Michelle Pounds, et al. v. Commissioner, TC Memo 2011-202 , Code Sec(s) 6015.
MICHELLE POUNDS, Petitioner, AND DARRYL JOHNSON, Intervenor v. COMMISSIONER OF INTERNAL REVENUE, Respondent .
Case Information: Code Sec(s): 6015
Docket: Docket No. 30363-09.
Date Issued: 08/17/2011
Judge: Opinion by PARIS
HEADNOTE
XX.
Reference(s): Code Sec. 6015
Syllabus
Official Tax Court Syllabus
Counsel
Gregg C. Goodwin and Danielle K. Schulte, for petitioner.
Darryl Johnson, pro se.
Ann L. Darnold, for respondent.
Petitioner signed the divorce decree pro se, as neither party
Opinion by PARIS
MEMORANDUM FINDINGS OF FACT AND OPINION
Intervenor seeks review of respondent's final determination that petitioner is entitled to relief from joint and several liability under section 6015(c) 1 with respect to a deficiency in income tax of $25,575 for tax year 2004.
FINDINGS OF FACT
Some of the facts have been stipulated and are so found. The stipulation of facts and the attached exhibits are incorporated herein by this reference. Both petitioner and intervenor resided in Kansas at the time the petition and the notice of intervention were filed.
Background
Michelle Pounds (petitioner) and Darryl Johnson (intervenor) were married on April 27, 2003. The couple's marriage ended in a physical separation in May 2004, a legal separation on March 24, 2005, and finally a divorce on October 13, 2005. 2 Before and during the marriage, petitioner worked for intervenor in intervenor's automobile repossession business (company). Intervenor and petitioner started dating when petitioner was a teenager and dated off and on approximately 10 years before getting married. Petitioner's Role at the Company During the taxable year at issue petitioner worked as an office manager and a secretary in intervenor's company, roles she filled before and during the marriage. Intervenor was in the automobile repossession industry and was a sole proprietor throughout all of the periods discussed in this opinion. The company was operated out of the backyard of the Peck, Kansas, home. As the office manager, petitioner's primary duty was data entry of receipts for the recovery of the automobiles; however, she also helped to repossess vehicles when necessary, make reports on the conditions of the vehicles, and talk to banks about the recovery of their automobiles.
Petitioner never held an ownership interest in the company. In her role as a secretary, petitioner was always treated as an employee of the company and was paid a salary for her work. In addition to her salary, intervenor sometimes paid petitioner lump sums of money to “stay away” after they had had an argument. All of these payments were made by checks intervenor signed using the company checking account. 3 After the separation but before the divorce, petitioner continued to work for intervenor sporadically as she moved in and out of the Peck, Kansas, house depending on their relationship status at the moment.
Before and during the marriage, intervenor and petitioner rarely, if ever, discussed business or financial matters. Even though petitioner worked as a secretary, petitioner was never involved with the overall financial health or reporting of the company and was unaware of the company's financial position at any given time. 4 In fact, intervenor's stepmother, Linda Johnson, was employed with the company from its inception and, even though she had no formal accounting experience, was in charge of the company's accounting. Intervenor's stepmother testified that while in that role in 2004 as company accountant she took only 1 week off and handed the accounting books to petitioner. Upon her return, intervenor's stepmother realized that petitioner had done no accounting work, and intervenor's stepmother had to work hard to update the company's records. Intervenor and Petitioner's Relationship Intervenor and petitioner had a tumultuous personal relationship. The first sign of domestic violence was on October 14, 1997, 6 years before their marriage, when petitioner filed a police report with the Wichita Police Department alleging battery and domestic violence by intervenor. Despite this incident, petitioner and intervenor were married on April 27, 2003. The relationship, however, remained rocky. In May 2004 petitioner moved out of intervenor's home and in with a friend until she got her own apartment in June 2004. On July 29, 2004, a second incident occurred between petitioner and intervenor after which petitioner filed an incident report with the Wichita Police Department alleging intimidation by intervenor.
A few months later, in October 2004, petitioner signed a search warrant which allowed local law enforcement officers in Peck to search the house and yard for stolen vehicles and parts. Furious with petitioner because she allowed the police to search their house for stolen car parts pursuant to a search warrant, intervenor filed a petition for a protective order against petitioner on October 8, 2004. On October 21, 2004, the protective order was served on petitioner, granting intervenor exclusive possession of the Peck, Kansas, home.
Intervenor and petitioner continued their relationship despite the protective order. On November 17, 2004, intervenor and petitioner jointly signed an application for a mortgage on the house in Peck, Kansas. However, the relationship continued to be a struggle, and, on December 1, 2004, petitioner signed a quitclaim deed which relinquished her interest in the home and gave intervenor sole possession. On that same day and with intervenor making the downpayment, petitioner purchased her own home in Wichita, Kansas. At some point during the day intervenor and petitioner had an altercation that resulted in intervenor's breaking petitioner's jaw. As a result, petitioner spent 4 days in the hospital. Consequently, on December 3, 2004, petitioner sought a protective order precluding intervenor from entering or coming around her new Wichita, Kansas, home. The District Court of Sedgwick County had a hearing and issued that protective order on December 16, 2004.
Despite their previous issues and the protective orders, intervenor and petitioner reunited to celebrate the Christmas holiday in 2004. However, on March 22, 2005, trouble arose again, and petitioner filed another police report with the Wichita Police Department alleging intimidation by intervenor.
Even though they had been physically separated for 10 months at the time, the couple legally separated on March 24, 2005. Pursuant to a separation agreement drafted by intervenor and executed on that day, petitioner retained possession of a 2003 Dodge pickup truck for which intervenor continued to make payments, and a joint restraining order was issued. Just 7 days later, on March 29, 2005, petitioner filed another police report alleging intervenor had been shooting paintballs at her house and intimidating her with harassing phone calls.
On October 13, 2005, petitioner and intervenor were issued a divorce decree. The divorce was uncontested, and intervenor was awarded the home in Peck, Kansas, where he lived and ran his business. 5 The divorce decree provided that petitioner and intervenor were responsible for filing separate 2005 Federal and State income tax returns; however, the joint returns filed for tax year 2004 and prior years would continue to be the joint responsibility of petitioner and intervenor. Consequently, intervenor testified that he and petitioner were expecting an $8,000 credit from their tax return for tax year 2003 and, pursuant to the divorce decree which mandated that they split the tax liability, they were expecting to split that refund upon receipt. 6 In addition to obtaining a divorce, both petitioner and intervenor filed for bankruptcy that month. 7 The 2004 Income Tax Return On February 8, 2005, the parties signed an engagement letter to hire a certified public accountant (C.P.A.) to prepare their joint 2004 income tax return (2004 return) and promised to present the C.P.A. with the complete and correct information necessary for him to prepare the 2004 return. In April 2005 intervenor and petitioner timely requested an extension of time to file their 2004 return. The return was untimely filed on October 17, 2005.
Because of the strains of their relationship, petitioner was unaware of the contents of the 2004 return. Intervenor was the sole party responsible for gathering and reviewing the documents to be presented to the C.P.A. who prepared the 2004 return. In fact, petitioner had no idea of the contents of the 2004 return and knew only that intervenor had promised that he would expedite their divorce if she promptly signed the tax return. Intervenor and petitioner were divorced just 4 days before petitioner's signing the tax return. 2004 Tax Audit The 2004 return was selected for an audit, which began in 2007 and concluded on July 7, 2008. The 2004 return reported no tax due, with the only items on the return being a $274 State income tax refund and a loss on Schedule C, Profit or Loss from Business, of $25,912 from the company totaling an overall loss for that year of $25,638. The auditor, however, determined that tax was due and made adjustments to the 2004 return, including the disallowance of Schedule C deductions of $32,564 which were claimed for interest, car and truck expenses, insurance, repairs, and other miscellaneous expenses. The auditor also determined that Schedule C income of $95,961 was unreported as was a capital gain of $19,682 related to foreclosure of a business property. In total, the auditor determined that petitioner and intervenor owed $25,575 in taxes for 2004 and $6,861.05 in interest as of August 2008. Petitioner and intervenor both agreed to the assessment of the deficiency by signing a Form 870, Waiver of Restrictions on Assessment and Collection of Deficiency in Tax and Acceptance of Overassessment.
On July 8, 2008, intervenor and petitioner signed a Form 4549, Income Tax Examination Changes, and consented to the assessment of the tax deficiency of $25,575 as a result of the audit. Intervenor provided all of the information to the auditor for the examination, including all of the information regarding the business activities. However, the record reflects that the auditor contacted petitioner regularly and unsuccessfully for records or information regarding the company. 8 Petitioner was unable to produce any records as she never was responsible for or knew of the details of the company's finances. Assessment was made on October 6, 2008.
Petitioner seeks relief under section 6015 from joint and several liability for the deficiency determined by audit. On August 19, 2008, petitioner submitted timely to respondent a Form 8857, Request for Innocent Spouse Relief, seeking relief from joint and several liability under section 6015 for tax year 2004. On October 3, 2008, intervenor signed and submitted a completed Form 12508, Questionnaire for Non-Requesting Spouse, to respondent. On January 21, 2009, respondent made a preliminary determination that relief would be denied under section 6015(f) for that year. Petitioner then sought Appeals review of that determination, and Appeals determined that the case should have been reviewed for relief under section 6015(b) or (c) since the tax resulted from an understatement of tax and an assessed deficiency. On August 6, 2009, a second determination was made that relief was not appropriate under section 6015(b) or (c). Petitioner then submitted a Form 12509, Statement of Disagreement, which was received by respondent on September 3, 2009, but was not forwarded to the appropriate office. However, unbeknownst to petitioner, respondent had issued a final determination letter on September 11, 2009, without considering the information submitted with petitioner's Appeals request. On December 15, 2009, after review of the Appeals request, the innocent spouse unit issued a revised preliminary determination granting petitioner innocent spouse relief under section 6015(c). On December 22, 2009, without the knowledge that respondent had reversed his position and granted petitioner innocent spouse relief, petitioner filed a petition with this Court. After receiving notice, intervenor filed timely a notice of intervention on April 19, 2010.
OPINION
In general, spouses who elect to file a joint Federal income tax return for a taxable year are jointly and severally liable for the entire amount of tax reported on the return, as well as for any deficiency subsequently determined, even if all of the income giving rise to the tax liability is allocable to only one Sec. 6013(d)(3); Butler v. Commissioner, 114 T.C. 276, of them. 282 (2000). Section 6015, however, provides exceptions to the general rule of joint and several liability in limited circumstances. Alt v. Commissioner, 119 T.C. 306, 311 (2002), affd. 101 Fed. Appx. 34 [93 AFTR 2d 2004-2561] (6th Cir. 2004).
One of those circumstances is provided for in section 6015(c). Upon the election of its application by the taxpayer, that section limits a spouse's liability for a deficiency to the portion of the deficiency properly allocable to that spouse under section 6015(d). In general, an item that gives rise to a deficiency on a joint Federal income tax return will be allocated to each individual who files the joint return in the same manner as that item would have been allocated had those individuals filed separate returns. Sec. 6015(d)(3)(A). Respondent concedes petitioner's entitlement to relief under section 6015(c). The concession presumably contemplates a section 6015(d) allocation satisfactory to both of them. However, intervenor challenges petitioner's entitlement to section 6015(c) relief.
According to intervenor, petitioner knew about the items giving rise to the 2004 deficiency, that is, the financial position of the company, including all income, deductions, and expenditures, and that knowledge disqualifies her from section 6015(c) relief. He contends that the evidence that he offered might support a finding that petitioner had “reason to know” about the understatement of tax shown on the return. See, e.g. Price v. Commissioner, 887 F.2d 959 [64 AFTR 2d 89-5822] (9th Cir. 1989); King v. Commissioner, 116 T.C. 198, 204 (2001); Wiener v. Commissioner, T.C. Memo. 2008-230 [TC Memo 2008-230]. But a requesting spouse's “reason to know” of the item is not sufficient to deny relief under section 6015(c). If, as here, all of the other requirements of that section have been satisfied, then, as relevant here, the burden of proof is shifted to the Commissioner and relief is denied to the requesting spouse only if the Commissioner “demonstrates that *** [the requesting spouse] had actual knowledge, at the time such individual signed the return, of any item giving rise to a Sec. 6015(c)(3)(C); Charlton v. Commissioner, 114 deficiency”. T.C. 333, 341 (2000); Martin v. Commissioner, T.C. Memo. 2000- 346 [TC Memo 2000-346].
An issue arises where the burden of proof shifts to the Commissioner in cases when the Commissioner favors granting relief and the nonrequesting spouse intervenes to oppose it. The Court has resolved this conflict of burden shifting by determining whether actual knowledge has been established by a preponderance of the evidence as presented by all three parties. See Knight v. Commissioner, T.C. Memo. 2010-242 [TC Memo 2010-242]; McDaniel v. Commissioner, T.C. Memo. 2009-137 [TC Memo 2009-137]; Stergios v. Commissioner, T.C. Memo. 2009-15 [TC Memo 2009-15].
To determine whether the requesting spouse had actual knowledge, the Court looks to the surrounding facts and circumstances for “an actual and clear awareness (as opposed to reason to know)” of the items giving rise to the deficiency. See Cheshire v. Commissioner, 115 T.C. 183, 195 (2000), affd. 282 F.3d 326 [89 AFTR 2d 2002-900] (5th Cir. 2002).
Other than matters stipulated, respondent offered no evidence at trial. Petitioner and intervenor each testified on his or her own behalf, and numerous documents were introduced into evidence on intervenor's behalf. Petitioner worked for the company which intervenor ran for the tax year at issue; however, she never owned any interest in the company and performed only limited tasks. Intervenor was solely responsible for maintaining the checking account from which the finances of the company and the home were handled. He was the only signatory to checks drawn off of that account; had actual knowledge of the time and the manner in which the hail-damaged cars were “fixed”; was responsible for hiring and helping the C.P.A. who prepared the 2004 return using the information that intervenor prepared and gathered from the company and his and petitioner's personal records; was responsible for maintaining the financial health of the company; and was responsible for running the company. Petitioner had no actual knowledge of the items on which the deficiency was based.
In fact, petitioner had moved out of intervenor's house and had been separated from him for months when the hail-damaged cars were fixed and for over a year when the tax return was filed. Petitioner testified that she had absolutely no idea of intervenor's business affairs at the time she signed the tax return and that her signature on the return was the only part she took in the tax return preparation.
Conclusion
Because petitioner did not have actual knowledge of the items that resulted in the deficiency during tax year 2004, she is entitled to relief from joint and several liability for the deficiency under section 6015(c).
The Court has considered the remaining arguments of all parties for results contrary to those expressed herein and, to the extent not discussed above, finds those arguments to be irrelevant, moot, or without merit.
To reflect the foregoing, Decision will be entered for petitioner.
1
Section references are to the Internal Revenue Code of 1986 as amended and in effect at all relevant times, and/or in effect for the year at issue. Rule references are to the Tax Court Rules of Practice and Procedure.
2
Though the couple did not receive a divorce decree until Oct. 13, 2005, petitioner and intervenor physically separated in May 2004, when petitioner moved out of the house in which intervenor lived and ran his automobile repossession business. Petitioner initially stayed with a friend and later moved into an apartment in June 2004.
3
Intervenor did not observe business formalities during his management of the company. Intervenor used the company account for both personal and business expenses. Even though petitioner frequently wrote checks for the company's expenses and presented them to intervenor to sign, petitioner had no signing authority on the company bank account during the tax year at issue or at any other time.
4
Testimony offered at trial showed that no formal financial statements were ever prepared for the company, and intervenor admitted that although he should have been, he was never concerned with the formalities of running the company, including accounting and the tax consequences of its operations.
5
The divorce decree was drafted by the attorney whom intervenor had used for his personal and the company's legal issues. Neither petitioner nor intervenor contested the divorce, so they decided to use one attorney for efficiency. However, petitioner did not seek independent counsel or know she had the right to seek independent counsel to ensure her interests were being represented and to avoid the apparent conflict of interest. felt it was necessary to incur additional legal fees.
6
On the 2004 return an $8,000 credit from an overpayment on the tax year 2003 return was applied to their 2004 return to reduce their 2004 tax liability. Petitioner and intervenor received neither the refund nor the credit because they were never entitled to the credit. Upon audit, it was conceded that the tax calculations for tax years 2003, 2004, and 2005 were erroneous, and petitioner and intervenor never had an overpayment.
