USA v. Hakeem El-Bey

Filing

Filed opinion of the court PER CURIAM. El-Bey s conviction is VACATED, and we REMAND the case for a new trial. Diane P. Wood, Chief Judge; Daniel A. Manion, Circuit Judge and Ann Claire Williams, Circuit Judge. [6878772-1] [6878772] [15-3180]

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In the

United States Court of Appeals
For the Seventh Circuit
____________________
No. 15–3180
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
v.
HAKEEM EL-BEY,
Defendant-Appellant.
____________________
Appeal from the United States District Court for the
Northern District of Illinois, Eastern Division.
No. 14 CR 447— Richard A. Posner, Circuit Judge. *

____________________
ARGUED JANUARY 5, 2017 — DECIDED OCTOBER 24, 2017
____________________
Before WOOD, Chief Judge, and MANION and WILLIAMS, Circuit Judges.
PER CURIAM. Hakeem El-Bey filed six tax returns with the
Internal Revenue Service seeking $1.8 million in tax refunds
to which he was not entitled. He received $600,000 from the
* Of the United States Court of Appeals for the Seventh Circuit, sitting
by designation.

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IRS as a result of two of the returns, which he used to purchase a house and numerous cars. El-Bey represented himself
on charges of mail fraud and making false claims to the IRS.
He advanced irrelevant arguments, interrupted the judge,
and made it challenging to manage the trial. On appeal, ElBey seeks a new trial. Although the district court was understandably frustrated by a difficult litigant, El-Bey had a right
to a fair trial, and we cannot be assured that he received one.
Statements by the court in the presence of the jury conveyed
that El-Bey was guilty or dishonest and impaired El-Bey’s
credibility in the eyes of the jury. We remand the case for a
new trial.
I. BACKGROUND
In August 2009, Hakeem El-Bey, a self-described Moorish
national, created an Employer Identification Number with the
IRS for the Hakeem El-Bey Trust, naming himself as the trustee and fiduciary. Between August 2009 and November 2010,
El-Bey filed a total of six tax returns by mail with the IRS in
the name of the trust, each seeking a $300,000 refund. Each
return was essentially identical: each claimed $900,000 in trust
income, $900,000 in fees, $7,590 in exemptions, and $300,000
in withholding. El-Bey signed each return, identifying himself
as the fiduciary of the trust, and listed his date of birth as the
date of trust creation. El-Bey mailed three returns in the same
envelope to the IRS in August 2009. The IRS flagged these returns as frivolously filed and mailed three letters to El-Bey informing him he would be assessed a $5,000 penalty per return
if he failed to file a corrected return within twenty days.
In November 2009, El-Bey returned the three letters by
mail to the IRS and included various vouchers and tax forms

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bearing no relation to the returns. El-Bey filed the fourth identical tax return in December 2009. Based on this return, the
IRS issued and mailed a $300,000 refund check to “Hakeem El
Bey Trust, Hakeem El Bey Trustee.” El-Bey received and deposited the check into a bank account and used the funds to
cover personal expenses, to purchase two vehicles, and to buy
a house. He filed the fifth identical return in May 2010. Again,
the IRS issued and mailed a $300,000 refund check to the
Trust. El-Bey deposited the check into a new account and used
the funds for personal expenses and to purchase five vehicles.
Finally, in November 2010, El-Bey filed the sixth return, but
the IRS did not issue a refund to him for this return.
IRS criminal investigators interviewed El-Bey, and he admitted he signed and filed the returns, and received and deposited the checks. El-Bey did not explain how he came up
with the numbers on the return and refused to answer questions regarding the $300,000 withholding amount, though he
did eventually admit he had not received $900,000 each year
as the Trust fiduciary. He was indicted on two counts of mail
fraud, in violation of 18 U.S.C. § 1341, and six counts of making false claims to the IRS, in violation of 18 U.S.C. § 287.
A. Proceedings Before Trial Judge
El-Bey filed a motion to proceed without counsel and represent himself. The district court granted this motion to proceed pro se, and appointed standby counsel over El-Bey’s objection. Gabriel A. Fuentes, El-Bey’s standby counsel, appeared at every substantive proceeding in the district court
until he was discharged following El-Bey’s sentencing hearing. Fuentes did not act as or purport to be El-Bey’s counsel,
and El-Bey repeatedly and emphatically objected to Fuentes’s
presence.

