USA v. Lanas Troxler

Filing

Case: 09-10871

Document: 00511201152

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Date Filed: 08/11/2010

IN THE UNITED STATES COURT OF APPEALS United States Court of Appeals FOR THE FIFTH CIRCUIT Fifth Circuit FILED
August 11, 2010 N o . 09-10871 Lyle W. Cayce Clerk

U N IT E D STATES OF AMERICA, P la in t iff - Appellee v. L A N A S EVANS TROXLER, D e fe n d a n t - Appellant

A p p e a l from the United States District Court fo r the Northern District of Texas U S D C No. 3:05-CR-263-1

B e fo r e DENNIS, OWEN, and SOUTHWICK, Circuit Judges. P E R CURIAM:* L a n a s Troxler was convicted of numerous tax law violations stemming fr o m his involvement in a complex scheme involving Caribbean business entities. On appeal, he claims the district court erred in several of its evidentiary rulings. W e find no reversible error and AFFIRM. BACKGROUND L a n a s Troxler worked as a financial advisor and provided financial s e r v ic e s to several companies. In addition, he marketed a program to investors
*

Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not be published and is not precedent except under the limited circumstances set forth in 5TH CIR. R. 47.5.4.

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No. 09-10871 t h a t reduced or eliminated their taxes by diverting assets from the investors' d o m e s t i c corporations into business entities set up in the Turks and Caicos I s l a n d s in the Caribbean. Troxler operated his own domestic company using t h e s e offshore business entities as well. The IRS began investigating Troxler after discovering he had a large h o m e , several vehicles, and a luxury RV despite claiming little or no income or t a x liabilities. s e r v ic e s . Two undercover agents, posing as clients, sought Troxler's

They later would testify at length about Troxler's tax avoidance

o p e r a t io n s . On October 12, 2005, a grand jury indicted Troxler on one count of c o r r u p tly endeavoring to obstruct and impede the due administration of the I n t e r n a l Revenue laws, four counts of attempting to evade and defeat tax, and t w e lv e counts of assisting in the preparation and presentation of a false and fr a u d u le n t tax return. At trial, Troxler proceeded pro se with the assistance of s t a n d b y counsel. The jury convicted Troxler on all seventeen counts. N o w represented by counsel, Troxler alleges four points of error: (1) his r ig h t to confront witnesses was violated when he was prohibited from asking two g o v e r n m e n t witnesses if they felt intimidated by the IRS; (2) his right to c o n fr o n ta t io n was violated when the government did not call a records custodian w h e n offering into evidence IRS certifications of lack of records; (3) a mistrial s h o u ld have been granted or testimony stricken due to the government's midt r ia l disclosure of a non-prosecution agreement with a witness; and (4) several c h a r ts summarizing evidence were improperly admitted. D IS C U S S IO N A ll four of Troxler's issues on appeal allege error in the admission or e x c lu s io n of evidence. A trial court's evidentiary rulings, which may need to be m a d e frequently and even on a rapid-fire basis, are reviewed deferentially. A

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No. 09-10871 d e c is io n to admit evidence will not lead to a reversal of judgment unless the r u lin g was an abuse of discretion and led to a violation of the party's substantial r ig h t s . United States v. Powell, 124 F.3d 655, 660 (5th Cir. 1997). We now apply that standard to each allegation of error. A. Q u e s tio n in g a Witness Regarding Feelings of Intimidation by IRS

R o b e r t Webb and Curtis Burgess were two of Troxler's clients who set up b u s in e s s entities based in Turks and Caicos. Both testified for the government a t trial. During each cross-examination, Troxler asked the witness whether the I n t e r n a l Revenue Services intimidated him. p r o c e e d e d as to Webb: T R O X L E R : Okay. . . . And let me see. I had some other questions. These other questions will be kind of a yes or no. And you don't n e e d to elaborate. And I'll just go quickly -- quickly here, because o f time. Are you intimidated by the Internal Revenue Service? G O V E R N M E N T : Objection, relevancy. C O U R T : Sustained. T R O X L E R : Have you been offered any deals for immunity from p r o s e c u t io n by the IRS in exchange for your testimony today? W E B B : No. B u r g e s s was asked the same question: T R O X L E R : . . . . Let me ask you a few more questions. And these q u e s t io n s require maybe a yes or no, real quickly. And just for the r e c o r d , I want this to be on the record. Are you intimidated by the I n t e r n a l Revenue Service? G O V E R N M E N T : Object, Your Honor. I object to that question. C O U R T : Sustained. This is how the questioning