7
Intervenor paid the costs of both his and petitioner's bankruptcies.
8
Petitioner alleged and the audit income adjustments reflect that intervenor made kickbacks on insurance fraud relating to cars that received hail damage while in his possession. When asked about the income he received from hail damage on the 39 vehicles, intervenor said that he and the auto repair shop worked out a “deal” in which he did not have to pay the $1,000 deductible for each car fixed.
Friday, August 26, 2011
Thursday, August 25, 2011
Innocent Spouse Case
Victoria Stennett-Bailey v. Commissioner, TC Memo 2011-205 , Code Sec(s) 6015.
VICTORIA STENNETT-BAILEY, Petitioner, AND CASMAS BAILEY, Intervenor v. COMMISSIONER OF INTERNAL REVENUE, Respondent .
Case Information: Code Sec(s): 6015
Docket: Docket No. 1934-10.
Date Issued: 08/22/2011
HEADNOTE
XX.
Reference(s): Code Sec. 6015
Syllabus
Official Tax Court Syllabus
Counsel
Victoria Stennett-Bailey, pro se.
Casmas Bailey, pro se.
Marissa J. Savit, for respondent.
MEMORANDUM OPINION
HALPERN, JUDGE: This case arises from a request by petitioner of the Internal Revenue Service (IRS) for equitable relief from joint and several liability for Federal income tax for petitioner's 2006 taxable (calendar) year (2006). The IRS denied the request, and petitioner brought this action protesting that denial. We have jurisdiction to determine the appropriate See sec. 6015(e)(1); 1 relief (if any) available to petitioner. Pullins v. Commissioner, 136 T.C. __, __ (2011) (slip op. at 10). Both the scope and standard of our review are de novo. Pullins v. Commissioner, supra at __ (slip op. at 11). Petitioner bears the burden of proof. See Rule 142(a); Pullins v. Commissioner, supra at __ (slip op. at 11).
Intervenor, petitioner's husband (Mr. Bailey), objects to the relief sought by petitioner, but since he neither executed the stipulation of facts that respondent prepared for his signature, appeared at trial (although he appeared earlier, at calendar call), nor filed a brief in this case, we assume he has declined to prosecute his objection. We shall dismiss this case with respect to him for failure to prosecute. See Rule 123(b); Tipton v. Commissioner, 127 T.C. 214, 218 (2006).
For the reasons that follow, we determine that petitioner is not entitled to equitable relief from joint and several liability for 2006.
Background
Some facts have been stipulated and are so found. The stipulation of facts, with accompanying exhibits, is incorporated herein by this reference.
At the time the petition was filed, petitioner resided in New York State.
In October 2007, petitioner and Mr. Bailey made a joint return of Federal income tax (return) for 2006. They signed the return on October 12, 2007. The return shows total tax of $29,245, a withholding credit of $5,220, a credit for Federal telephone excise tax of $60, an estimated tax penalty of $314, and an amount owed of $24,279 (unpaid tax). No payment accompanied the return.
Petitioner applied to the IRS for equitable relief from joint and several liability for 2006 by submitting to it a Form 8857, Request for Innocent Spouse Relief, dated November 5, 2008 (request). In response to the request, the IRS made a preliminary determination to deny the request on the ground that petitioner had not shown that it would be unfair to hold her responsible for the unpaid tax. The IRS stated: “You did not prove, [sic] that at the time you signed the return, you had reason to believe the tax would be paid. Also, the documentation you provided does not prove economic hardship.” Petitioner disagreed with the IRS' preliminary determination, but, thereafter, the IRS finalized its determination, stating: “The information we have available does not show you meet the requirements for relief. You did not show it would be unfair to hold you responsible.”
During 2006 and throughout the administrative proceeding in this case, petitioner and Mr. Bailey were married.
We conducted a trial in this case. At the conclusion of the trial, we set a schedule for both opening and answering briefs. We instructed petitioner as to the importance of submitting briefs to assist us in considering the evidence in this case since, among other things, the stipulated exhibits comprise hundreds if not more than a thousand pages. We directed her to Rule 151(e), which addresses the form and content of briefs, and we emphasized the importance of complying with the rule. Rule 151(e)(3) provides that an opening brief shall contain proposed findings of fact, in the form of numbered, concise statements of essential facts (”and not a recital of testimony nor a discussion or argument relating to the evidence or the law”) supported by “references to the pages of the transcript or the exhibits or other sources relied upon to support the statement.” While petitioner's opening brief does consist in part of numbered, relatively concise statements of fact, it fails to provide the required references to the trial transcript, the exhibits, or the stipulation. In his answering brief, respondent objects to many of petitioner's proposed findings of fact as not being supported by evidence in the record. Respondent asks us to strike those portions of petitioner's opening brief that do not comply with the Rules. We shall not do so, but to the extent that we cannot easily verify petitioner's proposed findings of fact (aided in part by respondent's answering brief), we disregard them. Moreover, in her answering brief, petitioner fails to comply with the requirement of Rule 151(e) that she identify by number the statements of proposed findings of fact made by respondent in his opening brief to which she objects, setting forth her reasons for objecting. She merely makes statements of general rebuttal to many of respondent's proposed findings; e.g., with respect to respondent's proposed findings relevant to whether she knew or should have known about the 2006 underpayment of tax: “I signed the return with knowledge of the tax liability. However, this does not prove that I knew that the tax liability would not be paid by the [sic] Mr[.] Bailey, who had enough liquid assets to meet his tax obligation.” Accordingly, we conclude that respondent's proposed findings of fact are correct except to the extent that petitioner objects to a particular proposed finding and identifies evidence (or we can identify evidence) supporting See, e.g., Jonson v. Commissioner, 118 T.C. 106, the objection. 108 n.4 (2002), affd. 353 F.3d 1181 [93 AFTR 2d 2004-323] (10th Cir. 2003).
Discussion
I. Introduction As a general rule, spouses making a joint Federal income tax return are jointly and severally liable for all taxes shown on the return or found to be owing. Sec. 6013(d)(3). In certain situations, however, a joint return filer can avoid such joint and several liability by qualifying for relief therefrom under section 6015. There are three types of relief available under section 6015: (1) Full or apportioned relief under , section 6015(b), (2) proportionate tax relief for divorced or separated taxpayers under section 6015(c), and (3) equitable relief under section 6015(f), when relief is unavailable under either section 6015(b) or (c). Petitioner's only claim is that she is entitled to equitable relief under section 6015(f).
Section 6015(f) provides:
SEC. 6015(f). Equitable Relief.—Under procedures prescribed by the Secretary, if—
(1) taking into account all the facts and circumstances, it is inequitable to hold the individual liable for any unpaid tax or any deficiency (or any portion of either); and
(2) relief is not available to such individual under subsection (b) or (c), the Secretary may relieve such individual of such liability.
The parties agree that petitioner is eligible to be considered for equitable relief under section 6015(f) because relief is not available to petitioner under section 6015(b) or (c). They disagree, however, as to whether she has shown her entitlement to that relief.
II. Revenue Procedure (Rev. Proc.) 2003-61
A. Introduction
In accord with the statutory provision that relief is to be granted under section 6015(f) following “procedures prescribed by the Secretary,” the Commissioner has issued revenue procedures to guide its employees in determining whether a taxpayer is entitled to relief from joint and several liability. See Rev. Proc. 2003- 61, 2003-2 C.B. 296, modifying and superseding Rev. Proc. 2000- 15, 2000-1 C.B. 447. Rev. Proc. 2003-61, supra, lists the factors that IRS employees should consider, and the Court consults those same factors when reviewing the IRS' denial of relief. Pullins v. Commissioner, supra at __ (slip op. at 11).
Rev. Proc. 2003-61, supra, provides a three-step analysis for IRS employees to follow in evaluating requests for relief: Rev. Proc. 2003-61, sec. 4.01, 2003-2 C.B. at 297 (section 4.01), lists seven threshold conditions that must be met before the IRS will grant any relief; Rev. Proc. 2003-61, sec. 4.02, 2003-2 C.B. at 298 (section 4.02), lists circumstances in which the IRS will ordinarily grant relief as to liabilities that were reported on a return (the unpaid tax at issue in this case); and Rev. Proc. 2003-61, sec. 4.03, 2003-2 C.B. at 298 (section 4.03), sets out eight nonexclusive factors that the IRS will consider in determining whether equitable relief should be granted. See Rev. Proc. 2003-61, secs. 4.01-4.03, 2003-2 C.B. at 297-298. In addition, Rev. Proc. 2003-61, sec. 4.03(2), 2003-2 C.B. at 298, states: “No single factor will be determinative of whether equitable relief will or will not be granted in any particular case. Rather, the Service will consider and weigh all relevant factors, regardless of whether the factor is listed in *** section 4.03.”
B. Section 4.01: Threshold Conditions Respondent concedes that petitioner meets the threshold conditions set forth in section 4.01.
C. Section 4.02: Circumstances Ordinarily Allowing Relief
1. Introduction
Section 4.02 provides three conditions that, if satisfied, will ordinarily qualify a requesting spouse for relief by the IRS from liability for an underpayment of a properly reported liability. The conditions are:
(a) On the date of the request for relief, the requesting spouse is no longer married to, or is legally separated from, the nonrequesting spouse, or has not been a member of the same household as the nonrequesting spouse at any time during the 12-month period ending on the date of the request for relief.
(b) On the date the requesting spouse signed the joint return, the requesting spouse had no knowledge or reason to know that the nonrequesting spouse would not pay the income tax liability. The requesting spouse must establish that it was reasonable for the requesting spouse to believe that the nonrequesting spouse would pay the reported income tax liability. ***
(c) The requesting spouse will suffer economic hardship if the Service does not grant relief. *** Rev. Proc. 2003-61, sec. 4.02(1), 2003-2 C.B. at 298.
2. Divorced, Separated, or Living Apart Petitioner concedes that she is still married to Mr. Bailey, and she makes no argument that they are legally separated. She testified that Mr. Bailey moved out of their marital residence (which she owns) in November 2006. Respondent concedes that when the request was made Mr. Bailey had been absent from that residence for more than 12 months. Nevertheless, respondent argues, that absence was temporary and, thus, does not qualify as an absence for determining whether petitioner and Mr. Bailey were not members of the same household. See sec. 1.6015-3(b)(3), Income Tax Regs.; Rev. Proc. 2003-61, sec. 4.03(2)(a)(i). Indeed, petitioner testified at trial: "[U]ntil today I always thought Mr. Bailey was going to move back in the home. He was picking up groceries. He was doing things. He said he needed time away from the home, and I believed him.” On brief, petitioner contradicts her testimony as to the duration of her belief, claiming, without any support from the record, that her belief that he would return to the marital home “was brief and fleeting.” Nevertheless, given Mr. Bailey's approximately 2-year absence from their marital home when petitioner made the request in November 2008, we think it not unreasonable to value experience over hope and find that it was reasonable then to believe that he would not return. We conclude that his absence was, thus, not temporary, and he had not been a member of her household for at least 12 months when she made the request. Petitioner satisfies the first condition.
3. Knowledge or Reason To Know
Petitioner and Mr. Bailey signed the return on October 12, 2007, and she concedes that she signed it with knowledge of the resulting tax liability. She claims that that does not prove that she knew or had reason to know that Mr. Bailey would not pay the reported tax liability. That is so. But respondent proposes that we find as facts that, on October 12, 2007, (1) Mr. Bailey did not have an individually owned bank account, (2) petitioner and Mr. Bailey jointly owned both an HSBC checking and an HSBC money market account, both of which, on that date, were empty or nearly so, and (3) when she signed the return, she knew that Mr. Bailey had no liquid assets to draw upon to pay the reported liability. Because petitioner has not contradicted those proposed findings, we find accordingly. While on October 12, 2007, petitioner may not have known that Mr. Bailey would not pay the reported liability, she has failed to prove that she had no reason to know that Mr. Bailey would not pay that liability. Indeed, the findings we have just made suggest the contrary. Petitioner fails to satisfy the second condition.
4. Economic Hardship
Economic hardship is defined as an inability to meet reasonable basic living expenses. Sec. 301.6343-1(b)(4), Proced. & Admin. Regs. In her opening brief, petitioner claims, with no citation of the record, “that she will suffer extraordinary financial hardship within the meaning of the *** [Internal Revenue Code] if she is required to pay this tax.” She echoes that claim in her answering brief, supported by exhibits attached to that brief, which we detached and returned to her as ex parte statements prohibited in a brief. See Rule 143(c). Respondent emphasizes what petitioner failed to show to establish economic hardship; to wit, she did not introduce into evidence account statements showing the current balances in her bank accounts, evidence of the current values of her equities in the various properties she concedes she owns, or evidence of her current income and personal expenses. Respondent looks at the income and expenses information petitioner reported in the request, which shows equal monthly income and expenses of $7,615, and he claims that, pursuant to his collection standards, the allowable living expenses for a four-person household are approximately $5,725 and that petitioner's stated income exceeds the allowable amount. He also points out that petitioner admits that she drives a Lexus automobile, claims school expenses of $2,250 a month for sending her children to private school, and owns a vacation home in the Poconos (which petitioner testified had no value). The parties have stipulated that petitioner currently owns and operates at least three companies involved in the rental real estate business and, directly or through those companies, owns at least seven properties. Again, petitioner has failed to carry her burden of proving that she will suffer economic hardship if we do not grant her relief, and respondent's arguments and the stipulations suggest the contrary. Petitioner fails to satisfy the third condition.
5. Conclusion
Having satisfied only the first of the three conditions set forth in section 4.02(1), petitioner is not entitled to relief under the circumstantial test set forth in section 4.02.
D. Section 4.03: Mitigating Factors
1. Introduction
Section 4.03 applies to requesting spouses who filed a joint return, request relief under section 6015(f), and satisfy the threshold conditions of section 4.01, but do not qualify for relief under section 4.02. It lists eight nonexclusive factors to be considered in determining whether, taking into account all the facts and circumstances, it is equitable to grant the requesting spouse full or partial equitable relief under section 6015(f). The eight factors are: (1) Marital status, (2) knowledge or reason to know, (3) economic hardship, (4) nonrequesting spouse's legal obligation to pay the tax pursuant to a divorce decree or agreement, (5) significant benefit, (6) good-faith effort to comply with tax laws, (7) spousal abuse, and (8) mental or physical health. The last two factors, if present, will weigh in favor of equitable relief, but, if not present, will not weigh against equitable relief. We have already addressed the first three factors, and the first weighs in petitioner's favor, while the second two do not.
2. Legal Obligation
This factor is neutral since petitioner and Mr. Bailey are not divorced.
3. Significant Benefit
The test here is whether petitioner received significant benefit (beyond normal support) from the unpaid income tax liability. See Rev. Proc. 2003-61, sec. 4.03(2)(a)(v), 2003-2 C.B. at 299. The unpaid tax is in substantial part due to Mr. Bailey's gain on his sale of real property located on Sheffield Avenue in Brooklyn, New York. Mr. Bailey deposited $249,838 of his proceeds from the sale in petitioner and Mr. Bailey's jointly owned HSBC money market account, which had a $52 balance before the deposit. On March 21, 2007, petitioner withdrew $80,000 from that account, virtually emptying the account, and deposited that sum into her individual savings account. At least $49,948 of the $80,000 she withdrew came from the proceeds deposited by Mr. Bailey. Petitioner used the withdrawn funds to pay the mortgage on her residence, to pay expenses of her Poconos vacation home, to pay her children's private school tuition, and to pay for food, utilities, and living expenses. Respondent suggests that petitioner's withdrawal prevented Mr. Bailey from paying the unpaid tax from the sale proceeds he had received and deposited in their joint account, deciding instead to use a portion of those proceeds for her own benefit. There is no evidence that she reserved anything for taxes, although she knew her withdrawal emptied the account and she had no assurance that Mr. Bailey had reserved anything for taxes. Petitioner has failed to carry her burden of showing that she did not receive significant benefit (beyond normal support) from the unpaid tax. Indeed, the evidence suggests the contrary.