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Before trial, El-Bey filed numerous motions related to admiralty law, the Uniform Commercial Code, and the Federal
Rules of Civil Procedure. Although irrelevant to the criminal
proceedings, the motions pertained to El-Bey’s sovereign citizen beliefs. See El v. AmeriCredit Fin. Serv., Inc., 710 F.3d 748,
750 (7th Cir. 2013) (“Sovereign citizens view the USG [U.S.
government] as bankrupt and without tangible assets … [and]
exploit this belief by filing fraudulent financial documents
charging their debt to the Treasury Department.” (quotation
marks and citation omitted)); see also Bey v. State, 847 F.3d 559,
560–61 (7th Cir. 2017). The district court ruled that evidence
and testimony concerning El-Bey’s sovereign citizen affiliation or views were to be excluded from the jury’s consideration. It advised El-Bey that non-compliance with this ruling
could cause him to be excluded from court.
At trial, two IRS representatives testified for the government regarding El-Bey’s tax returns and the three letters and
two refund checks that the IRS sent him. During cross-examination of the government’s first witness, IRS Representative
Kristy Morgan, El-Bey asked whether it was her understanding that compliance with federal tax laws was voluntary. Morgan responded:
The tax laws are based on individuals taking
their information, voluntarily putting them on
the tax returns, and mailing them to the IRS.
However, the law states if you don’t do that the
IRS can come in and file for you because the law
states you file and pay your income tax.
El-Bey continued, “Now, you just contradicted yourself. Because in one case you are saying that the IRS is saying filing

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taxes is voluntary compliance?” At this point, the court interjected and the following exchange took place in the presence
of the jury:
THE COURT: Look, paying taxes is not voluntary.
THE DEFENDANT: That’s what it says here. I’m
not saying it.
THE COURT: Come on.
THE DEFENDANT: Judge, I’m not saying it.
THE COURT: You don’t pay your tax, you go to
jail.
THE DEFENDANT: Judge, I’m just saying what
they are saying what they have—
THE COURT: Payment of taxes to the government is not voluntary.
THE DEFENDANT: Okay. Judge, so you
brought in from behind the law.
THE COURT: Just—look, I’m going to kick you
out if you keep on with this nonsense. You understand that? You can go watch the case from
another room.
THE DEFENDANT: Okay. I am through.
THE COURT: Don’t you say that tax payment is
voluntary.
THE DEFENDANT: I just asked a question. I
didn’t say it was. It’s on the paper. I didn’t say
that, Judge. But I’m done. I’m done.

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This concluded El-Bey’s cross-examination of Morgan. The
government had no redirect, so court recessed for the day.
Once the jury had left the courtroom, the district court continued to scold El-Bey, stating:
You don’t know the law because this stuff that
you have been shoving at me for the last month
about the Stamp Act[,] … Foreign Sovereign Immunities Act[,] … admiralty law[,] … the Uniform Commercial Code and about the common
law, this is all complete bullshit. … [Y]ou have
to obey me and not keep arguing with me. And
if you keep arguing, I kick you out, and I appoint Fuentes and he becomes the lawyer, and
you don’t get to say anything.
Before adjourning proceedings that day, the district court
threatened to eject El-Bey from the trial proceedings several
more times, outside of the jury’s presence, if he “continue[d]
disobeying [the court’s] orders.” The district court concluded
the first day of trial by telling El-Bey, “I have been very patient
with you. My patience is running out. And I want you to understand that.”
The next day, before the jury entered the courtroom, the
court apologized to El-Bey for its expression of frustration
with him the previous day. The government expressed its concern “that some of what happened yesterday may have been
potentially prejudicial to the defendant … importantly, perhaps, [it] has left a misimpression with the jury in certain respects.” After the jury entered the courtroom, the court explained, “[Y]ou don’t have to worry about the exchanges that
Mr. El-Bey and I have had. And I don’t want you to feel any

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hostility to Mr. El-Bey just because I got annoyed occasionally.” The district court then proceeded to read parts of the
transcript of the previous day’s exchange back to the jury, including portions of the text quoted above. It then told the jury:
[W]hen I said: If you don’t pay taxes you go to
jail, what I was simply saying was you must pay
taxes, and if you don’t pay taxes it's criminal and
you can be sent to jail. I was not talking about
Mr. El-Bey, because he isn’t charged with tax
evasion.
The district court then polled each individual juror about their
ability to be impartial in deciding the case against El-Bey. Each
juror responded that he or she could and would continue to
be impartial in his or her application of the law.
B. Jury Instructions
Before trial, the government submitted its proposed jury
instructions, which were based upon the Seventh Circuit’s
pattern instructions. El-Bey did not object to the government’s
instructions and submitted no instructions of his own. During
the jury instruction conference before closing arguments, the
government asked the district court if it anticipated any
changes to the elements or definitional instructions. The district court replied that it did not, and that its changes “would
be simply to try to eliminate jargon.” The parties continued to
closing believing that the district court planned to orally instruct the jury using the government’s proposed instructions
as written. However, the district court ultimately deviated
from the proposed instructions in its oral instructions, including when it orally instructed the jury on materiality:

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[O]ne [element] is that … the scheme to defraud
involved a materially false or fraudulent pretense, representation, or promise. That’s very
important, that notion of materiality. Because if
you—sometimes people will lie, for example,
out of embarrassment. You know, someone asks
your age, you knock a couple of years off, or
something like that. That would—those are
not—those little white lies, those are not material falsehoods. They don’t—I mean, they may
embarrass you when it’s discovered, but they’re
not—that’s not wrongful conduct. It’s when,
with specific reference to our case, if you—if
you tell—if you tell the Internal Revenue Service a lie which is capable of getting them to do
something which they would never do if they
knew the truth, namely, give you $300,000 to
which you’re not entitled, that is a material
falsehood. That’s fraud. And that is an element
of the charges.

The jury was provided copies of the written instructions
identical to those the government proposed. After deliberating for under two hours, the jury returned a guilty verdict on
all counts.
II. ANALYSIS
On appeal, El-Bey argues his conviction must be reversed
for three reasons. He argues that the district court conveyed
bias against him, depriving him of his Fifth Amendment right
to due process and a fair trial. He also contends that the district court infringed upon his Fifth Amendment right to due

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process and Sixth Amendment right to a jury trial by, he contends, partially directing a verdict on the element of materiality when it gave an ad-hoc oral instruction. Finally, he asserts
that the district court indirectly commented on his failure to
testify, in violation of his Fifth Amendment right to not testify, and impermissibly shifted the burden of proof from the
government to him. Because it will be dispositive of this appeal, we address only El-Bey’s contention that the district
court conveyed bias against him that deprived him of a fair
trial.
El-Bey asserts that the district court conveyed prejudicial
bias against him due to: (1) inflammatory remarks made towards him at trial in the jury’s presence; (2) language used
throughout the jury instructions tending to presume his guilt;
and (3) comparison of him to a violent street attacker during
the jury instructions. He argues that these statements would
be interpreted by the jury as a comment on his guilt, resulting
in improper influence on the jury. Therefore, he maintains, he
was deprived of his fundamental right to a fair trial. “We evaluate this claim using a two-part inquiry: (1) ‘whether the
judge in fact conveyed a bias regarding the defendant’s dishonesty or guilt’; and (2) ‘whether the complaining party has
shown serious prejudice resulting from the district court’s
comments or questions.’” United States v. Curry, 538 F.3d 718,
727 (7th Cir. 2008) (quoting United States v. McCray, 437 F.3d
639, 643 (7th Cir. 2006)). “The ultimate inquiry is whether the
defendant was deprived of a fair trial.” Curry, 538 F.3d at 727;
see United States v. Verser, 916 F.2d 1268, 1272–73 (7th Cir. 1990)
(“Fundamental to the right to a fair trial” is that the court must
not “give the impression to the jury that the judge believes
one version of the evidence and disbelieves or doubts another.”).

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It is clear from the transcript of the trial court proceedings
that El-Bey was a difficult litigant. He filed numerous irrelevant motions, disregarded court instructions, and often inappropriately interrupted the district court to express disagreement and dissatisfaction. Nonetheless, we agree with El-Bey
that the district court’s remarks during cross-examination of
the government’s first witness conveyed bias regarding his
dishonesty or guilt. The district court interrupted El-Bey at
the beginning of his cross-examination, stating, “Look, paying taxes is not voluntary.” When El-Bey noted that he was
only reading what the document stated, the district court remarked “Come on”—a statement “laced with skepticism.”
United States v. Martin, 189 F.3d 547, 554 (7th Cir. 1999). The
district court continued with further remarks in the presence
of the jury reflecting upon El-Bey’s dishonesty or guilt, stating, “You don’t pay your tax, you go to jail,” and “I’m going
to kick you out if you keep on with this nonsense.” While the
government contends that the district court’s statements were
merely meant to remind El-Bey that his sovereign citizen
views were not permitted at trial, the purpose of the comments cannot eliminate the bias conveyed to the jury by the
remarks here. The court’s statements that one who does not
pay taxes goes to jail and that El-Bey was acting in a nonsensical manner indicated bias about El-Bey’s guilt or honesty to
the jury. Contra id. (no bias in district court’s questioning of
witness where “district judge was firm, but not harsh or abusive in any way [and] [t]he questions were not laced with
skepticism and they gave no indication as to the judge’s
thoughts about [the defendant’s] honesty or dishonesty”).
We also find that these comments seriously impaired ElBey’s credibility as a pro se defendant in the eyes of the jury.
“Federal district judges are busy people and they get irritated