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No. 09-10871 T R O X L E R : Have you been offered any deals or immunity from p r o s e c u t io n by the IRS in exchange for your testimony today? B U R G E S S : No. T h e sustaining of an objection to the intimidation question is the first is s u e on appeal, but giving such primacy to the question seems odd in light of the t r ia l transcript. Troxler wanted quick, one-word answers to a series of

q u e s t io n s . The government objected that the first question was not relevant. The district court sustained the objection, either agreeing it was not relevant or d e c i d i n g on some other basis that it was improper. On appeal, Troxler argues t h e relevance was obvious and central to all cross-examination -- the potential b ia s e s and pressures that can affect the truthfulness of a witness's answers. T r o x le r is making too much out of too little. Error may not be predicated o n a district court's ruling to exclude evidence "unless a substantial right of the p a r ty is affected, and . . . the substance of the evidence was made known to the c o u r t by offer or was apparent from the context within which questions were a s k e d ." Fed. R. Evid. 103(a)(2). In general, "excluded evidence is sufficiently p r e s e r v e d for review when the trial court has been informed as to what counsel i n t e n d s to show by the evidence and why it should be admitted . . . ." United S ta te s v. Ballis, 28 F.3d 1399, 1406 (5th Cir. 1994). However, if the district court w a s not so informed, then we will not review a challenge to the excluded e v id e n c e . United States v. Akpan, 407 F.3d 360, 374 (5th Cir. 2005). O n appeal, the government does not argue that Troxler failed to present t o the district court an adequate understanding of the purpose of the question. Instead, it relies on the fact that Troxler was able to ask other questions that p u r s u e d issues of bias, and that Troxler was not foreclosed from pursuing this lin e of questioning further despite the sustaining of this single objection. We

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No. 09-10871 c o n c lu d e that the more fundamental problem is that the question did not clearly in fo r m the district court of its purpose. When we consider whether a district c o u r t's evidentiary ruling is correct, we are not limited by the reasoning of the d is t r ic t court itself or by the appellate arguments of the party defending the r u lin g . Instead, we can affirm based on any valid reason supporting the ruling. United States v. Dunigan, 555 F.3d 501, 508 n.12 (5th Cir. 2009). T r o x le r argues that the district court was informed of the purpose of the q u e s t i o n by the question itself and by its context. He alleges that by asking W e b b and Burgess if they felt intimidated by the IRS, he intended to expose t h e ir potential bias. Such clarity in fact did not exist. None of the questions p r e c e d in g the excluded question involved potential witness bias. Prior to asking t h e question, Troxler specifically requested a quick yes or no answer, and he told W e b b not to elaborate in his answer. Once the district court sustained an objection based on relevance, Troxler c o u ld have explained the purpose of the question, if in fact the grounds argued n o w were the purpose. In the trial itself, without any elaboration on the purpose fr o m Troxler, this question could reasonably have appeared to be some broad in q u ir y into the witness's feelings about the IRS. General intimidation by the I R S , or by the federal income tax system, or by the government generally, was n o t relevant. We recognize that Troxler proceeded pro se at trial. Still, whoever is " r e p r e s e n t in g " a party at trial is subject to the evidentiary rules. Because the d is t r ic t court was not informed as to what Troxler sought to prove by the q u e s t io n in g , the alleged error was not preserved for our review. Akpan, 407 F.3d a t 374 (citing Fed. R. Evid. 103(a)). B. S e c o n d Confrontation Clause Claim