4. Compliance With the Tax Laws
The test here is whether petitioner has made a good-faith effort to comply with the income tax laws following 2006, the year here in issue. See Rev. Proc. 2003-61, sec. 4.03(2)(a)(vi). Petitioner does not address this factor on brief beyond claiming that she is in full compliance. The parties have stipulated that petitioner did not file her 2008 Federal income tax return until July 19, 2010. There is no evidence that petitioner obtained an extension of time to file that return. Petitioner has failed to carry her burden of proving a good-faith effort to comply with the tax laws. Indeed, the evidence suggests the contrary.
5. Spousal Abuse
Petitioner makes no claim of spousal abuse, and this factor is of no account.
6. Mental or Physical Health
The test here is whether petitioner was in poor mental or physical health on the date she signed the return or at the time of the request. See Rev. Proc. 2003-61, sec. 4.03(2)(b)(ii). In the request, petitioner stated that she had no physical or mental health problems either then or when she signed the return. In her answering brief, she claims that, when she signed the return, she was suffering from a host of medical ailments, including severe headaches and mental stress. We give credence to petitioner's contemporaneous statement, in the request. Petitioner has failed to carry her burden of proving poor mental or physical health on the date she signed the return or at the time of the request. This factor is of no account.
7. Weighing the Facts and Circumstances
The only factor weighing in favor of relieving petitioner from liability is her marital status. With respect to the factor of knowledge or reason to know that Mr. Bailey would not pay the reported liability, our findings suggest that petitioner did have reason to know. This factor weighs in favor of her retaining liability. Likewise with respect to economic hardship, since our findings suggest that petitioner would not suffer economic hardship if she were to retain liability. And similarly with respect to the factors of significant benefit and compliance with the tax laws.
Accordingly, after considering and weighing all the factors, we find that it would not be inequitable to hold petitioner liable for the unpaid tax.
III. Conclusion To reflect the foregoing,
An appropriate order of dismissal and decision will be entered.
1
Unless otherwise noted, section references are to the Internal Revenue Code as currently in effect, and Rule references are to the Tax Court Rules of Practice and Procedure.
VICTORIA STENNETT-BAILEY, Petitioner, AND CASMAS BAILEY, Intervenor v. COMMISSIONER OF INTERNAL REVENUE, Respondent .
Case Information: Code Sec(s): 6015
Docket: Docket No. 1934-10.
Date Issued: 08/22/2011
HEADNOTE
XX.
Reference(s): Code Sec. 6015
Syllabus
Official Tax Court Syllabus
Counsel
Victoria Stennett-Bailey, pro se.
Casmas Bailey, pro se.
Marissa J. Savit, for respondent.
MEMORANDUM OPINION
HALPERN, JUDGE: This case arises from a request by petitioner of the Internal Revenue Service (IRS) for equitable relief from joint and several liability for Federal income tax for petitioner's 2006 taxable (calendar) year (2006). The IRS denied the request, and petitioner brought this action protesting that denial. We have jurisdiction to determine the appropriate See sec. 6015(e)(1); 1 relief (if any) available to petitioner. Pullins v. Commissioner, 136 T.C. __, __ (2011) (slip op. at 10). Both the scope and standard of our review are de novo. Pullins v. Commissioner, supra at __ (slip op. at 11). Petitioner bears the burden of proof. See Rule 142(a); Pullins v. Commissioner, supra at __ (slip op. at 11).
Intervenor, petitioner's husband (Mr. Bailey), objects to the relief sought by petitioner, but since he neither executed the stipulation of facts that respondent prepared for his signature, appeared at trial (although he appeared earlier, at calendar call), nor filed a brief in this case, we assume he has declined to prosecute his objection. We shall dismiss this case with respect to him for failure to prosecute. See Rule 123(b); Tipton v. Commissioner, 127 T.C. 214, 218 (2006).
For the reasons that follow, we determine that petitioner is not entitled to equitable relief from joint and several liability for 2006.
Background
Some facts have been stipulated and are so found. The stipulation of facts, with accompanying exhibits, is incorporated herein by this reference.
At the time the petition was filed, petitioner resided in New York State.
In October 2007, petitioner and Mr. Bailey made a joint return of Federal income tax (return) for 2006. They signed the return on October 12, 2007. The return shows total tax of $29,245, a withholding credit of $5,220, a credit for Federal telephone excise tax of $60, an estimated tax penalty of $314, and an amount owed of $24,279 (unpaid tax). No payment accompanied the return.
Petitioner applied to the IRS for equitable relief from joint and several liability for 2006 by submitting to it a Form 8857, Request for Innocent Spouse Relief, dated November 5, 2008 (request). In response to the request, the IRS made a preliminary determination to deny the request on the ground that petitioner had not shown that it would be unfair to hold her responsible for the unpaid tax. The IRS stated: “You did not prove, [sic] that at the time you signed the return, you had reason to believe the tax would be paid. Also, the documentation you provided does not prove economic hardship.” Petitioner disagreed with the IRS' preliminary determination, but, thereafter, the IRS finalized its determination, stating: “The information we have available does not show you meet the requirements for relief. You did not show it would be unfair to hold you responsible.”
During 2006 and throughout the administrative proceeding in this case, petitioner and Mr. Bailey were married.
We conducted a trial in this case. At the conclusion of the trial, we set a schedule for both opening and answering briefs. We instructed petitioner as to the importance of submitting briefs to assist us in considering the evidence in this case since, among other things, the stipulated exhibits comprise hundreds if not more than a thousand pages. We directed her to Rule 151(e), which addresses the form and content of briefs, and we emphasized the importance of complying with the rule. Rule 151(e)(3) provides that an opening brief shall contain proposed findings of fact, in the form of numbered, concise statements of essential facts (”and not a recital of testimony nor a discussion or argument relating to the evidence or the law”) supported by “references to the pages of the transcript or the exhibits or other sources relied upon to support the statement.” While petitioner's opening brief does consist in part of numbered, relatively concise statements of fact, it fails to provide the required references to the trial transcript, the exhibits, or the stipulation. In his answering brief, respondent objects to many of petitioner's proposed findings of fact as not being supported by evidence in the record. Respondent asks us to strike those portions of petitioner's opening brief that do not comply with the Rules. We shall not do so, but to the extent that we cannot easily verify petitioner's proposed findings of fact (aided in part by respondent's answering brief), we disregard them. Moreover, in her answering brief, petitioner fails to comply with the requirement of Rule 151(e) that she identify by number the statements of proposed findings of fact made by respondent in his opening brief to which she objects, setting forth her reasons for objecting. She merely makes statements of general rebuttal to many of respondent's proposed findings; e.g., with respect to respondent's proposed findings relevant to whether she knew or should have known about the 2006 underpayment of tax: “I signed the return with knowledge of the tax liability. However, this does not prove that I knew that the tax liability would not be paid by the [sic] Mr[.] Bailey, who had enough liquid assets to meet his tax obligation.” Accordingly, we conclude that respondent's proposed findings of fact are correct except to the extent that petitioner objects to a particular proposed finding and identifies evidence (or we can identify evidence) supporting See, e.g., Jonson v. Commissioner, 118 T.C. 106, the objection. 108 n.4 (2002), affd. 353 F.3d 1181 [93 AFTR 2d 2004-323] (10th Cir. 2003).
Discussion
I. Introduction As a general rule, spouses making a joint Federal income tax return are jointly and severally liable for all taxes shown on the return or found to be owing. Sec. 6013(d)(3). In certain situations, however, a joint return filer can avoid such joint and several liability by qualifying for relief therefrom under section 6015. There are three types of relief available under section 6015: (1) Full or apportioned relief under , section 6015(b), (2) proportionate tax relief for divorced or separated taxpayers under section 6015(c), and (3) equitable relief under section 6015(f), when relief is unavailable under either section 6015(b) or (c). Petitioner's only claim is that she is entitled to equitable relief under section 6015(f).
Section 6015(f) provides:
SEC. 6015(f). Equitable Relief.—Under procedures prescribed by the Secretary, if—
(1) taking into account all the facts and circumstances, it is inequitable to hold the individual liable for any unpaid tax or any deficiency (or any portion of either); and
(2) relief is not available to such individual under subsection (b) or (c), the Secretary may relieve such individual of such liability.
The parties agree that petitioner is eligible to be considered for equitable relief under section 6015(f) because relief is not available to petitioner under section 6015(b) or (c). They disagree, however, as to whether she has shown her entitlement to that relief.
II. Revenue Procedure (Rev. Proc.) 2003-61
A. Introduction
In accord with the statutory provision that relief is to be granted under section 6015(f) following “procedures prescribed by the Secretary,” the Commissioner has issued revenue procedures to guide its employees in determining whether a taxpayer is entitled to relief from joint and several liability. See Rev. Proc. 2003- 61, 2003-2 C.B. 296, modifying and superseding Rev. Proc. 2000- 15, 2000-1 C.B. 447. Rev. Proc. 2003-61, supra, lists the factors that IRS employees should consider, and the Court consults those same factors when reviewing the IRS' denial of relief. Pullins v. Commissioner, supra at __ (slip op. at 11).
Rev. Proc. 2003-61, supra, provides a three-step analysis for IRS employees to follow in evaluating requests for relief: Rev. Proc. 2003-61, sec. 4.01, 2003-2 C.B. at 297 (section 4.01), lists seven threshold conditions that must be met before the IRS will grant any relief; Rev. Proc. 2003-61, sec. 4.02, 2003-2 C.B. at 298 (section 4.02), lists circumstances in which the IRS will ordinarily grant relief as to liabilities that were reported on a return (the unpaid tax at issue in this case); and Rev. Proc. 2003-61, sec. 4.03, 2003-2 C.B. at 298 (section 4.03), sets out eight nonexclusive factors that the IRS will consider in determining whether equitable relief should be granted. See Rev. Proc. 2003-61, secs. 4.01-4.03, 2003-2 C.B. at 297-298. In addition, Rev. Proc. 2003-61, sec. 4.03(2), 2003-2 C.B. at 298, states: “No single factor will be determinative of whether equitable relief will or will not be granted in any particular case. Rather, the Service will consider and weigh all relevant factors, regardless of whether the factor is listed in *** section 4.03.”
B. Section 4.01: Threshold Conditions Respondent concedes that petitioner meets the threshold conditions set forth in section 4.01.
C. Section 4.02: Circumstances Ordinarily Allowing Relief
1. Introduction
Section 4.02 provides three conditions that, if satisfied, will ordinarily qualify a requesting spouse for relief by the IRS from liability for an underpayment of a properly reported liability. The conditions are:
(a) On the date of the request for relief, the requesting spouse is no longer married to, or is legally separated from, the nonrequesting spouse, or has not been a member of the same household as the nonrequesting spouse at any time during the 12-month period ending on the date of the request for relief.
(b) On the date the requesting spouse signed the joint return, the requesting spouse had no knowledge or reason to know that the nonrequesting spouse would not pay the income tax liability. The requesting spouse must establish that it was reasonable for the requesting spouse to believe that the nonrequesting spouse would pay the reported income tax liability. ***
(c) The requesting spouse will suffer economic hardship if the Service does not grant relief. *** Rev. Proc. 2003-61, sec. 4.02(1), 2003-2 C.B. at 298.
2. Divorced, Separated, or Living Apart Petitioner concedes that she is still married to Mr. Bailey, and she makes no argument that they are legally separated. She testified that Mr. Bailey moved out of their marital residence (which she owns) in November 2006. Respondent concedes that when the request was made Mr. Bailey had been absent from that residence for more than 12 months. Nevertheless, respondent argues, that absence was temporary and, thus, does not qualify as an absence for determining whether petitioner and Mr. Bailey were not members of the same household. See sec. 1.6015-3(b)(3), Income Tax Regs.; Rev. Proc. 2003-61, sec. 4.03(2)(a)(i). Indeed, petitioner testified at trial: "[U]ntil today I always thought Mr. Bailey was going to move back in the home. He was picking up groceries. He was doing things. He said he needed time away from the home, and I believed him.” On brief, petitioner contradicts her testimony as to the duration of her belief, claiming, without any support from the record, that her belief that he would return to the marital home “was brief and fleeting.” Nevertheless, given Mr. Bailey's approximately 2-year absence from their marital home when petitioner made the request in November 2008, we think it not unreasonable to value experience over hope and find that it was reasonable then to believe that he would not return. We conclude that his absence was, thus, not temporary, and he had not been a member of her household for at least 12 months when she made the request. Petitioner satisfies the first condition.
3. Knowledge or Reason To Know
Petitioner and Mr. Bailey signed the return on October 12, 2007, and she concedes that she signed it with knowledge of the resulting tax liability. She claims that that does not prove that she knew or had reason to know that Mr. Bailey would not pay the reported tax liability. That is so. But respondent proposes that we find as facts that, on October 12, 2007, (1) Mr. Bailey did not have an individually owned bank account, (2) petitioner and Mr. Bailey jointly owned both an HSBC checking and an HSBC money market account, both of which, on that date, were empty or nearly so, and (3) when she signed the return, she knew that Mr. Bailey had no liquid assets to draw upon to pay the reported liability. Because petitioner has not contradicted those proposed findings, we find accordingly. While on October 12, 2007, petitioner may not have known that Mr. Bailey would not pay the reported liability, she has failed to prove that she had no reason to know that Mr. Bailey would not pay that liability. Indeed, the findings we have just made suggest the contrary. Petitioner fails to satisfy the second condition.
4. Economic Hardship
Economic hardship is defined as an inability to meet reasonable basic living expenses. Sec. 301.6343-1(b)(4), Proced. & Admin. Regs. In her opening brief, petitioner claims, with no citation of the record, “that she will suffer extraordinary financial hardship within the meaning of the *** [Internal Revenue Code] if she is required to pay this tax.” She echoes that claim in her answering brief, supported by exhibits attached to that brief, which we detached and returned to her as ex parte statements prohibited in a brief. See Rule 143(c). Respondent emphasizes what petitioner failed to show to establish economic hardship; to wit, she did not introduce into evidence account statements showing the current balances in her bank accounts, evidence of the current values of her equities in the various properties she concedes she owns, or evidence of her current income and personal expenses. Respondent looks at the income and expenses information petitioner reported in the request, which shows equal monthly income and expenses of $7,615, and he claims that, pursuant to his collection standards, the allowable living expenses for a four-person household are approximately $5,725 and that petitioner's stated income exceeds the allowable amount. He also points out that petitioner admits that she drives a Lexus automobile, claims school expenses of $2,250 a month for sending her children to private school, and owns a vacation home in the Poconos (which petitioner testified had no value). The parties have stipulated that petitioner currently owns and operates at least three companies involved in the rental real estate business and, directly or through those companies, owns at least seven properties. Again, petitioner has failed to carry her burden of proving that she will suffer economic hardship if we do not grant her relief, and respondent's arguments and the stipulations suggest the contrary. Petitioner fails to satisfy the third condition.
5. Conclusion
Having satisfied only the first of the three conditions set forth in section 4.02(1), petitioner is not entitled to relief under the circumstantial test set forth in section 4.02.
D. Section 4.03: Mitigating Factors
1. Introduction
Section 4.03 applies to requesting spouses who filed a joint return, request relief under section 6015(f), and satisfy the threshold conditions of section 4.01, but do not qualify for relief under section 4.02. It lists eight nonexclusive factors to be considered in determining whether, taking into account all the facts and circumstances, it is equitable to grant the requesting spouse full or partial equitable relief under section 6015(f). The eight factors are: (1) Marital status, (2) knowledge or reason to know, (3) economic hardship, (4) nonrequesting spouse's legal obligation to pay the tax pursuant to a divorce decree or agreement, (5) significant benefit, (6) good-faith effort to comply with tax laws, (7) spousal abuse, and (8) mental or physical health. The last two factors, if present, will weigh in favor of equitable relief, but, if not present, will not weigh against equitable relief. We have already addressed the first three factors, and the first weighs in petitioner's favor, while the second two do not.
2. Legal Obligation
This factor is neutral since petitioner and Mr. Bailey are not divorced.