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when lawyers waste their time and that of jurors, witnesses,
and other lawyers. It is unfortunate, but it is inherent in an
adversary system, that the cost of this irritation is likely to be
borne primarily by the [defendant].” Cooper v. Casey, 97 F.3d
914, 919 (7th Cir. 1996). Reversible error occurs “when the
judge so impairs the lawyer’s credibility in the eyes of the jury
as to deprive the client of a fair trial.” Id. While a district court
“must often confront courtroom behavior by attorneys which
is deserving of censure, … the judge’s role in the exchange
[here] went far beyond the correction of an alleged misstatement.” United States v. Spears, 558 F.2d 1296, 1298 (7th Cir.
1977). The district court’s admonishments of El-Bey and
threat to eject him from court occurred in the presence of the
jury and “so discredited him in the eyes of the jury that he
could not have remained an effective spokesman for
hi[mself.]” Id. (finding reversible error where district court
admonished defense counsel by stating counsel’s statements
during closing were “absurd and bordering upon a lie” and
threatening to fine counsel for contempt in the presence of the
jury). This harm was exacerbated by the fact that the admonishment was not directed toward defense counsel and indirectly imparted upon the defendant, but, instead, was aimed
directly at the defendant while he was exercising his constitutional right to defend himself.
Next, we agree with El-Bey’s contention that the comments were prejudicial. We note that although the government argues on appeal that no prejudice occurred, it expressed concern to the district court during trial that the comments “may have been potentially prejudicial to the defendant.” We evaluate the district court’s comments “in the context of the course of the trial.” Curry, 538 F.3d at 728. Here, the
district court’s comments at the beginning of trial were not

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“inadvertent, isolated and ambiguous.” Id. Instead, the jury
heard several remarks, at different parts of the trial, that conveyed that El-Bey was guilty or dishonest. As detailed above,
the court made comments in the presence of the jury during
cross-examination of the first government witness which conveyed that El-Bey had committed a crime. The threat to kick
El-Bey out of court also seriously impacted his credibility in
the eyes of the jury. The jury was present throughout the entire exchange, and the district court’s remarks were “of a sort
most likely to remain firmly lodged in the memory of the jury
and to excite a prejudice which would preclude a fair and dispassionate consideration of the evidence.” Quercia v. United
States, 289 U.S. 466, 472 (1933) (finding prejudicial error in district court’s remarks to the jury that defendant’s hand wiping
during his testimony “is almost always an indication of lying”). The jury’s service that day ended with the court’s
threats to eject El-Bey from the courtroom fresh on the jurors’
minds, as it was the last exchange of the day. (We do not intend to imply that reprimanding El-Bey for inappropriately
introducing his sovereign citizen defense was unwarranted.
“However, any such reprimand or censure should have been
made outside the presence of the jury.” Spears, 558 F.2d at
1298.)
In addition to the remarks made during cross-examination
of the first government witness, El-Bey’s guilt was again conveyed during the oral jury instructions to the jury at end of
trial. At the end of its oral jury instructions, in the course of
explaining that there were six false claims charged and two
mail fraud charges, the district court stated to the jury:
The two mail fraud[s] being the two $300,000
checks that he, Mr. El Bey, received; and the four

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false claims being the $300,000 refunds that he
sought but that the Internal Revenue Service
didn’t give him, so that they were attempts.
Now, my mistake was that the first two counts
which are for the two checks he received, they
are also being charged as false claims. So they
are mail fraud because through use of the mail,
you know, he got all this money, but they are
also—they are also false claims. (emphasis
added).
But rather than clarifying what El-Bey was charged with, the
language conveyed to the jury that El-Bey was guilty by concluding that El-Bey’s receipt of the checks and money made
him guilty of mail fraud and making false claims.
El-Bey also points to another oral jury instruction, when
the court sought to explain to the jury that the IRS was an innocent victim:
[I]f maybe, as I say, they were better funded,
better organized, better administered the Internal Revenue Service would not have given Mr.
El Bey anything, that doesn’t bear on his guilt or
innocence. Because, I mean, there are a great
many crimes that would not occur if the victim
were more cautious, right? So if you go to the
toughest neighborhood in Chicago and decide
to take a stroll at 3:00 a.m. and you’re attacked
by someone, beaten up, you’re a fool for having
been there and exposed yourself to this person.
But the person who attacked you is guilty of a
crime. So you don’t blame the victim for the
crime, even if you think the victim was careless.