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No. 09-10871 D u r in g trial, the government admitted certificates of non-existence of r e c o r d s without providing the testimony of a records analyst. These certificates r e fle c t e d the absence of any tax returns for the Caribbean business entities c r e a t e d as part of Troxler's scheme. Prior to their admission, Troxler was shown t h e certificates. When asked by the district court, Troxler responded that he had n o objection to their admission. A t the time of trial, the law of this Circuit was that certificates of none x is t e n c e of records were not testimonial and did not require accompanying t e s t im o n y from a records analyst. United States v. Rueda-Rivera, 396 F.3d 678, 6 8 0 (5th Cir. 2005). Subsequently, the Supreme Court held that records such as c e r t ific a t e s of non-existence of records are testimonial. M a s s a c h u s e tts , 129 S. Ct. 2527, 2539 (2009). c e r tific a te s . T r o x le r claims that the admission of these certificates at trial violated his S ix t h Amendment right to confrontation. The government argues that Troxler w a iv e d this issue since he specifically stated that he had no objections to their a d m is s io n at trial. The government is incorrect. Waiver occurs when a party in t e n t io n a lly abandons a right that is known. United States v. Arviso-Mata, 442 F .3 d 382, 384 (5th Cir. 2006). This right was unknown, as the Supreme Court h a d not yet reversed our prior interpretation by the time of trial. Because there w a s no objection, though, plain error review applies. Id. W e previously considered a similarly timed appeal, in which certificates r e fle c t in g the absence of records were introduced at a trial, then the appeal was c o n s id e r e d after the Melendez-Diaz decision was released. United States v. M a r tin e z -R io s , 595 F.3d 581 (5th Cir. 2010). We held that plain error review a p p lie d to this forfeited but not waived error. Id. at 584. Troxler, then, must Melendez-Diaz v.

It was error to admit the

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No. 09-10871 d e m o n s t r a t e that the admission of the certificates was an error, that it was p la in , and that the error affected his substantial rights. Id. Even if he is able t o demonstrate all this, the court should reverse only if failing to do so would " s e r io u s ly affect the fairness, integrity or public reputation of judicial p r o c e e d in g s ." Id. (quoting United States v. Olano, 507 U.S. 725, 732 (1993) (a lt e r a t io n omitted)). Troxler argues that the plainly erroneous admission of these certificates a ffe c t e d the outcome of the trial, because the exclusion of these certificates may h a v e contributed to reasonable doubt concerning his intent. He argues that the C a r ib b e a n business entities's failure to pay taxes was critical to the g o v e r n m e n t 's theory that he willfully evaded paying taxes rather than merely m is u n d e r s t o o d tax law. Had the certificates been excluded, Troxler argues the g o v e r n m e n t 's theory that he intentionally evaded paying taxes would be w eakened. T h e r e was no prejudice. The fact that the Caribbean business entities did n o t pay U.S. taxes was well-established by testimony of the government's w it n e s s e s . The certificates were merely cumulative evidence. Because Troxler has not established that the error of admitting the c e r t ific a t e s affected any substantial rights, we will not reverse. C. D e n ia l of Motion to Strike and Motion for a Mistrial She was an

T h e next challenged evidence concerns Stacy Faulk.

a c c o u n t a n t who prepared tax returns for Troxler and his clients. Faulk testified fo r the government at trial. Immediately prior to Troxler's cross-examination of Faulk, while the jury w a s out of the courtroom, Faulk revealed to the district court that her previous a t t o r n e y had received a letter apparently from the government stating that she w a s not a target of the investigation and that she would not be prosecuted. This 7

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No. 09-10871 letter's existence was apparently a surprise to both Troxler and the government's c o u n s e l. Clarity to who sent the letter and exactly what it said was never given. Faulk told the court that she had not felt comfortable talking with investigators u n t il she had received this letter. The district court concluded that the government's failure to turn over the le t t e r was a Brady violation, and that the letter should have been disclosed to T r o x le r earlier. Faulk explained that she still had the letter, but that she did n o t have it in court with her that day. Troxler did not request a continuance so t h a t the letter could be retrieved. He did, however, move to strike Faulk's direct e x a m in a t io n in its entirety, or in the alternative, move for a mistrial. The d is t r ic t court denied both motions, but explained that Troxler could question F a u lk about the letter. He did so. T h e following are the relevant portions of the cross-examination: T R O X L E R : Stacey, one last point here. Can you testify that you n e v e r got a letter from the government in reference to your offer of t e s t im o n y today, that you would not be prosecuted? F A U L K : Can I testify that I never got one? T R O X L E R : Can you testify that you never got a letter that you w o u ld not be prosecuted if -- if you testified today? F A U L K : I never got that letter. I got a letter saying I was not a ta rg et. T R O X L E R : But you never got a letter saying you would not be p rosecu ted ? F A U L K : No. They just told me that I would not be prosecuted. T R O X L E R : Is that one reason you have been cautious with your t e s t im o n y , until you received that and you felt like after that you w e r e free? 8