3. Significant Benefit
The test here is whether petitioner received significant benefit (beyond normal support) from the unpaid income tax liability. See Rev. Proc. 2003-61, sec. 4.03(2)(a)(v), 2003-2 C.B. at 299. The unpaid tax is in substantial part due to Mr. Bailey's gain on his sale of real property located on Sheffield Avenue in Brooklyn, New York. Mr. Bailey deposited $249,838 of his proceeds from the sale in petitioner and Mr. Bailey's jointly owned HSBC money market account, which had a $52 balance before the deposit. On March 21, 2007, petitioner withdrew $80,000 from that account, virtually emptying the account, and deposited that sum into her individual savings account. At least $49,948 of the $80,000 she withdrew came from the proceeds deposited by Mr. Bailey. Petitioner used the withdrawn funds to pay the mortgage on her residence, to pay expenses of her Poconos vacation home, to pay her children's private school tuition, and to pay for food, utilities, and living expenses. Respondent suggests that petitioner's withdrawal prevented Mr. Bailey from paying the unpaid tax from the sale proceeds he had received and deposited in their joint account, deciding instead to use a portion of those proceeds for her own benefit. There is no evidence that she reserved anything for taxes, although she knew her withdrawal emptied the account and she had no assurance that Mr. Bailey had reserved anything for taxes. Petitioner has failed to carry her burden of showing that she did not receive significant benefit (beyond normal support) from the unpaid tax. Indeed, the evidence suggests the contrary.
4. Compliance With the Tax Laws
The test here is whether petitioner has made a good-faith effort to comply with the income tax laws following 2006, the year here in issue. See Rev. Proc. 2003-61, sec. 4.03(2)(a)(vi). Petitioner does not address this factor on brief beyond claiming that she is in full compliance. The parties have stipulated that petitioner did not file her 2008 Federal income tax return until July 19, 2010. There is no evidence that petitioner obtained an extension of time to file that return. Petitioner has failed to carry her burden of proving a good-faith effort to comply with the tax laws. Indeed, the evidence suggests the contrary.
5. Spousal Abuse
Petitioner makes no claim of spousal abuse, and this factor is of no account.
6. Mental or Physical Health
The test here is whether petitioner was in poor mental or physical health on the date she signed the return or at the time of the request. See Rev. Proc. 2003-61, sec. 4.03(2)(b)(ii). In the request, petitioner stated that she had no physical or mental health problems either then or when she signed the return. In her answering brief, she claims that, when she signed the return, she was suffering from a host of medical ailments, including severe headaches and mental stress. We give credence to petitioner's contemporaneous statement, in the request. Petitioner has failed to carry her burden of proving poor mental or physical health on the date she signed the return or at the time of the request. This factor is of no account.
7. Weighing the Facts and Circumstances
The only factor weighing in favor of relieving petitioner from liability is her marital status. With respect to the factor of knowledge or reason to know that Mr. Bailey would not pay the reported liability, our findings suggest that petitioner did have reason to know. This factor weighs in favor of her retaining liability. Likewise with respect to economic hardship, since our findings suggest that petitioner would not suffer economic hardship if she were to retain liability. And similarly with respect to the factors of significant benefit and compliance with the tax laws.
Accordingly, after considering and weighing all the factors, we find that it would not be inequitable to hold petitioner liable for the unpaid tax.
III. Conclusion To reflect the foregoing,
An appropriate order of dismissal and decision will be entered.
1
Unless otherwise noted, section references are to the Internal Revenue Code as currently in effect, and Rule references are to the Tax Court Rules of Practice and Procedure.
Wednesday, August 24, 2011
Willfullness
U.S. v. GANIAS, Cite as 108 AFTR 2d 2011-XXXX, 08/12/2011
UNITED STATES of America, Plaintiff v. Stavros GANIAS, Defendant.
Case Information:
Code Sec(s):
Court Name: United States District Court, D. Connecticut,
Docket No.: No. 3:08CR224(EBB),
Date Decided: 08/12/2011.
Disposition:
HEADNOTE
.
Reference(s):
OPINION
Robert A. Lacobelle, Byrne & Lacobelle, Trumbull, CT, for Defendant.
United States District Court, D. Connecticut,
RULING ON DEFENDANT'S MOTION FOR JUDGMENT OF ACQUITTAL
Judge: ELLEN BREE BURNS, Senior District Judge.
Following a sixteen day trial, the jury returned a verdict finding the defendant, Stavros Ganias (“Ganias”), guilty of counts four and five of the indictment, which charged him with evading personal income taxes due and owing to the United States Government for the years 2002 and 2003. Pending before the Court is Ganias' motion for a judgment of acquittal as to count five. 1. For the foregoing reasons, Ganias' motion is DENIED.
I. STANDARD
In the present case, Ganias challenges his conviction of tax evasion in the year 2003. The standard of review for a motion for acquittal is well settled. Rule 29 of the Federal Rules of Criminal Procedure provides that “the court on the defendant's motion must enter a judgment of acquittal of any offense for which the evidence is insufficient to sustain a conviction.” The Court shall grant such a motion “if it concludes that no rational trier of fact could have found the defendant guilty beyond a reasonable doubt.” United States v. Jackson, 335 F.3d 170, 180 (2d Cir.2003). Thus, a defendant making such a motion bears a “heavy burden.”United States v. Abu–Jihaad , 630 F.3d 102, 135 (2d Cir.2010) (quoting United States v. Desena, 287 F.3d 170, 177 (2d Cir.2002)). A judgment of acquittal is only appropriate “if the evidence that the defendant committed the crime is non-existent or so meager that no reasonable jury could find guilt beyond a reasonable doubt.” United States v. Guadagna, 183 F.3d 122, 130 (2d Cir.1999) (citation omitted; internal quotation marks omitted). Accordingly, the court must give “full play to the right of the jury to determine credibility, weigh the evidence, and draw justifiable inferences of fact.” United States v. Mariani, 725 F.2d 862, 865 (2d Cir.1984) (quoting Curley v. United States, 160 F.2d 229, 232–33 (D.C.Cir.), cert. denied, 331 U.S. 837 (1947)). All inferences must be resolved in favor of the prosecution, and the evidence must be viewed in a similarly favorable light. Id.
II. DISCUSSION
The indictment charged Ganias with tax evasion. 2. Specifically, the indictment charged that, during calendar years 2002 (count four) and 2003 (count five), Ganias willfully attempted to evade and defeat a large part of the income tax due and owing by him and his spouse by filing with the Internal Revenue Service (“IRS”) a false and fraudulent joint U.S. Individual Income Tax Return, Form 1040, in violation of 26 U.S.C. § 7201. The jury returned a verdict of guilty on both counts four and five of the indictment.
In order for the government to convict a defendant of willfully attempting to evade or defeat any tax, the Government must prove (1) willfulness, (2) the existence of a tax deficiency and (3) an affirmative act constituting an evasion or attempted evasion of the tax. Sansone v. United States, 380 U.S. 343, 351 [15 AFTR 2d 611] (1965).
Prior to the Court's jury charge, Ganias requested a jury instruction on the “good faith” defense to tax evasion. The Government did not object and the Court so instructed the jury.
The good faith defense is predicated upon the requirement that, in order to prove willfulness, the Government must establish “that the law imposed a duty on the defendant, that the defendant knew of this duty, and that he voluntarily and intentionally violated that duty.” Cheek v. United States, 498 U.S. 192, 201 [67 AFTR 2d 91-344] (1991). Thus, when a defendant who is prosecuted for tax evasion claims he was ignorant of his duty to pay the tax that was allegedly evaded, the government has the burden of proving otherwise. Id., at 202 (proving willfulness requires negating a defendant's claim that he had a good faith belief that he was not violating any provisions of the tax laws). Put another way, when a defendant asserts a good faith belief that he was in compliance with the tax laws, the government must prove beyond a reasonable doubt that he did not hold such a belief.
In his motion for a judgment of acquittal, Ganias argues that the government did not prove willfulness, specifically because the Government did not prove beyond a reasonable doubt that Ganias was aware that he underreported his income and tax liability in 2003. As such, Ganias argues that the government failed to negate his good faith defense. The issue, therefore, is whether the evidence that Ganias was aware that he underreported his income and tax liability in 2003 is “nonexistent or so meager that no rational jury” could have so concluded.
Viewing the evidence in a light most favorable to the government, the jury could have found the following: Ganias has owned and operated his own tax preparation business since 1985. In this capacity he provided tax preparation and bookkeeping services to many small businesses in Connecticut. Prior to entering private practice, Ganias was a decorated and oft-promoted Revenue Agent for the IRS, a position which he held for fourteen years. As an IRS agent, he was responsible for auditing a number of large corporations as well as providing assistance to individual tax filers. As such, at the time of the charged conduct, Ganias possessed extensive experience in bookkeeping and tax preparation. He had specialized knowledge of the United States' system of taxation and he was particularly cognizant of the responsibility of citizens to accurately report income to the IRS and pay taxes upon such income. Despite Ganias' background, he grossly underreported his income and tax liability not only in 2002 and 2003, the charged years, but also in 1999, 2000 and 2001.
Ganias testified in his own defense and represented that, two days after Army CID executed a search warrant at his office and made mirror images of his computer hard drives, he made corrective entries in his bookkeeping software, Quickbooks. Previously, Ganias had entered several payments from a major client of his, Industrial Property Management, as “owner's contributions.” Payments entered as owner's contributions would not have appeared in a Quickbooks profit and loss statement as income. Ganias claims that he made the corrections in order to reclassify the payments in such a way that they would be included in his profit and loss statement. He alleges that, despite the corrections, when he used Quickbooks to determine his income and prepare his 2003 tax return, the payments still did not show up on his profit and loss statement. Ganias claims that this is because, even in making the corrections, he did not input the payments properly. Ganias asserts that he innocently relied upon the incorrect profit and loss statement to prepare and pay his taxes, which caused him to underreport his income and tax liability. As such, Ganias claims that he is entitled to a judgment of acquittal.
Ganias' claim that he innocently relied on an incorrect profit and loss statement is belied by the fact that, at the time of his charged conduct, he was hardly a neophyte with regard to the use of Quickbooks, bookkeeping principles generally, or the tax laws of the United States and the obligations of its citizens thereunder. There was certainly a rational basis for the jury not to credit Ganias' assertion that he believed his profit and loss statement accurately reflected his income. Moreover, the government also introduced evidence demonstrating that Ganias underreported his income and tax liability not only in 2003, but also in 1999, 2000, 2001 and 2002. The government also introduced evidence demonstrating that Ganias had previously improperly recorded payments in Quickbooks in such a way that the payments did not show up as income. From this, the jury could reasonably conclude that Ganias' failure to report a significant amount of his income in 2003 was not a mistake but, rather, part of a larger pattern of willful evasion. United States v. Klausner, 80 F.3d 55, 63 [77 AFTR 2d 96-1540] (2d Cir.1996) (pattern of understating or failing to report income may be considered evidence of willfulness). In sum, the evidence negating Ganias' good faith defense was neither “nonexistent” nor “so meager that no reasonable jury could find guilt beyond a reasonable doubt.”
III. CONCLUSION
Viewing the evidence in its entirety, the Court concludes that a rational trier of fact could have found Ganias guilty beyond a reasonable doubt. For the aforementioned reasons, Ganias' motion for a judgment of acquittal is DENIED. 3.
SO ORDERED.
1.
At the end of the government's case-in-chief on March 24, 2011, Ganias, through his counsel, made an oral motion for acquittal as to both counts four and five. Pursuant to Fed.R.Crim.P. 29(c), the Court reserved decision on the motion. Ganias has now filed a written motion for acquittal challenging only the jury's verdict as to count five. Because Ganias has not briefed his challenge to count four, the Court considers this claim abandoned.
2.
Ganias was indicted together with another defendant, James McCarthy (“McCarthy”). Ganias is also charged in count one of the indictment, wherein he and McCarthy are accused of conspiracy to obstruct the IRS in the collection of federal income taxes. The Court, however, granted Ganias' motion to sever count one from counts four and five for the purposes of trial. Thus, Ganias was only tried on counts four and five.
3.
In his motion, Ganias states: “It is not to go unnoticed that at least one member of the jury had asked prior to jury deliberation if the jury was restricted in the amount of time it could decide to return of verdict in this matter. It was evident that sentiment of the jury was to come to a hasty and quick verdict.” This statement is apparently in reference to an incident that occurred after the close of evidence and final arguments, but prior to jury instructions, in which a juror asked a court staff member whether it would be wrong for the jury to return a verdict “right away.”
Ganias does not appear to raise this issue as a separate ground on which his motion for a judgment of acquittal, or any other form of relief for that matter, should be granted. Nonetheless, to the extent that Ganias seeks to imply that this incident ought to cast doubt upon the propriety of the jury's deliberations and verdict, it bears noting the Court made the attorneys for both parties aware of this issue as soon as the juror's statement came to the Court's attention. At the time, defense counsel stated that the juror's statement made him concerned that the jurors had been discussing the evidence prior to being instructed on the law. Because of the concerns voiced by defense counsel, the Court ordered the public cleared from the courtroom, placed the juror who made the statement on the witness stand and, per the agreement of both parties, made an inquiry into the nature of the juror's comment. The juror represented that no improper discussions had taken place amongst the jury panel and that, so far as she knew, the jury was not inclined to come back with a verdict within any particular time frame. The Court found the juror's representations credible and, as such, perceived no obstacle to moving forward. Defense counsel indicated his satisfaction with the questions the Court posed to the juror, as well as the juror's responses, and made no objection to moving forward.
UNITED STATES of America, Plaintiff v. Stavros GANIAS, Defendant.
Case Information:
Code Sec(s):
Court Name: United States District Court, D. Connecticut,
Docket No.: No. 3:08CR224(EBB),
Date Decided: 08/12/2011.
Disposition:
HEADNOTE
.
Reference(s):
OPINION
Robert A. Lacobelle, Byrne & Lacobelle, Trumbull, CT, for Defendant.
United States District Court, D. Connecticut,
RULING ON DEFENDANT'S MOTION FOR JUDGMENT OF ACQUITTAL
Judge: ELLEN BREE BURNS, Senior District Judge.
Following a sixteen day trial, the jury returned a verdict finding the defendant, Stavros Ganias (“Ganias”), guilty of counts four and five of the indictment, which charged him with evading personal income taxes due and owing to the United States Government for the years 2002 and 2003. Pending before the Court is Ganias' motion for a judgment of acquittal as to count five. 1. For the foregoing reasons, Ganias' motion is DENIED.
I. STANDARD
In the present case, Ganias challenges his conviction of tax evasion in the year 2003. The standard of review for a motion for acquittal is well settled. Rule 29 of the Federal Rules of Criminal Procedure provides that “the court on the defendant's motion must enter a judgment of acquittal of any offense for which the evidence is insufficient to sustain a conviction.” The Court shall grant such a motion “if it concludes that no rational trier of fact could have found the defendant guilty beyond a reasonable doubt.” United States v. Jackson, 335 F.3d 170, 180 (2d Cir.2003). Thus, a defendant making such a motion bears a “heavy burden.”United States v. Abu–Jihaad , 630 F.3d 102, 135 (2d Cir.2010) (quoting United States v. Desena, 287 F.3d 170, 177 (2d Cir.2002)). A judgment of acquittal is only appropriate “if the evidence that the defendant committed the crime is non-existent or so meager that no reasonable jury could find guilt beyond a reasonable doubt.” United States v. Guadagna, 183 F.3d 122, 130 (2d Cir.1999) (citation omitted; internal quotation marks omitted). Accordingly, the court must give “full play to the right of the jury to determine credibility, weigh the evidence, and draw justifiable inferences of fact.” United States v. Mariani, 725 F.2d 862, 865 (2d Cir.1984) (quoting Curley v. United States, 160 F.2d 229, 232–33 (D.C.Cir.), cert. denied, 331 U.S. 837 (1947)). All inferences must be resolved in favor of the prosecution, and the evidence must be viewed in a similarly favorable light. Id.
II. DISCUSSION
The indictment charged Ganias with tax evasion. 2. Specifically, the indictment charged that, during calendar years 2002 (count four) and 2003 (count five), Ganias willfully attempted to evade and defeat a large part of the income tax due and owing by him and his spouse by filing with the Internal Revenue Service (“IRS”) a false and fraudulent joint U.S. Individual Income Tax Return, Form 1040, in violation of 26 U.S.C. § 7201. The jury returned a verdict of guilty on both counts four and five of the indictment.
In order for the government to convict a defendant of willfully attempting to evade or defeat any tax, the Government must prove (1) willfulness, (2) the existence of a tax deficiency and (3) an affirmative act constituting an evasion or attempted evasion of the tax. Sansone v. United States, 380 U.S. 343, 351 [15 AFTR 2d 611] (1965).
