeely,

Government

need

801
not

F.2d
prove

1020,
the

1023

precise

amount of the tax due and owing.

United States v. Citron, 783

F.2d 307, 314-15 (2d Cir. 1986).

To prove a violation of 26

U.S.C. § 7206(a), tax perjury, the Government must prove that
“(1) the

defendant

made

and

subscribed

to

a

tax

return

containing a written declaration; (2) the tax return was made
under penalties of perjury; (3) the defendant did not believe
the return to be true and correct as to every material matter;
and

(4)

the

defendant

acted

willfully.”

United

States

v.

that

the

Aramony, 88 F.3d 1369, 1382 (4th Cir. 1996).
The

gravamen

of

Witasick’s

witness,

summary

exceeded

the

scope

expert.

We need not resolve this claim, however, as multiple

summary

agent

is

Government’s

of

IRS

objection

testimony

Jacqueline
and

English,

testified

as

an

witnesses testified that the amount of space at Stoneleigh being
used for business purposes was considerably less than 75% and
100% in the tax years 1999 and 2000, respectively.

Thus, the

Government adduced sufficient evidence that tended to show that
Witasick over-deducted his business expenses, and substantially
so.

Thus, the jury could properly infer that Witasick made

material representations in his tax return that resulted in a

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tax deficiency.

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We therefore affirm his convictions for the

tax-related charges.

II.

Sufficiency of the Evidence (Health Care Fraud)
Witasick next argues that there was no evidence that

he

personally

acted

to

place

Ca-stle

on

his

firm’s

health

insurance policy, that he and the law firm were one and the
same, and that this type of case falls outside the scope of 18
U.S.C. § 1347.
To

prove

health

care

fraud,

the

Government

had

to

prove that Witasick “knowingly and willfully executed a scheme
to defraud any health care benefit program.”

United States v.

Girod,

2675925,

Nos.

10-30128,

10-30339,

2011

WL

(5th Cir. July 11, 2011); see 18 U.S.C. § 1347.
scheme

to

defraud,

“acted

with

the

the

Government

specific

intent

had
to

to

show

defraud,

at

*5

To prove a
that

Witasick

which

may

be

inferred from the totality of the circumstances and need not be
proven by direct evidence.”

United States v. Godwin, 272 F.3d

659, 666 (4th Cir. 2001) (internal quotation marks omitted).

In

particular, we look to the “common-law understanding of fraud,”
which

includes

“acts

taken

to

conceal,

impression, mislead, or otherwise deceive.”
Colton, 231 F.3d 890, 898 (4th Cir. 2000).

8

create

a

false

United States v.

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Turning to Witasick’s first claim that there was no
evidence that he directed Ca-stle’s name be placed on the health
care policy, we find the claim belied by the record.

Ample

evidence was introduced that showed that Witasick, either alone
or

in

concert

with

his

law

partners,

made

falsely list Ca-stle as a law firm employee.
Government

adduced

representations

evidence

to

that

representatives

the

decision

Furthermore, the

Witasick

from

Anthem,

made
the

false
insurer,

when questioned about Ca-stle’s employment status.
conclude

to

Thus, we

that the Government adduced substantial evidence that

Witasick engaged in fraud.
We also reject Witasick’s argument that he and his law
firm were one and the same at the time the alleged misconduct
occurred.

Anthem’s representative testified that Anthem had a

policy with “Witasick, Parker & Thompson,” the law partnership,
rather

than

with

“Witasick

&

Associates,”

the

sole

proprietorship that existed after Witasick falsely listed Castle as an employee.
employee

could

be

Thus, Witasick’s claim that his personal

considered

his

firm’s

employee

is

without

merit.
Finally, we turn to Witasick’s argument that § 1347,
the

statute

under

which

Witasick

was

prosecuted,

does

not

contemplate criminal liability for the activities alleged.

We

review questions of statutory interpretation de novo.
9

United

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States

v.

Carr,

interpreting

Date Filed: 08/18/2011

592

the

F.3d

scope

636,

of

language of the statute.

a

639

Page: 10 of 12

n.4

statute,

(4th Cir. 2010).

we

look

first

to

In
the

See North Carolina ex rel. Cooper v.

Tenn. Valley Auth., 515 F.3d 344, 351 (4th Cir. 2008).
Here,

the

language

of

the

statute

provides

that

a

person is guilty of health care fraud if he:
knowingly and willfully executes,
execute, a scheme or artifice--

or

attempts

to

(1) to defraud any health care benefit program;
or
(2) to obtain, by means of false or fraudulent
pretenses, representations, or promises, any of the
money or property owned by, or under the custody or
control of, any health care benefit program,
in connection with the delivery of or payment
health care benefits, items, or services[.]
18 U.S.C. § 1347.

for

While Witasick seeks to invoke the rule of

lenity that ambiguous criminal statutes must be construed in
favor

of

ambiguous.

the

accused,

we

conclude

that

the

statute

is

not

Witasick was convicted of knowingly making false

statements to Anthem and its representative, and with improperly
listing Ca-stle on the law firm’s group health insurance policy
-- a classic example of a scheme to defraud.

This conduct falls

squarely within the statute’s ambit, and no further inquiry into

10

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the legislative history is required. 2

Page: 11 of 12

Thus, we affirm his health

care fraud conviction.

III.

Prosecutorial Misconduct

Finally, Witasick argues that he was the victim of
prosecutorial misconduct.

He claims that the prosecutor was

required to present exculpatory evidence to the grand jury and
did

not

do

so.

To

succeed

on

a

claim

of

prosecutorial

misconduct, a defendant must show that the prosecutor’s conduct
was improper and that it “prejudicially affected his substantial
rights so as to deprive him of a fair trial.”

United States v.

Scheetz, 293 F.3d 175, 185 (4th Cir. 2002).

“In reviewing a

claim

of

prosecutorial

determine

whether

the

misconduct,
conduct

so

we

review

infected

the

the

claim

trial

to

with

unfairness as to make the resulting conviction a denial of due
process.”

Id. (internal quotation marks omitted).
Witasick’s argument that the prosecution must present

exculpatory

evidence

to

the

grand

jury

is

similar

to

that

rejected by the Supreme Court in United States v. Williams, 504
U.S.

36,

44-46

(1992).

While

2

Witasick

seeks

to

distinguish

Our conclusion is supported by the Second Circuit’s
decision in United States v. Josephberg, 562 F.3d 478 (2d Cir.
2009), a case in which the court affirmed a conviction under §
1347 for conduct virtually identical to that at issue here.

11

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Williams,

we

find

Date Filed: 08/18/2011

his

attempts

Page: 12 of 12

unpersuasive.

The

Court

was

emphatic that “[i]mposing upon the prosecutor a legal obligation
to

present

exculpatory

evidence

in

his

possession

incompatible with [the adversarial] system.”
also

find

no

support

in

Witasick’s

claim

would

Id. at 52.
that

the

be
We

Citizens

Protection Act, 28 U.S.C. § 530B(a) and the Virginia Rules of
Professional Conduct require such disclosure.
Accordingly, we affirm the judgment of the district
court.
legal
before

We dispense with oral argument because the facts and
contentions
the

court

are

adequately

and

argument

presented

would

not

in
aid

the
the

materials
decisional

process.
AFFIRMED

12