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No. 09-10871 [O b je c tio n overruled. Faulk asks Troxler to repeat the question] T R O X L E R : Well, up until the time you got the letter, you hadn't r e a lly spoken with anybody from the government very much about t h e details? F A U L K : Right. Because I got an attorney, and he told me not to ta lk . T R O X L E R : Okay. And after you got . . . some kind of a letter, even t h o u g h it didn't say you wouldn't be prosecuted, is that . . . what g a v e you an ability to want to come and tell your story today w it h o u t fear? F A U L K : I didn't want to come. T R O X L E R : Okay . . . did you even have any have any fear that I c o u ld prosecute you? [G o v e r n m e n t's objection is sustained] T R O X L E R : Or that somebody could prosecute you for -- or were y o u figuring that you were covered because of the deal that the g o v e r n m e n t wanted to make for your testimony. F A U L K : I didn't think I was going to be prosecuted, no. T R O X L E R : So -- because you had the assurance and you felt you w e r e not going to be prosecuted, you were willing to answer those q u e s t io n s , or any questions? F A U L K : Somewhat. T R O X L E R : Do you feel like you had a certain amount of protection a n d you might have been obligated to answer a certain way because t h e y promised not to prosecute you? F A U L K : No. T R O X L E R : Or intended --9

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No. 09-10871 F A U L K : No. My intent was to just tell the truth. T R O X L E R : Okay. So you've told the truth? F A U L K : Yes. O n appeal, Troxler contends the district court erred in denying his motion fo r a mistrial and his motion to strike Faulk's testimony. We review each for a b u s e of discretion. See United States v. Williams, 132 F.3d 1055, 1060 (5th Cir. 1 9 9 8 ); United States v. Jennings, 724 F.2d 436, 445 (5th Cir. 1984). W e recently discussed the effect of a later disclosure of Brady material: T h e Supreme Court has never expressly held that evidence t h a t is turned over to the defense during trial has been "suppressed" w it h in the meaning of Brady. Our court has held that such evidence is not considered to have been suppressed. In this Circuit, when the c la im is untimely disclosure of Brady material, we have looked to w h e t h e r the defendant was prejudiced by the tardy disclosure. We h a v e held that a defendant is not prejudiced if the evidence is r e c e iv e d in time for its effective use at trial. These principles that w e have applied to claims of untimely disclosure of Brady material . . . are consistent with the purpose of the Brady disclosure r e q u ir e m e n t , which is to ensure that the defendant receives a fair t r ia l. P o w e ll v. Quarterman, 536 F.3d 325, 335-36 (5th Cir. 2008) (internal citations, q u o t a t io n marks, and footnote omitted). From this we conclude that the pivotal is s u e is whether Troxler learned of the letter in time to use it effectively at trial. Troxler was able to make the jury aware that Faulk had been unwilling t o talk with investigators before receiving the letter. She cooperated only after r e c e iv in g a letter saying she was not going to be a target of the investigation. Nothing has been presented to us suggesting that the late disclosure of the F a u lk letter prevented Troxler from receiving a fair trial. T h e district court did not abuse its discretion by denying Troxler's motion t o strike and motion for a mistrial. 10

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No. 09-10871 D. A d m is s io n of Exhibits 67A through E

F in a lly , Troxler challenges the district court's decision to allow the g o v e r n m e n t to admit summary evidence in the form of several charts. A specific e v id e n t ia r y rule provides an opening for the challenged exhibits: T h e contents of voluminous writings, recordings, or photographs w h ic h cannot conveniently be examined in court may be presented in the form of a chart, summary, or calculation. The originals, or d u p lic a t e s , shall be made available for examination or copying, or b o th , by other parties at reasonable time and place. The court may o r d e r that they be produced in court. Fed. R. Evid. 1006. We must decide if the opening was sufficient to allow in t h e s e exhibits. (1 ) E x h ib it 67A

Exhibit 67A is a chart created by the government showing how it believed T r o x le r 's Caribbean business scheme operated. Prior to its being offered, one of t h e undercover agents testified that the exhibit accurately summarized the m a n n e r in which Troxler had his clients set up their operations to evade taxes. The exhibit allegedly was a clearer, printed version of notes that she made d u r in g her undercover work. The government gave a copy of this chart to T r o x le r before it was offered. It was offered and admitted during IRS Special A g e n t Hampton's direct examination. D u r in g trial, Troxler's stated reasons for objecting to the admission of E x h ib i t 67A were vague. The following are the relevant portions of the trial t r a n s c r ip t concerning the admission of this Exhibit: G O V E R N M E N T : Have you had an opportunity to review Exhibit 6 7 A before? A G E N T HAMPTON: Yes, I have.