Prior to the Court's jury charge, Ganias requested a jury instruction on the “good faith” defense to tax evasion. The Government did not object and the Court so instructed the jury.
The good faith defense is predicated upon the requirement that, in order to prove willfulness, the Government must establish “that the law imposed a duty on the defendant, that the defendant knew of this duty, and that he voluntarily and intentionally violated that duty.” Cheek v. United States, 498 U.S. 192, 201 [67 AFTR 2d 91-344] (1991). Thus, when a defendant who is prosecuted for tax evasion claims he was ignorant of his duty to pay the tax that was allegedly evaded, the government has the burden of proving otherwise. Id., at 202 (proving willfulness requires negating a defendant's claim that he had a good faith belief that he was not violating any provisions of the tax laws). Put another way, when a defendant asserts a good faith belief that he was in compliance with the tax laws, the government must prove beyond a reasonable doubt that he did not hold such a belief.
In his motion for a judgment of acquittal, Ganias argues that the government did not prove willfulness, specifically because the Government did not prove beyond a reasonable doubt that Ganias was aware that he underreported his income and tax liability in 2003. As such, Ganias argues that the government failed to negate his good faith defense. The issue, therefore, is whether the evidence that Ganias was aware that he underreported his income and tax liability in 2003 is “nonexistent or so meager that no rational jury” could have so concluded.
Viewing the evidence in a light most favorable to the government, the jury could have found the following: Ganias has owned and operated his own tax preparation business since 1985. In this capacity he provided tax preparation and bookkeeping services to many small businesses in Connecticut. Prior to entering private practice, Ganias was a decorated and oft-promoted Revenue Agent for the IRS, a position which he held for fourteen years. As an IRS agent, he was responsible for auditing a number of large corporations as well as providing assistance to individual tax filers. As such, at the time of the charged conduct, Ganias possessed extensive experience in bookkeeping and tax preparation. He had specialized knowledge of the United States' system of taxation and he was particularly cognizant of the responsibility of citizens to accurately report income to the IRS and pay taxes upon such income. Despite Ganias' background, he grossly underreported his income and tax liability not only in 2002 and 2003, the charged years, but also in 1999, 2000 and 2001.
Ganias testified in his own defense and represented that, two days after Army CID executed a search warrant at his office and made mirror images of his computer hard drives, he made corrective entries in his bookkeeping software, Quickbooks. Previously, Ganias had entered several payments from a major client of his, Industrial Property Management, as “owner's contributions.” Payments entered as owner's contributions would not have appeared in a Quickbooks profit and loss statement as income. Ganias claims that he made the corrections in order to reclassify the payments in such a way that they would be included in his profit and loss statement. He alleges that, despite the corrections, when he used Quickbooks to determine his income and prepare his 2003 tax return, the payments still did not show up on his profit and loss statement. Ganias claims that this is because, even in making the corrections, he did not input the payments properly. Ganias asserts that he innocently relied upon the incorrect profit and loss statement to prepare and pay his taxes, which caused him to underreport his income and tax liability. As such, Ganias claims that he is entitled to a judgment of acquittal.
Ganias' claim that he innocently relied on an incorrect profit and loss statement is belied by the fact that, at the time of his charged conduct, he was hardly a neophyte with regard to the use of Quickbooks, bookkeeping principles generally, or the tax laws of the United States and the obligations of its citizens thereunder. There was certainly a rational basis for the jury not to credit Ganias' assertion that he believed his profit and loss statement accurately reflected his income. Moreover, the government also introduced evidence demonstrating that Ganias underreported his income and tax liability not only in 2003, but also in 1999, 2000, 2001 and 2002. The government also introduced evidence demonstrating that Ganias had previously improperly recorded payments in Quickbooks in such a way that the payments did not show up as income. From this, the jury could reasonably conclude that Ganias' failure to report a significant amount of his income in 2003 was not a mistake but, rather, part of a larger pattern of willful evasion. United States v. Klausner, 80 F.3d 55, 63 [77 AFTR 2d 96-1540] (2d Cir.1996) (pattern of understating or failing to report income may be considered evidence of willfulness). In sum, the evidence negating Ganias' good faith defense was neither “nonexistent” nor “so meager that no reasonable jury could find guilt beyond a reasonable doubt.”
III. CONCLUSION
Viewing the evidence in its entirety, the Court concludes that a rational trier of fact could have found Ganias guilty beyond a reasonable doubt. For the aforementioned reasons, Ganias' motion for a judgment of acquittal is DENIED. 3.
SO ORDERED.
1.
At the end of the government's case-in-chief on March 24, 2011, Ganias, through his counsel, made an oral motion for acquittal as to both counts four and five. Pursuant to Fed.R.Crim.P. 29(c), the Court reserved decision on the motion. Ganias has now filed a written motion for acquittal challenging only the jury's verdict as to count five. Because Ganias has not briefed his challenge to count four, the Court considers this claim abandoned.
2.
Ganias was indicted together with another defendant, James McCarthy (“McCarthy”). Ganias is also charged in count one of the indictment, wherein he and McCarthy are accused of conspiracy to obstruct the IRS in the collection of federal income taxes. The Court, however, granted Ganias' motion to sever count one from counts four and five for the purposes of trial. Thus, Ganias was only tried on counts four and five.
3.
In his motion, Ganias states: “It is not to go unnoticed that at least one member of the jury had asked prior to jury deliberation if the jury was restricted in the amount of time it could decide to return of verdict in this matter. It was evident that sentiment of the jury was to come to a hasty and quick verdict.” This statement is apparently in reference to an incident that occurred after the close of evidence and final arguments, but prior to jury instructions, in which a juror asked a court staff member whether it would be wrong for the jury to return a verdict “right away.”
Ganias does not appear to raise this issue as a separate ground on which his motion for a judgment of acquittal, or any other form of relief for that matter, should be granted. Nonetheless, to the extent that Ganias seeks to imply that this incident ought to cast doubt upon the propriety of the jury's deliberations and verdict, it bears noting the Court made the attorneys for both parties aware of this issue as soon as the juror's statement came to the Court's attention. At the time, defense counsel stated that the juror's statement made him concerned that the jurors had been discussing the evidence prior to being instructed on the law. Because of the concerns voiced by defense counsel, the Court ordered the public cleared from the courtroom, placed the juror who made the statement on the witness stand and, per the agreement of both parties, made an inquiry into the nature of the juror's comment. The juror represented that no improper discussions had taken place amongst the jury panel and that, so far as she knew, the jury was not inclined to come back with a verdict within any particular time frame. The Court found the juror's representations credible and, as such, perceived no obstacle to moving forward. Defense counsel indicated his satisfaction with the questions the Court posed to the juror, as well as the juror's responses, and made no objection to moving forward.
Home Based Business Fraud
U.S. v. COOPER, Cite as 108 AFTR 2d 2011-XXXX, 08/15/2011
UNITED STATES OF AMERICA, Plaintiff-Appellee, v. MICHAEL CRAIG COOPER, Defendant-Appellant.
Case Information:
Code Sec(s):
Court Name: UNITED STATES COURT OF APPEALS TENTH CIRCUIT,
Docket No.: No. 10-3105,
Date Decided: 08/15/2011.
Disposition:
HEADNOTE
.
Reference(s):
OPINION
John Jenab of Jenab & McCauley, LLP, Olathe, Kansas, for Defendant-Appellant.
Scott C. Rask, Assistant United States Attorney (Barry R. Grissom, United States Attorney, with him on the brief), Kansas City, Kansas, for Plaintiff-Appellee.
UNITED STATES COURT OF APPEALS TENTH CIRCUIT,
Appeal from the United States District Court for the District of Kansas (D.C. No. 2:04-CR-20105-CM-JPO-1)
Before HOLMES and BALDOCK, Circuit Judges, and JOHNSON, District Judge. *
Judge: HOLMES, Circuit Judge.
PUBLISH
INTRODUCTION
Defendant-Appellant Michael Craig Cooper was convicted by jury of one count of conspiracy to defraud, multiple counts of mail and wire fraud, one count of conspiracy to commit money laundering, two counts of money laundering, and multiple counts of engaging in monetary transactions in property derived from unlawful activity. During the proceedings below, Mr. Cooper filed several motions with the district court, including motions for a judgment of acquittal, a post-verdict motion for a new trial, and a motion to suppress evidence under the Fourth Amendment. The district court denied them all. On appeal, Mr. Cooper challenges the district court's denial of his motions for a judgment of acquittal, his motion for a new trial, and his motion to suppress. Exercising jurisdiction under 28 U.S.C. § 1291, we affirm.
FACTUAL BACKGROUND
Mr. Cooper was the founder, president, and chief executive officer of Renaissance, The Tax People, Inc. (“Renaissance”), which he founded in 1995. Beginning in 1997, Renaissance developed, marketed, and sold tax materials aimed at home-based business owners. More specifically, Renaissance sold a tax package called the Tax Relief System (“TRS”), which “included a written manual and set of accompanying audiotapes setting forth the general guidelines and rules applicable to the wide array of tax deductions available to owners of home-based businesses.” Aplt. Opening Br. at 7;see also id. at 4 (stating that the TRS “consisted of a plastic clamshell containing a booklet and audiotapes summarizing tax deductions available to owners of a home-based business”). 1 The TRS sold for $300.
Renaissance also sold a bundle of services called the Platinum Tax Advantage (“PTA”), which purported to provide Renaissance users with unlimited tax advice and unlimited representation in the event of a tax audit. The tax advice and representation were provided by “tax professionals affiliated with Renaissance.” Id. at 4. The PTA was provided for a monthly fee of $100.
Renaissance operated through a network of independent sales representatives called Independent Marketing Associates (“IMAs”). The IMAs both sold Renaissance products and recruited new IMAs. IMAs earned commissions on both their own sales “and on sales by the downline of [IMAs] generated through their recruitment efforts.” Id. at 6. However, IMAs were “required ... to pay [Renaissance] $100 per month to receive commissions and bonuses based on recruitment of new IMAs,” R., Vol. 1, at 60 (Indictment, filed Aug. 13, 2004)—that is, IMAs had to “pay to play,” Aplee. Br. at 36. In addition, “[IMAs] who sold the Tax Relief System as a home-based business were then able to utilize the tax deductions outlined in the system.” Aplt. Opening Br. at 4. Essentially, the Renaissance network was what is known as a “pyramid scheme[].” R., Vol. 1, at 52.
Renaissance also launched the Affiliated Tax Professional Network (“ATPN”), a group of tax professionals specializing in home-based businesses who served as a resource for Renaissance customers and IMAs and offered discounted tax-preparation services to Renaissance members. “[T]o join the ATPN, a tax professional was required to ... submit a written endorsement of the Tax Relief System, pass a written exam ..., agree to provide tax services at a discounted rate to Renaissance members, and become an IMA.” Aplt. Opening Br. at 16 (citations omitted). According to Mr. Cooper, “[t]he idea behind the ATPN ... was to increase the professionalism of the company ... by putting together a group of knowledgeable and experienced tax practitioners who understood the tax laws as they relate to home[-]based business.” Id. at 17. By 2002, “Renaissance had in its possession over 2,000 written letters of endorsement from tax professionals all over the country.” Id.
Renaissance also developed a W-4 Exemption Increase Estimator tool (“W-4 Estimator”), which was used “to adjust W-4 withholdings to reflect anticipated losses when one starts a home business.” Id. at 24–25. The estimator was a “work sheet” that was “used as a tool by [IMAs] to help people adjust their [W-4s] for their newfound business deductions.” R., Vol. 3, at 373 (Trial Tr., dated Feb. 1, 2008). The tool served to help Renaissance IMAs to improperly “increase the number of exemptions” that could be claimed so that their “take home pay w[ould] increase.” Id. at 373–74. In other words, through the W-4 Estimator, Renaissance improperly “[e]mphasized the conversion of personal expenses into deductible business expenses,” R., Vol. 1, at 59, which decreased IMAs' tax liability.
Through the TRS, PTA, ATPN, and W-4 Estimator, Renaissance purported “to provide tax advice [and services] that would help individuals with home-based businesses.” Aplee. Br. at 9. However, as the company grew, it “expanded into a scheme to enable anyone associated with Renaissance [e.g., IMAs] to avoid paying taxes on their W-2 income through the use of the “W-4 Exemption Increase Estimator” and the fraudulent claim of tax deductions.” Id. Mr. Cooper's co-conspirators testified that they prepared false or fraudulent tax returns for Renaissance customers and IMAs by “ignor[ing] the tax code's requirement that only “ordinary and necessary” expenses may be included as deductions.” Id. These tax returns “overstated IMAs' personal expenses as business deductions,” and “contained excessive amounts of “expenses” with essentially no income.” Id. at 9–10. Personal expenses including vacations, ““wages”/allowance paid to children,” commuting miles, and “unreasonable percentage use of the home for business purposes” were improperly and illegally deducted as business expenses. See id. at 9–12. Several of Mr. Cooper's coconspirators also testified that the preparation of false or fraudulent tax returns and the creation of promotional tools and materials that contained false or erroneous tax advice—all of which were “consistent with the fraudulent tax advice espoused by [Mr. Cooper] and ... Renaissance,” id. at 9—were carried out despite the fact that many Renaissance affiliates had brought their concerns regarding this false advice and fraudulent activity to Mr. Cooper's attention.
Despite the red flags, the business continued to grow and accumulate more IMAs. By October 2000, Renaissance had recruited approximately 55,000 IMAs and was bringing in approximately $10 million a month.
On October 11, 2000, law enforcement agents of the Internal Revenue Service (“IRS”) and the U.S. Postal Inspection Service executed search warrants on Renaissance's warehouse, headquarters, accounting center, call and mailing operations center, and on Mr. Cooper's safe deposit box, as well as seizure warrants on various bank and investment accounts associated with Mr. Cooper and Renaissance. As the investigation progressed over the next two months, several additional seizure warrants were authorized and executed on various accounts associated with the company and Mr. Cooper. Finally, in April 2001, a search warrant was authorized and executed on Mr. Cooper's residence in Topeka, Kansas.
PROCEDURAL HISTORY
On August 13, 2004, a grand jury returned a 148-count indictment naming Mr. Cooper, Renaissance, and co-conspirators Jesse Ayala Cota, Todd Eugene Strand, and Daniel Joe Gleason. Mr. Cota, who is a former IRS employee, was Renaissance's “national tax director from June 1999 until after the government raids [in 2000],” Aplt. Opening Br. at 5, and managed the company's “Tax Dream Team” from July 1999 through May 2001, R., Vol. 1, at 50. 2 Mr. Strand—whom the government described as Mr. Cooper's “right-hand man”—was Renaissance's “Vice-President of Marketing,” id., and “national marketing director from the inception of the company until after the October 2000 raids,” Aplt. Opening Br. at 5. Mr. Gleason was Renaissance's “national tax director from March 1998 until mid-1999.” Id. As the national tax director, Mr. Gleason also served as the “Director of the Tax [Dream] Team.” R., Vol. 1, at 50.
The indictment alleged that Renaissance was a fraudulent pyramid scheme, and that Mr. Cooper and his co-conspirators had conspired to defraud the IRS, Renaissance customers, and IMAs through the company's false tax material and fraudulent operations (e.g., the preparation of false tax returns for IMAs). Specifically, the indictment charged Mr. Cooper with: one count of conspiracy to defraud (by impeding the functions of the IRS in computing and collecting taxes, committing mail fraud, and committing wire fraud), in violation of 18 U.S.C. § 371 (Count 1); fifty-six counts of assisting in the preparation of false tax returns, in violation of 26 U.S.C. § 7206(2) and 18 U.S.C. § 2 (Counts 2–57); thirty-six counts of mail fraud, in violation of 18 U.S.C. §§ 1341 and 2 (Counts 58–93); eleven counts of wire fraud, in violation of 18 U.S.C. §§ 1343 and 2 (Counts 94–104); one count of conspiracy to launder money, in violation of 18 U.S.C. § 1956(h) (Count 105); forty-one counts of engaging in monetary transactions in property derived from unlawful activity, in violation of 18 U.S.C. §§ 1957 and 2 (Counts 106–46); and two counts of money laundering, in violation of 18 U.S.C. §§ 1956(a)(1)(B)(I) and 2 (Counts 147–48).