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We agree with El-Bey that comparing the fraud crimes El-Bey
was charged with to a violent attack on an individual could
be seen as an insinuation to the jury that El-Bey’s actions were
as reprehensible as those of a violent and brutal criminal.
“Judicial comments in the presence of the jury are subject
to special scrutiny because of the recognized fact that ‘the influence of the trial judge on the jury is necessarily and
properly of great weight, and that his lightest word or intimation is received with deference, and may prove controlling.”
United States v. Dellinger, 472 F.2d 340, 386 (7th Cir. 1972)
(quoting Quercia, 289 U.S. at 472). Here, the district court’s
“deprecatory and often antagonistic attitude toward the defen[dant] is evident in the record from the very beginning. It
appears both in the presence and absence of the jury.”
Dellinger, 472 U.S. at 386. 1 “Most significant, however, were
remarks in the presence of the jury, deprecatory of [El-Bey]
and [his] case.” Id. at 387. These statements implied that ElBey “was inept, bumptious, or untrustworthy, or that his case
lacked merit.” Id. Cumulatively, the comments “telegraphed
to the jury the judge’s contempt for the defen[dant,]” id., and
seriously prejudiced El-Bey. See also Spears, 558 F.2d at 1298
(“[W]e think the trial judge ‘lost his cool,’ departed from the
equanimity of spirit required of him, and seriously prejudiced
the defense.”).
But the government continues, arguing that even if the
court’s remarks were prejudicial, its curative instruction at the
1 In addition to the remarks made in the presence of the jury, outside
of the jury’s presence, the district court threatened to eject El-Bey from
trial proceedings several times, made several comments conveying his
dissatisfaction with El-Bey’s self-representation, and repeatedly remarked
that El-Bey did not know what he was doing and did not know law.

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beginning of the second day of trial and at the beginning of
its oral instructions to the jury resolved any prejudice. As the
government notes, “jurors are presumed to follow limiting
and curative instructions[,]” United States v. Smith, 308 F.3d
726, 739 (7th Cir. 2002), and we have previously found such
instructions reduce the risk of any prejudice the court may
have conveyed. See United Sates v. McCray, 437 F.3d 639, 644
(7th Cir. 2006). Here, the district court explained to the jury on
the second day that it shouldn’t “worry about the exchanges”
and shouldn’t “feel any hostility to Mr. El Bey just because I
got annoyed occasionally.” However, during this instruction,
the court read portions of the previous day’s exchange back
to the jury, reminding the jury, for example, of the court’s
comment that “If you don’t pay taxes you go to jail.” While
we understand the attempt to mitigate the effect of the previous day’s comments and to clarify that El-Bey was not
charged with tax evasion, reading the transcript back to the
jury meant the jury now heard the comments from the judge
a second time.
In its final instructions, the court gave the following instruction: “[Y]ou shouldn’t think that I have expressed or
taken any view on this. I respect your domain, which is to issue the verdict, and I’m not trying to influence you in any
way.” But it followed this remark by comparing El-Bey to a
violent assailant, and a “definite and concrete assertion of
fact, which [it] had made with all the persuasiveness of judicial utterance[,]”Quercia, 289 U.S. at 472, that El-Bey’s actions
constituted mail fraud and false claims. This assertion of the
district court’s view that El-Bey was guilty of the charges was
made shortly before the jury began its deliberations. Cf. United
States v. Donato, 99 F.3d 426, 435 (D.C. Cir. 1996) (per curiam)
(citation omitted) (negative comments by judge revealed

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“such a high degree of … antagonism as to make fair judgment impossible”).
Although there is more than enough evidence of El-Bey’s
guilt, “we must … conclude that the unfairness in the trial requires reversal. Any other holding would constitute the adoption of the principle that a defendant the court thinks is obviously guilty is not entitled to a fair trial.” Spears, 558 F.2d at
1297.
III. CONCLUSION
El-Bey’s conviction is VACATED, and we REMAND the case
for a new trial.