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No. 09-10871 G O V E R N M E N T : Does that document accurately summarize Mr. T r o x le r 's overseas investment program? A G E N T HAMPTON: Yes, it does. .... T R O X L E R : Your Honor, I would like to review that particular chart. That's not the chart that we ever used. That was created by s o m e o n e else. C O U R T : Right. [The government] created it. [T r o x le r reviews Exhibit 67A] T R O X L E R : Just from the quick review I just saw, I would have to d e c lin e or disagree with the way it's presented. C O U R T : Okay. But you have to give me a reason. .... T R O X L E R : Well, the reason is, is they portrayed it to be a scheme, s o m e kind of scheme that would say you can get your money back a n d all of that, as if you just call up and say I want my money back. But every time I was in the Caribbean, no banker would talk to me. And so I don't think that it's that easy. .... T R O X L E R : Your Honor, this -- this chart does not reflect or explain a n y th in g about the relationship of ownership. I mean, the r e la tio n s h ip of who's who. C O U R T : All right. Overrule -- .... T R O X L E R : It looks a little deceptive, because it looks like the m o n e y is the issue. And the issue is ownership and control, o b v io u s ly . C O U R T : I'm going to overrule your objection. And that would mean t h a t Government's Exhibit 67 A is admitted into evidence. O n appeal, Troxler suggests several specific reasons why this chart was in a c c u r a t e and should not have been admitted. He contends that the chart 12

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No. 09-10871 in a c c u r a t e ly "represented the return of money to the United States via debit c a r d , a mechanism that none of [Troxler's] actual clients testified they had used." He also argues the chart was inaccurate, because it included a depiction "of a `fir e w a ll' between [Troxler's] overseas companies, when no evidence showed any d iffic u lt y on the part of the government in acquiring overseas records." In a d d it io n , he contends the chart was inaccurate, because it generally represented " t h e function of the companies without reference to their official managing d ir e c t o r ." Finally, he argues the chart was admitted prior to admission of some o f the evidence supporting the chart. The district court had asked Troxler for explanations such as this prior to it s ruling. Such arguments were not then made. Whatever merit they may h a v e , and we reach no decision as to that, these objections were never argued b e fo r e the district court. When no objection is made, Troxler must show the a d m is s io n was error that was plain and affected his substantial rights. Puckett v . United States, 129 S. Ct. 1423, 1429 (2009). There has been no showing of e r r o r , much less a plain one that had the necessary effect. (2 ) E x h ib its 67B through 67E

E x h ib it s 67B through E are charts created by the government showing w h a t it believed to be the structure of the business entities used by Troxler and s e v e r a l of his clients. The record indicates the government gave copies of these c h a r ts to Troxler before they were offered. They were offered and admitted d u r in g IRS Special Agent Williams's direct examination. O n appeal, he challenges admission of these exhibits on the ground that t h e r e were selective omissions. Specifically, he contends that "[b]y omitting any r e fe r e n c e to Mr. Morris as a key player in these entities, the [charts portray] the e n tir e structure as simply a means to return the clients' money to them, without r e s p e c t in g the corporate identities that were created." 13

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No. 09-10871 A g a in , Troxler raised only a very general objection to the admission of t h e s e charts at trial: T R O X L E R : Your Honor, I object. It's -- it's mostly demonstrative a id . It's not evidence that should be admitted. .... COURT: Have you looked at [Exhibits 67 B, C, D, and E], Mr. T ro x le r ? T R O X L E R : Yes, sir. C O U R T : You have the same objection on each of them? T R O X L E R : Yes, sir. C O U R T : All right. Overrule your objection. T r o x le r never mentioned to the district court that he objected to the fact t h a t Morris's alleged role in the scheme was not included on the charts. Troxler h a s not demonstrated that reversal is warranted under the plain error standard. (3 ) A g e n ts ' Testimony Concerning Charts

For the first time on appeal, Troxler claims that Agents Hampton and W illia m s provided impermissible summary testimony concerning these charts d u r in g their direct examinations. Again, plain error is the standard. The testimony of these witnesses was cumulative to other evidence. At w o r s t , their testimony was harmless error. United States v. Okoronkwo, 46 F.3d 4 2 6 , 435 (5th Cir. 1995). A F F IR M E D .

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