On December 7, 2006, the grand jury returned a 148-count superseding indictment. The superseding indictment “removed some sentencing guideline enhancements, corrected some typographical errors, and removed Dan Gleason, who had by that time entered into a plea agreement with the government, as a named defendant.” Aplt. Opening Br. at 2 (citation omitted). However, the superseding indictment did not add to, remove, or otherwise alter the charges brought against Mr. Cooper.
Prior to trial, Mr. Cooper filed a motion to suppress, arguing that the searches and seizures executed with regard to Mr. Cooper and Renaissance violated the Fourth Amendment. 3 More specifically, Mr. Cooper's motion “challenge[d] the searches and seizures executed against [him] and [Renaissance] on October 11, 2000[,] on the grounds that the warrant affidavits lacked probable cause [and] the search warrants were overbroad,” and challenged “[t]he remaining seizures ... as fruit of the poisonous tree,” as well as “all other evidence obtained through or as a result of the unconstitutional seizures.” R., Vol. 1, at 137 (Reply Mem. in Supp. of Mot. to Suppress, filed Sept. 22, 2006) (citations omitted). 4 In the event that the court concluded that the “affidavits and warrants survive[d] constitutional scrutiny on their face,” Mr. Cooper's motion requested “a hearing pursuant to Franks v. Delaware, 438 U.S. 154 (1978)[,] for the purpose of establishing that the “facts” and assertions in the affidavits ... were false, and were made by the agents in knowing and reckless disregard of their falsehood.”Id. at 135–36.
The district court orally denied Mr. Cooper's motion to suppress at a hearing held on November 20, 2006. First, the court concluded that the search warrants were supported by probable cause because the “affidavits state facts, not just conclusions, and provided the magistrates with the opportunity to make an independent evaluation of the allegedly false and misleading claims,” and the “[f]acts set forth in the affidavits support the magistrates' findings that there was a fair probability that warrants would uncover evidence of tax and mail fraud.” R., Vol. 2, at 54 (Mot. Hr'g Tr., dated Nov. 20, 2006). 5 Second, the court rejected Mr. Cooper's argument that the warrants violated the Fourth Amendment's particularity requirement because they were overbroad, having found that the warrants were “sufficiently limited and specific in view of the crimes that were being investigated.”Id. at 55. Finally, the court denied Mr. Cooper's request for a Franks hearing on account of his failure to “ma[ke] a substantial preliminary showing that the agents knowingly or recklessly withheld information from the magistrates or that the allegedly false statements were necessary to the finding of probable cause.” Id. at 56. Mr. Cooper then filed a motion asking the court to reconsider its denial of a Franks hearing, which the district court denied.
Mr. Cooper's co-defendants—Mr. Cota, Mr. Strand, and Mr. Gleason—all pleaded guilty and testified at Mr. Cooper's trial pursuant to their cooperation agreements. Mr. Cooper moved for judgment of acquittal under Federal Rule of Criminal Procedure 29 both after the government rested, see R., Vol. 4, at 91–92 (Trial Tr., dated Feb. 14, 2008) (“[T]he defense would move for judgment of acquittal on all counts in the superseding indictment.”), and after the close of all the evidence, see id. at 639 (“I would like to renew my motion for judgment of acquittal at this time.”). The district court denied both motions.
On February 28, 2008, the jury returned a verdict convicting Mr. Cooper on the one count of conspiracy to defraud (Count 1), seventeen of the thirty-six counts of mail fraud (Counts 58–61, 66, 68–69, 74, 76, 78–79, 83, 87–88, 91–93), all eleven counts of wire fraud (Counts 94–104), the one count of conspiracy to launder money (Count 105), all forty-one counts of engaging in monetary transactions in property derived from unlawful activity (Counts 106–46), and both counts of money laundering (Counts 147–48). The jury acquitted Mr. Cooper of all fifty-six counts of assisting in the preparation of false tax returns (Counts 2–57), and nineteen of the thirty-six counts of mail fraud (Counts 62–65, 67, 70–73, 75, 77, 80–82, 84–86, 88–90).
Mr. Cooper again renewed his motion for judgment of acquittal after the jury returned its verdict. 6 Mr. Cooper's motion—filed without a supporting brief—was a general motion for judgment of acquittal. However, Mr. Cooper filed a reply brief in support of his motion that significantly limited his contentions, at least arguably transforming his motion from a general one into a specific one. In particular, Mr. Cooper limited his motion to challenging the sufficiency of the evidence only as to Count 1—the count for conspiracy to defraud—reasoning that the government had “failed to prove a criminal conspiracy as alleged in Count One,” and that “if the evidence was insufficient to convict [Mr.] Cooper on Count One, all of the other convictions must be vacated as well.” R., Vol. 1, at 435, 446. In other words, Mr. Cooper's reply brief made clear that his motion pertained solely to the count for conspiracy to defraud, because each of the additional counts “depend[ed] upon the validity of the guilty verdict on Count One.” Id. at 434–35. Mr. Cooper raised no independent challenge in his reply brief to the sufficiency of the evidence on the remaining counts of conviction.
The district court denied Mr. Cooper's motion, holding that the “evidence was sufficient for the jury to find that defendant knowingly and voluntarily entered into an agreement with his coconspirators to defraud the United States and commit wire and mail fraud as alleged in count 1.” R., Vol. 1, at 452. Because Mr. Cooper's “challenge to the remaining convictions [wa]s dependant on his argument that there [wa]s insufficient evidence to convict him on count 1,” the court also held there was sufficient evidence to support those convictions. Id.
On June 17, 2009—more than fifteen months after the jury returned its verdict—the government sent Mr. Cooper discovery indicating that Mr. Gleason “was engaging in ongoing frauds against the government and the public from before the time of his guilty plea in this case and continuing through and after the trial.” Aplt. Opening Br. at 32. “[T]his additional information was several hundred pages of documents generated by the IRS ... as part of [its] efforts to collect a $2.4 million tax debt owed by [Mr.] Gleason, which ... established [that Mr.] Gleason submitted false information to the IRS ... and attempted to evade payment of his tax debt.” Aplee. Br. at 25. More specifically, these discovery documents demonstrated that Mr. Gleason had engaged in fraudulent activity that included providing the IRS with false information about his income, concealing bank accounts, falsely encumbering assets, titling his businesses in the names of relatives, funneling income through accounts held in relatives' names, filing fraudulent and frivolous IRS forms, and making false claims via the Internet.
Based on this discovery disclosure, Mr. Cooper filed a motion for a new trial under Federal Rule of Criminal Procedure 33(b), arguing that the government violated Brady v. Maryland, 373 U.S. 83 (1963), by failing to disclose this impeachment evidence. See Brady, 373 U.S. at 87 (holding that “suppression by the prosecution of evidence favorable to an accused ... violates due process where the evidence is material either to guilt or to punishment, irrespective of the good faith or bad faith of the prosecution”); see also Giglio v. United States, 405 U.S. 150, 154 (1972) (“When the “reliability of a given witness may well be determinative of guilt or innocence,” nondisclosure of evidence affecting credibility falls within th[e] general [Brady] rule.” (quoting Napue v. Illinois, 360 U.S. 264, 269 (1959))). At the hearing on Mr. Cooper's motion for a new trial, the government conceded that it had suppressed the evidence and that the evidence was favorable to Mr. Cooper; therefore, the only issue before the district court was whether this evidence was “material.” See R., Vol. 4, at 780 (Mots. Hr'g Tr., dated Mar. 9, 2010) (“The government concedes that the court could find that the prosecution suppressed the evidence and that the evidence is favorable to defendant. Thus, the court need only to determine whether the evidence was material.”). Mr. Cooper argued that the suppressed evidence was “material” because “[Mr.] Gleason was a key government witness ..., the suppressed discovery reveals that [Mr.] Gleason gave perjured testimony at trial,” R., Vol. 1, at 456, and “had the evidence been disclosed to the defense prior to trial, the government never would have presented [Mr.] Gleason as a witness,” id. at 455.
The district court denied Mr. Cooper's motion, having concluded that there was “no reasonable probability that the evidence would have affected the fairness of defendant's trial.” R., Vol. 4, at 781; accord id. at 785 (“In this case, the favorable evidence could not reasonably be taken to put the whole case in such a different light as to undermine confidence in the verdict.”). Mr. Gleason's testimony, the court explained, was neither “material” nor “critical” because it “was merely cumulative evidence of defendant's illegal activities.” Id. at 783. Consequently, “because it [wa]s [merely] cumulative,” this “newly disclosed evidence insignificantly impact[ed] the degree of [Mr. Gleason's] impeachment.” Id. at 785.
On April 20, 2010, the district court sentenced Mr. Cooper to 240 months' imprisonment. This timely appeal followed.
DISCUSSION
I. Motion for Judgment of Acquittal: Sufficiency of the Evidence to Support Mr. Cooper's Convictions
Mr. Cooper first claims that “[t]he evidence adduced at trial was insufficient to convict [him] of the charged offenses.” Aplt. Opening Br. at 35. He avers that there was insufficient evidence of an agreement to violate the law to support his conviction of conspiracy to defraud (Count 1). Mr. Cooper also argues that the government presented insufficient evidence of a “scheme or artifice to defraud” to support the seventeen mail fraud convictions (Counts 58–61, 66, 68–69, 74, 76, 78–79, 83, 87–88, 91–93) and eleven wire fraud convictions (Counts 94–104). Finally, Mr. Cooper argues that his remaining convictions were also supported by insufficient evidence, as these convictions derived from the conspiracy to defraud and mail and wire fraud convictions.
A. Standard of Review
We review challenges to the sufficiency of the evidence and denials of motions for judgment of acquittal de novo.United States v. Delgado-Uribe , 363 F.3d 1077, 1081 (10th Cir. 2004). In so doing, we must examine “whether “viewing the evidence in the light most favorable to the Government, any rational trier of fact could have found the defendant guilty of the crime beyond a reasonable doubt.””Id. (quoting United States v. Vallo, 238 F.3d 1242, 1246–47 (10th Cir. 2001)). However, we do not weigh conflicting evidence or consider witness credibility,id. , and the fact that prosecution and defense witnesses presented conflicting or differing accounts at trial does not necessarily render the evidence insufficient,see United States v. Shaffer , 472 F.3d 1219, 1223 (10th Cir. 2007) (“[T]he jury was free to credit Special Agent Zimmer's testimony and discredit Mr. Shaffer's.”); see also United States v. Denny, 48 F. App'x 732, 736 (10th Cir. 2002) (stating that evidence is not rendered insufficient merely because the “government and defense witnesses gave differing accounts at trial”).
B. Conspiracy to Defraud Conviction (Count 1)
To convict a defendant of conspiracy under 18 U.S.C. § 371, the government must prove that: “(1) there was an agreement to violate the law, (2) the defendant knew the essential objective of the conspiracy, (3) the defendant knowingly and voluntarily participated in the conspiracy, (4) an overt act was committed in furtherance of the conspiracy, and (5) the coconspirators were interdependent.” United v. Bedford, 536 F.3d 1148, 1156 [102 AFTR 2d 2008-5722] (10th Cir. 2008);accord United States v. Nall , 949 F.2d 301, 305 (10th Cir. 1991). 7 Mr. Cooper argues that the government failed to present evidence establishing the first element of conspiracy, an agreement to violate the law, because “none of [Mr.] Cooper's alleged co-conspirators—Cota, Strand, Gleason, Ruth, and Steelman—testified that they entered an illegal agreement with [Mr.] Cooper.” Aplt. Opening Br. at 38. He insists that “each alleged co-conspirator testified to the exact contrary.” Id.
Testimony by a co-conspirator that an illegal agreement was expressly entered into is not required to establish a conspiracy in this context. Rather, “[a]n agreement “may be inferred from the facts and circumstances of the case,”” United States v. Sells, 477 F.3d 1226, 1236 (10th Cir. 2007) (quoting United States v. Evans, 970 F.2d 663, 669 (10th Cir. 1992)); in other words, the agreement requirement may be satisfied entirely through circumstantial evidence, see, e.g., United States v. Whitney, 229 F.3d 1296, 1301 (10th Cir. 2000) (stating that an agreement “may be inferred entirely from circumstantial evidence”). Moreover, the jury is empowered to make credibility assessments: “resolution of conflicting evidence is exclusively within the discretion of the jury, as the trier of fact, and its verdict must be given added weight when the opportunity to hear and observe the witnesses is considered.”United States v. Vigil , 743 F.2d 751, 752 (10th Cir. 1984). Thus, a jury is free to discredit any evidence contradicting the existence of an agreement.
In support of its contention that an agreement existed between Mr. Cooper and his co-conspirators, the government points to evidence and testimony demonstrating, inter alia: (1) that Renaissance “expanded into a scheme to enable anyone associated with Renaissance to avoid paying taxes on their W-2 income ... and [to] fraudulent[ly] claim ... tax deductions” by ignoring the “ordinary and necessary” expenses requirement in the tax code, Aplee. Br. at 9; (2) that Mr. Cooper repeatedly offered false tax advice to promote Renaissance, despite the fact that many of his co-conspirators had brought concerns about the fraudulent nature of the business to his attention; (3) that the co-conspirators prepared false or fraudulent tax returns for IMAs, which were consistent with the fraudulent tax advice espoused by Mr. Cooper and Renaissance; and (4) that Renaissance's business continued to flourish, despite the fact that the conspirators—including Mr. Cooper—knew that the company's tax advice was false and that its tax work was fraudulent. On the basis of the foregoing evidence (among other evidence)— viewed in the light most favorable to the government—we conclude that a rational jury could have found that an agreement existed between Mr. Cooper and his coconspirators to violate the law. Accordingly, we conclude that the government presented sufficient evidence to support Mr. Cooper's conviction under Count 1 for conspiring to defraud.
C. Mail Fraud and Wire Fraud Convictions (Counts 58–61, 66, 68–69, 74, 76, 78–79, 83, 87–88, 91–93)
Next, Mr. Cooper argues that “the government failed to prove its contention that the Renaissance business was a scheme or artifice to defraud customers and [IMAs],” Aplt. Opening Br. at 39—in other words, he contends that the evidence it presented regarding the mail and wire fraud charges (Counts 58 through 104) was insufficient. “The elements of federal mail fraud as defined in 18 U.S.C. § 1341 are (1) a scheme or artifice to defraud or obtain property by means of false or fraudulent pretenses, representations, or promises, (2) an intent to defraud, and (3) use of the mails to execute the scheme.” United States v. Welch, 327 F.3d 1081, 1104 (10th Cir. 2003). “The first and second elements of federal mail and wire fraud are identical. The third element of wire fraud as defined in 18 U.S.C. § 1343 is the use of interstate wire or radio communications to execute the scheme”—that is, “the use of interstate wire or radio communications,” instead of “the mails,” to “execute the scheme.” Id. (footnote omitted). “One may “defraud” another within the meaning of §§ 1341 and 1343 by depriving another of property or “the intangible right of honest services.”” Id. (quoting 18 U.S.C. § 1346). Mr. Cooper insists that the first element of the mail and wire fraud charge—“a scheme or artifice to defraud or obtain property by means of false or fraudulent pretenses, representations, or promises”—was not satisfied here. Instead, he contends that “the evidence adduced at trial overwhelmingly established that Renaissance not only was a legitimate company, but one dedicated to achieving both excellence in its product and consistency and professionalism in its IMA sales force and affiliate network.” Aplt. Opening Br. at 39.
1. Forfeiture
“[I]f a defendant files a general motion for acquittal that does not identify a specific point of attack, the defendant is deemed to be challenging the sufficiency of each essential element of the government's case ....”United States v. Kelly , 535 F.3d 1229, 1234–35 (10th Cir. 2008). On the other hand, “[w]hen a defendant challenges in district court the sufficiency of the evidence on specific grounds, all grounds not specified in the motion are waived,” id. at 1234 (quotingUnited States v. Goode , 483 F.3d 676, 681 (10th Cir. 2007)) (internal quotation marks omitted)—or, to be more precise, forfeited, see Goode, 483 F.3d at 681 (“When a defendant challenges in district court the sufficiency of the evidence on specific grounds, “all grounds not specified in the motion are waived.” Although we have described the failure to raise a challenge in district court as a “waiver,” it is more precisely termed a forfeiture when there is no suggestion of a knowing, voluntary failure to raise the matter.” (citations omitted) (quoting United States v. Kimler, 335 F.3d 1132, 1141 (10th Cir. 2003))); 2A Charles Alan Wright & Peter J. Henning, Federal Practice and Procedure: Criminal § 469 at 388 (4th ed. 2009) (“[I]f the defendant has asserted specific grounds in the trial court as the basis for a motion for acquittal, he or she cannot assert other grounds on appeal.”);see also Richison v. Ernest Group, Inc. , 634 F.3d 1123, 1127–28 (10th Cir. 2011) (“If the theory was intentionally relinquished or abandoned in the district court, we usually deem it waived and refuse to consider it. By contrast, if the theory simply wasn't raised before the district court, we usually hold it forfeited.” (citations omitted)).
The rigorous plain-error standard governs our review of such forfeited claims. That is, we “review for plain error where a defendant appeals the sufficiency of the evidence based upon an argument that he failed to make or reaffirm before the district court.” United States v. Gallant, 537 F.3d 1202, 1223 (10th Cir. 2008) (emphasis added);see also Kimler , 335 F.3d at 1141 (“[B]ecause Kimler is deemed to have waived this issue, we will not address it on appeal “except for a review for plain error resulting in manifest injustice.”” (quotingUnited States v. Chavez-Marquez , 66 F.3d 259, 261 (10th Cir. 1995))). Under the plain error standard, Mr. Cooper must demonstrate: “(1) an error, (2) that is plain, which means clear or obvious under current law, and (3) that affects substantial rights. If he satisfies these criteria, this Court may exercise discretion to correct the error if [4] it seriously affects the fairness, integrity, or public reputation of judicial proceedings.” Goode, 483 F.3d at 681 (quoting Kimler, 335 F.3d at 1141) (internal quotation marks omitted).
As previously discussed, Mr. Cooper renewed his motion for judgment of acquittal post-verdict, asserting that “[w]ith respect to each count of conviction in this case, the government failed to prove the defendant's guilt beyond a reasonable doubt.” R., Vol. 1, at 403. This post-verdict general motion for judgment of acquittal was filed without a brief. In Mr. Cooper's reply brief in support of his post-verdict motion, however, he specifically limited the motion to challenging the sufficiency of the evidence only as to the count for conspiracy to defraud (Count 1), arguing that the government “failed to prove a criminal conspiracy as alleged in Count One,” and that “if the evidence was insufficient to convict [Mr.] Cooper on Count One, all of the other convictions must be vacated as well.” R., Vol. 1, at 435, 446. That is, his reply brief made clear that his motion—which previously purported to serve as a general motion challenging all counts of conviction—was focused solely upon the count for conspiracy to defraud. Id. at 434–35. Although he asserted in his reply brief that the remaining counts “depend[ed] upon the validity of the guilty verdict on Count One,” id., and therefore would fail if Count 1 failed, Mr. Cooper did not raise or reaffirm any independent challenge to the sufficiency of the evidence on the remaining counts.
Under these circumstances, Mr. Cooper has arguably forfeited his challenge to the sufficiency of the evidence on his remaining counts of conviction—that is, forfeited any independent challenge to the sufficiency of the evidence regarding his mail and wire fraud counts. Despite the fact that he had previously filed a general motion for judgment of acquittal, Mr. Cooper's restrictive representations in his reply brief could be construed, at least arguably, as transforming his general motion into a specific one, focused only on Count 1. If we were to conclude that Mr. Cooper has forfeited any challenge to the sufficiency of the evidence on his mail and wire fraud convictions, “we w[ould] not address [those convictions] on appeal “except for a review for plain error resulting in manifest injustice.””Kimler , 335 F.3d at 1141 (quotingChavez-Marquez , 66 F.3d at 261)).
However, we need not definitively opine on whether Mr. Cooper's challenges to his mail and wire fraud convictions should be assessed under the stringent plain-error standard, because even under the more-lenient de novo standard, we conclude that there was no error. That is, we conclude that there was sufficient evidence to satisfy the only challenged element of the mail and wire fraud charges—i.e., a scheme to defraud.
2. Sufficiency of the Evidence
Viewed in the light most favorable to the government, the evidence presented at trial is sufficient to support Mr. Cooper's mail and wire fraud convictions. First, the testimonial evidence supporting the existence of a conspiracy to defraud under Count 1, discussed supra, supports the existence of a scheme or artifice to defraud Renaissance customers and the IRS. Furthermore, the government points to additional evidence that Mr. Cooper transmitted false, fraudulent, or misleading information by mail and wire “to recruit IMAs or encourage IMAs to continue their participation in Renaissance, which meant the defendant ultimately continued to receive their $100 monthly payments [from IMAs].” Aplee. Br. at 17;see id. at 16–17 (citing documentary evidence presented at trial—such as “a 1998 version of the TRS containing all of the misleading information on the audio-cassette tapes about the application of the [fraudulent] deductions for the home-based business” and other “promotional materials” used to further the fraudulent scheme—which were sent through the “mail or interstate wire communication facilities”); id. at 14 (providing an overview of the “Renaissance Info Pak”—a promotional tool distributed through the mail—which contained several “false, fraudulent, or misleading” statements aimed at bringing in new IMAs). Viewed in the light most favorable to the government, this evidence (among other evidence presented at trial) was sufficient to support a finding of a scheme or artifice to defraud. Accordingly, even assuming, arguendo, that the issue is not forfeited, we nevertheless conclude that the government presented sufficient evidence supporting Mr. Cooper's convictions of mail and wire fraud.
D. Sufficiency of the Evidence of Other Convictions
On appeal, Mr. Cooper roots his challenge to the sufficiency of the evidence of his convictions of conspiracy to launder money, engaging in monetary transactions in property derived from unlawful activity, and money laundering (Counts 105 through 148) solely in the claimed insufficiency of the evidence of his convictions of conspiracy to defraud and mail and wire fraud. Mr. Cooper argues that because the evidence supporting the conspiracy to defraud and mail and wire fraud convictions is insufficient, “[t]he money laundering conspiracy and substantive money laundering charges, which are expressly dependent on [those] counts, must then be reversed as well.” Aplt. Opening Br. at 38 (citations omitted). Because Mr. Cooper's challenges to the sufficiency of the evidence of his conspiracy to defraud and mail and wire fraud convictions fail, his challenges to the sufficiency of the evidence of his other convictions likewise fail.
II. Motion for New Trial: Materiality of Suppressed Impeachment Evidence
Mr. Cooper next challenges the district court's denial of his motion for a new trial, arguing that the district court erred in determining that the suppressed impeachment evidence and Mr. Gleason's substantive testimony were cumulative. This court reviews de novo claims that the prosecution violatedBrady by failing to disclose material exculpatory evidence, “including the determination of whether suppressed evidence was material.” United States v. Hughes, 33 F.3d 1248, 1251 (10th Cir. 1994).
Under Brady, “the suppression by the prosecution of evidence favorable to an accused upon request violates due process where the evidence is material either to guilt or to punishment, irrespective of the good faith or bad faith of the prosecution.” United States v. Smith, 534 F.3d 1211, 1221 (10th Cir. 2008) (quotingBrady , 373 U.S. at 87) (internal quotation marks omitted). “Impeachment evidence is exculpatory forBrady purposes.” Id. at 1222 (citingUnited States v. Bagley , 473 U.S. 667, 676 (1985)).
A defendant seeking a new trial based on a Brady violation “must show that (1) the prosecution suppressed evidence, (2) the evidence was favorable to the defendant, and (3) the evidence was material.” United States v. Torres, 569 F.3d 1277, 1281 (10th Cir. 2009) (quotingUnited States v. Velarde , 485 F.3d 553, 558 (10th Cir. 2007)) (internal quotation marks omitted). As discussed above, the government conceded that the first two elements are met in this case; that is, that it suppressed favorable impeachment evidence that Mr. Gleason was engaged in fraudulent activity throughout the trial, including providing the IRS with false information about his income, concealing bank accounts, falsely encumbering assets, titling his businesses in the names of relatives, funneling income through accounts held in relatives' names, filing fraudulent and frivolous IRS forms, and making false claims via the Internet. Therefore, the only issue presented is whether the impeachment evidence at issue was material.
“[E]vidence is material only if there is a reasonable probability that, had the evidence been disclosed to the defense, the result of the proceeding would have been different. A reasonable probability is a probability sufficient to undermine confidence in the outcome.” Id. at 1282 (alteration in original) (quoting Bagley, 473 U.S. at 682 (Blackmun, J., concurring)) (internal quotation marks omitted). “The critical question is whether the lack of impeachment evidence shakes our confidence in the guilty verdict.” Smith, 534 F.3d at 1223. “To make the materiality determination, we view the suppressed evidence's significance in relation to the record as a whole.”Hughes , 33 F.3d at 1252. “What might be considered insignificant evidence in a strong case might suffice to disturb an already questionable verdict.”Torres , 569 F.3d at 1282 (quoting United States v. Robinson, 39 F.3d 1115, 1119 (10th Cir. 1994)) (internal quotation marks omitted).
A. Cumulative Impeachment Evidence
Mr. Cooper acknowledges that his cross-examination of Mr. Gleason at trial “establish[ed] that he testified falsely on direct about falsifications of his resume and about the substance of much of the tax advice that he provided to Renaissance.” Aplt. Opening Br. at 41. However, despite the fact that he successfully impeached Mr. Gleason on the stand, Mr. Cooper argues that the impeachment evidence drawn out at trial concerned “the distant past,” while the suppressed evidence “would have allowed the defense to show that at that very moment—while testifying as a government witness—[Mr.] Gleason was executing an extensive scheme to defraud the government.” Id. Thus, according to Mr. Cooper, the suppressed evidence is not cumulative because it “would have opened an entirely new line of cross-examination.” Id. at 42.
Where evidence “insignificantly impact[s] the degree of impeachment,” it generally will “not be sufficient to meet the ... materiality standard.”Douglas v. Workman , 560 F.3d 1156, 1174 (10th Cir. 2009). For example, where the credibility of a witness “has already been substantially called into question in the same respects by other evidence, additional impeachment evidence will generally be immaterial and will not provide the basis for aBrady claim.” Nuckols v. Gibson, 233 F.3d 1261, 1267 n.8 (10th Cir. 2000) (quoting Tankleff v. Senkowski, 135 F.3d 235, 251 (2d Cir. 1998)) (internal quotation marks omitted). Furthermore, we have indicated that “an incremental amount of impeachment evidence on an already compromised witness does not amount to material evidence.”United States v. Trujillo , 136 F.3d 1388, 1394 (10th Cir. 1998) (citing United States v. Derr, 990 F.2d 1330, 1336 (D.C. Cir. 1993)). Accordingly, we have “discarded as immaterial ... undisclosed impeachment evidence where it was cumulative of evidence of bias or partiality already presented “and thus would have provided only marginal additional support for [the] defense.””Douglas , 560 F.3d at 1174 (alteration in original) (quoting Trujillo, 136 F.3d at 1394).
In contrast, suppressed evidence that “significantly enhanc[es] the quality of the impeachment evidence usually will” satisfy the materiality standard.Douglas , 560 F.3d at 1174. For example, “[e]vidence that provides a new basis for impeachment is not [considered] cumulative and could well be material.” United States v. Robinson, 583 F.3d 1265, 1273 (10th Cir. 2009) (quoting United States v. Wilson, 481 F.3d 475, 480 (7th Cir. 2007)) (internal quotation marks omitted). “Merely because other impeachment evidence was presented does not [necessarily] mean that additional impeachment evidence is cumulative ....”Torres , 569 F.3d at 1284.
Contrary to Mr. Cooper's assertions, the evidence suppressed here does not provide an entirely new basis for impeachment. The suppressed evidence—which Mr. Cooper characterizes as showing that Mr. Gleason “was executing an extensive scheme to defraud the government,” Aplt. Opening Br. at 41—would provide an impeachment avenue by which to establish that Mr. Gleason is a liar and a tax cheat. But, as noted, Mr. Cooper concedes that he already “was able to establish that [Mr. Gleason] testified falsely on direct about falsifications of his resume and about the substance of much of the [fraudulent] tax advice that he provided to Renaissance.” Id. The evidence available to Mr. Cooper at trial and the suppressed evidence both impeach Mr. Gleason's credibility by suggesting that he is a dishonest person. Therefore, the suppressed evidence regarding Mr. Gleason would have “insignificantly impact[ed] the degree of impeachment,” and “would have provided only marginal additional support for [the] defense.”Douglas , 560 F.3d at 1174 (second alteration in original) (quoting Trujillo, 136 F.3d at 1394) (internal quotation marks omitted). This does not satisfy the materiality standard.
The cases in which this court has found that a new basis for impeachment existed generally involved a much starker contrast between the available and suppressed impeachment evidence. InRobinson , the defendant was able to cross-examine a confidential informant “on his criminal history, the payments he received from the [Bureau of Alcohol, Tobacco, Firearms, and Explosives (“ATF”)], and the ATF's intervention on his behalf following “scrape[s]” with the law,” 583 F.3d at 1269 (second alteration in original), but the suppression of the confidential informant's medical records left the defendant unable “to argue that the [confidential informant's] drug use, mental health problems, and use of prescription drugs at the time of trial affected his testimony,” id. at 1273. InNuckols , the suppressed evidence “would have provided the defense with the opportunity to call into question whether [the witness] had a motive for his testimony” and “could also have been used to question whether [the witness] had a motive to goad Mr. Nuckols into waiving his right to counsel during the interrogation and confessing to the crime.” 233 F.3d at 1267. Similarly, theDouglas court held that there was “a reasonable probability the result of [the defendant's] trial would have been different if the defense had had the ability to impeach [the witness] with evidence of the deal the prosecution made in exchange for his testimony,” where “[the defendant's] counsel attempted to impeach [the witness] on the issue of his motive to testify, [but] was stonewalled by [the witness's] repeated denials of the existence of a deal.” 560 F.3d at 1175. 8
In contrast, the relationship between the available and suppressed impeachment evidence here is similar to that in cases in which this court has concluded that the suppressed evidence was merely cumulative. In Trujillo, the government witness “testified on direct examination [that] he had three prior felony convictions and was testifying against Mr. Trujillo as a result of a plea agreement ... [and] further admitted to using cocaine and being a car thief.” 136 F.3d at 1394. We rejected Mr. Trujillo's argument that the suppressed evidence was “of a different type and magnitude than that presented at trial because it contained statements inconsistent with [the witness's] trial testimony and went beyond the potential motive and bias implicit in [the witness's] plea agreement.” Id. Although “we acknowledge[d] [that] there may be a difference in the degree to which [the witness] could have been impeached [by the suppressed evidence] ..., we fail[ed] to see any meaningful difference in the type of impeachment evidence [that was] available to the defense.” Id. “The jury,” we concluded, “was well aware of [the witness's] criminal propensities and motive for testifying ....”Id. ; see United States v. Page, 808 F.2d 723, 726, 730, 732–33 (10th Cir. 1987) (concluding that suppressed evidence that the witness had been arrested was cumulative where he had seven felony convictions, and that testimony concerning whether certain payments were bribes was cumulative where checks were introduced into evidence and other witnesses testified on this issue). In this case, due to the impeachment evidence displayed at trial on cross-examination, the jury was well aware that Mr. Gleason was a dishonest person, and equally aware that he had been involved in fraudulent tax activity. Furthermore, as discussed infra, because Mr. Gleason's testimony was itself cumulative, he was not a critical witness for the prosecution.
In the end, because the impeachment evidence was merely cumulative, we are not convinced that the government's suppression undermines confidence in the outcome of Mr. Cooper's trial. See Trammell v. McKune, 485 F.3d 546, 552 (10th Cir. 2007) (“We need to be convinced only that “the government's evidentiary suppression undermines confidence in the outcome of the trial.”” (quoting Kyles v. Whitley, 514 U.S. 419, 434 (1995))). Accordingly, we conclude that the impeachment evidence suppressed here was not material.
B. Cumulative Witness Testimony
Mr. Cooper also contends that the district court erred when it concluded that Mr. Gleason's testimony was itself cumulative. Mr. Cooper argues that Mr. Gleason “was a unique witness due to his position with Renaissance and the scope of services that he provided.” Aplt. Opening Br. at 42. Mr. Cooper further argues that in contrast to his other co-defendants, whose “testimony as a whole was favorable to him and to the company, its objectives, and its product,” Mr. Gleason “provided testimony that was generally and pervasively hostile.”Id. at 43. The government responds that Mr. Gleason's testimony was not essential to Mr. Cooper's convictions because Mr. Gleason “was one of several tax return preparers who acknowledged preparing false or fraudulent tax returns in furtherance of the Renaissance scheme” and “was only one of several coconspirators who had specifically drawn the defendant's attention to faults with the Renaissance scheme, and the defendant chose to ignore the advice and information from each.” Aplee. Br. at 27–28.
In instances where we have concluded that the allegedly suppressed impeachment evidence was material, we have stressed that the witness being impeached was absolutely critical to the government's case. See Robinson, 583 F.3d at 1271 (“[H]is testimony was central—indeed essential—to the government's case.... It is not a stretch to say that the guilty verdict in this case depended upon the [confidential informant's] testimony.”);Douglas , 560 F.3d at 1175 (“[The witness] was an indispensable witness for the State's case against [the defendant].... Because impeachment of the witness who held the key to the successful prosecution of [the defendant] was denied to the defense, the district court correctly concluded that the State's Brady violations were material.”); Nuckols, 233 F.3d at 1266 (“[The witness's] trial testimony was key to a successful prosecution.... If [the witness's] testimony that Mr. Nuckols initiated the interrogation were impeached, the entire support for the State's case would have been significantly undermined, if not destroyed altogether.”).
A review of the evidence here demonstrates that Mr. Gleason—although an important witness—was not a crucial orcritical witness to the government's case because several other co-conspirators provided commensurate testimony. As the district court stated: “[Mr.] Gleason was not the sole tax return preparer to testify that false or fraudulent tax returns were filed with the IRS as a result of Renaissance's activities.” R., Vol. 4, at 781. For example, “[Mr.] Steelman ..., [Ms.] Ruth[,] and [Ms.] Crotts testified that the fraudulent tax returns they prepared for Renaissance [IMAs] ... were consistent with the false tax advice provided by [Mr. Cooper] and Renaissance,”id. , and “multiple co-conspirators testified at trial that they raised concerns about the false tax advice to [Mr. Cooper],” id. at 782. This point is underscored by our precedent; as a witness, Mr. Gleason was not as unique and critical as the government's witnesses inRobinson, Douglas, Nuckols , and Torres. In light of the foregoing, we conclude the district court was correct in concluding that “[Mr.] Gleason's testimony was merely cumulative evidence of [Mr. Cooper's] illegal activities.” Id. at 783. Consequently, the suppressed impeachment evidence regarding Mr. Gleason was not material.
III. Motion to Suppress: Validity of Warrants
Mr. Cooper argues that the district court erred in denying his motion to suppress because the warrants were issued without probable cause. Additionally, he argues that the district court erred in denying his motion to suppress because the warrants were insufficiently particular. 9 Lastly, Mr. Cooper argues that the district court should have held an evidentiary hearing under Franks v. Delaware.
When reviewing the denial of a motion to suppress based on alleged Fourth Amendment violations, this court
consider[s] the totality of the circumstances and view[s] the evidence in a light most favorable to the government. We accept the district court's factual findings unless those findings are clearly erroneous. The credibility of witnesses, the weight to be given evidence, and the reasonable inferences drawn from the evidence fall within the province of the district court. Keeping in mind that the burden is on the defendant to prove that the challenged search was illegal under the Fourth Amendment, the ultimate determination of reasonableness under the Fourth Amendment is a question of law reviewable de novo.
United States v. Higgins, 282 F.3d 1261, 1269 (10th Cir. 2002) (quoting United States v. Gordon, 168 F.3d 1222, 1225 (10th Cir. 1999)) (internal quotation marks omitted). We conclude that the search warrants complied with the dictates of the Fourth Amendment, and we therefore hold that the district court did not err in denying Mr. Cooper's motion to suppress. We also hold that Mr. Cooper was not entitled to an evidentiary hearing under Franks. 10
A. Probable Cause
In support of his motion to suppress, Mr. Cooper first asserts that the “warrants ... were lacking in probable cause,” and therefore did not comply with the Fourth Amendment. Aplt. Opening Br. at 36. In determining whether a search warrant is supported by probable cause, this court “reviews the sufficiency of the affidavit upon which a warrant is issued by looking at the totality of the circumstances and simply ensuring “that the magistrate had a substantial basis for concluding that probable cause existed.”” United States v. Tisdale, 248 F.3d 964, 970 (10th Cir. 2001) (quotingIllinois v. Gates , 462 U.S. 213, 238–39 (1983)). “Probable cause means that “there is a fair probability that contraband or evidence of a crime will be found in a particular place.”” Id. (quotingGates , 462 U.S. at 238). “Sufficient information must be presented to the magistrate to allow that official to determine probable cause; his action cannot be a mere ratification of the bare conclusions of others.”Gates , 462 U.S. at 239.
The district court found that “the magistrate had a substantial basis for concluding that there was a fair probability that contraband or evidence of a crime would be found in the places to be searched or that the searches would uncover evidence of wrongdoing.” R., Vol. 2, at 53–54. The court explained that “[t]he affidavits state facts, not just conclusions, and provided the magistrates with the opportunity to make an independent evaluation of the allegedly false and misleading claims.” Id. at 54.
On appeal, Mr. Cooper correctly asserts that “whether the information set forth in an affidavit is sufficient to support probable cause must be determined on the basis of the facts presented to the magistrate, and not on mere conclusions.” Aplt. Opening Br. at 45. He argues that the affidavits presented to the magistrate judge in this case “did not provide a substantial basis for determining that probable cause existed, and [that] the magistrate's determination was merely the ratification of the agents' bare conclusions.”Id. at 46. Accordingly, he posits, “probable cause was lacking,” id., and therefore the warrants did not comply with the Fourth Amendment.
Mr. Cooper cites only two examples of what he believes to be such “bare conclusions”: (1) “[a]ccording to Renaissance's promotional material, all new members are automatically entitled to $5,000.00 in income tax deductions for the current calendar year”; and (2) “[e]ssentially, Renaissance is selling and offering to sell an income tax reduction package that promises immediate income tax deductions and reductions to individuals who have not incurred expenses in a legitimate home-based business.”Id. at 45–46 (alterations in original) (internal quotation marks omitted). However, these are not the type of bare conclusions with which the Supreme Court has shown concern.
The Gates court gave two examples of conclusory statements that failed to provide magistrates with a substantial basis for concluding that probable cause exists. In that case, the Court stated that neither “[a] sworn statement of an affiant that “he has cause to suspect and does believe that” [contraband] is located on certain premises,” Gates, 462 U.S. at 239 (quotingNathanson v. United States , 290 U.S. 41 (1933)), nor “[a]n officer's statement that “affiants have received reliable information from a credible person and believe” that [drugs are] stored in a home,”id. (quoting Aguilar v. Texas, 378 U.S. 108 (1964)), was sufficient. Those were examples of “wholly conclusory statement[s]” that utterly lacked any factual support. Id.
Here, on the other hand, the twenty-seven-page affidavit sets forth numerous facts upon which a magistrate judge could find probable cause. For example, the affidavit asserts that on “nine separate occasions,” an undercover agent was mailed “Renaissance promotional material such as videotapes, brochures, tax forms, and other material containing some false and misleading information.” Supp. R., Vol. 2, at 147 (Appl. & Affidavit for Search Warrant, Gov. Exh. 1, filed Oct. 6, 2000). The affidavit goes on to detail the dates and contents of these mailings, as well as the nature of various false statements, misrepresentations, or omissions contained therein. The affidavit also details the actions of three undercover agents who met with Renaissance affiliates—including Mr. Cooper—and unearthed evidence regarding the fraudulent nature of the Renaissance scheme. Included in the agents' account are statements by Renaissance affiliates, which the agents surreptitiously recorded.
These examples are a far cry from the sort of bare conclusions that the Supreme Court disapproved of in Gates. To the contrary, the assertions made in the affidavit—which are supported by sufficient facts—provided the magistrate judge in this case “with a substantial basis for determining the existence of probable cause.” Gates, 461 U.S. at 239. Accordingly, we hold that the district court committed no error in determining that the magistrate judge had a substantial basis for concluding that probable cause existed.
B. Particularity
Mr. Cooper next claims that the search warrants were invalid under the Particularity Clause of the Fourth Amendment. He argues that the warrants were “constitutionally overbroad” because they “authorized precisely the general searches of Renaissance property that are proscribed by the Fourth Amendment” and “fail[ed] to state what criminal activity was being investigated, instead merely reciting the mail fraud and money laundering statutes.” Aplt. Opening Br. at 36, 47. This court reviews de novo “whether the warrant at issue is sufficiently particular.” United States v. Williamson, 1 F.3d 1134, 1135 (10th Cir. 1993).
The Fourth Amendment's Particularity Clause provides that warrants must “particularly describ[e] the place to be searched, and the persons or things to be seized.”Groh v. Ramirez , 540 U.S. 551, 557 (2004) (emphasis omitted) (quoting U.S. Const. amend. IV) (internal quotation marks omitted). “A description is sufficiently particular when it enables the searcher to reasonably ascertain and identify the things authorized to be seized.” United States v. Riccardi, 405 F.3d 852, 862 (10th Cir. 2005) (quotingUnited States v. Leary , 846 F.2d 592, 600 (10th Cir. 1988)) (internal quotation marks omitted). “Even a warrant that describes the items to be seized in broad or generic terms may be valid when the description is as specific as the circumstances and the nature of the activity under investigation permit.” Id. Furthermore, although the Fourth Amendment “requires particularity in the warrant, not in the supporting documents,” Groh, 540 U.S. at 557, “the Fourth Amendment [does not] prohibit[] a warrant from cross-referencing other documents,” id., such as an affidavit, which may allow the warrant in some circumstances to satisfy the particularity requirement. See, e.g., Riccardi, 405 F.3d at 863 n.1 (“Where the warrant itself is insufficiently specific regarding the items to be searched and seized, this Court has held that the affidavit in support of the warrant can cure the want of specificity ....”). In this instance, the warrants—when read in light of the crime being investigated (i.e., a broad and complex financial scheme to defraud), and when considered in conjunction with the supporting affidavits—were sufficiently particular to satisfy the requirements of the Fourth Amendment. 11
It is true that the warrants viewed in isolation speak in general terms. See Supp. R., Vol. 2, at 184 (Search Warrant, dated Oct. 6, 2000) (only describing the building to be searched, listing the statutes alleged to be violated, and referring to a two-page “attached list of items” to be seized). Mr. Cooper argues they were constitutionally deficient because they “fail to state what criminal activity was being investigated, instead merely reciting the mail fraud and money laundering statutes,” and were therefore “essentially unlimited, containing an exhaustive list of virtually everything needed to run a business.” Aplt. Opening Br. at 47.
However, despite the generality of the warrants themselves, the supporting affidavits fill in many of the necessary details. In particular, the affidavits flesh out how the conduct being investigated is related to the statutes listed on the warrants. For example, the affidavits indicate that “[t]he use of the United States mail and commercial interstate carriers to transport Renaissance promotional materials or other matters in furtherance of this scheme or artifice to defraud United States consumers is in violation of 18 U.S.C. § 1341, which is mail fraud.” Supp. R., Vol. 2, at 144. The affidavits additionally state that “[t]he use of these fraud proceeds to promote the fraud or to conceal the identity, source, or nature of the proceeds would be money laundering in violation of 18 U.S.C. § 1956 or 18 U.S.C. § 1957.” Id. Furthermore, they describe various “mailings [that] contained Renaissance promotional material such as videotapes, brochures, tax forms, and other material containing some false and misleading information,” id. at 147, and various bank and brokerage accounts held by Mr. Cooper, Renaissance, or associated entities, see id. at 153–58. Importantly, the affidavits also include a list of “[i]tems to be seized,” id. at 161–62, 86–87, which—when read in conjunction with the warrant and the remainder of each affidavit—would “enable[] the [executing officers] to reasonably ascertain and identify the things authorized to be seized,” Riccardi, 405 F.3d at 862 (quotingLeary , 846 F.2d at 600). Contrary to Mr. Cooper's assertions, the warrants and affidavits do much more than “merely recit[e] the mail fraud and money laundering statutes.” Aplt. Opening Br. at 47.
Furthermore, as noted above, “[e]ven a warrant that describes the items to be seized in broad or generic terms may be valid when the description is as specific as the circumstances and the nature of the activity under investigation permit.” Riccardi, 405 F.3d at 862 (quotingLeary , 846 F.2d at 600). In other words, whether a search warrant is sufficiently particular depends in part on the nature of the crimes being investigated. Warrants relating to more complex and far-reaching criminal schemes may be deemed legally sufficient even though they are less particular than warrants pertaining to more straightforward criminal matters.See United States v. Hargus , 128 F.3d 1358, 1362 (10th Cir. 1997) (“[W]e are satisfied that [the warrant] is sufficiently limited and specific, in view of the nature of this extended conspiracy and other crimes for which he was being investigated ....”); United States v. Janus Indus., 48 F.3d 1548, 1554 (10th Cir. 1995) (“The type of criminal activity under investigation in the present case—a drug paraphernalia business—makes it difficult to list with great particularity the precise items desired to be seized which evidence such activity.”). Indeed, the complex and comprehensive nature of the broad scheme of financial criminal activity implicated in this case “makes it difficult to list with great particularity the precise items desired to be seized which evidence such activity.” Janus Indus., 48 F.3d at 1554. In the face of this difficulty, the affiants provided a meaningful and sufficient amount of detail.
In sum, the affidavits provide significantly more detail than the search warrants regarding the crimes at issue and the nature of the items to be seized. Reading the affidavits in conjunction with the search warrants “enable[d] the searcher to reasonably ascertain and identify the things authorized to be seized.” Riccardi, 405 F.3d at 862 (quotingLeary , 846 at 600). In light of the complex nature of the activities being investigated here, we conclude that the warrants were sufficiently particular when read in conjunction with their supporting affidavits.
B. Franks Hearing
Mr. Cooper alternatively argues that the district court erred in failing to afford him an evidentiary hearing pursuant toFranks v. Delaware . His argument in support of this claim, in its entirety, states: “Alternatively, the [district] court at least should have held a hearing pursuant to [Franks], as the information before the court constituted a substantial preliminary showing that the agents knowingly, or with reckless disregard for the truth, made false statements in the affidavits.” Aplt. Opening Br. at 49 (citing Franks, 438 U.S. at 171–72;United States v. Basham , 268 F.3d 1199, 1204 (10th Cir. 2001)). As Mr. Cooper provides no other argument or authority in support of this claim, he has insufficiently raised it on appeal. It is well-settled that “[a]rguments inadequately briefed in the opening brief are waived.”Adler v. Wal-mart Stores, Inc. , 144 F.3d 664, 679 (10th Cir. 1998); see, e.g., Bronson v. Swensen, 500 F.3d 1099, 1104 (10th Cir. 2007) (“[W]e routinely have declined to consider arguments that are not raised, or are inadequately presented, in an appellant's opening brief.”). We therefore conclude that Mr. Cooper has waived this argument on appeal. 12
In any event, even if we were to conclude that Mr. Cooper had adequately presented his Franks argument on appeal, we would hold that his claim is without merit. We briefly address it here.
A defendant is entitled to a Franks hearing if he “makes a substantial showing that the affidavit contains intentional or reckless false statements and if the affidavit, purged of its falsities, would not be sufficient to support a finding of probable cause.” United States v. Kennedy, 131 F.3d 1371, 1376 (10th Cir. 1997) (citingFranks , 438 U.S. at 155–56). “[T]he standards of deliberate falsehood and reckless disregard set forth in Franks apply to material omissions, as well as affirmative falsehoods.”Id. (quoting Stewart v. Donges, 915 F.2d 572, 582 (10th Cir. 1990)) (internal quotation marks omitted). A defendant's allegations must be accompanied by an offer of proof. United States v. Owens, 882 F.2d 1493, 1498 (10th Cir. 1989). Defendants must “point out specifically the portion of the warrant affidavit that is claimed to be false; and they should be accompanied by a statement of supporting reasons. Affidavits or sworn or otherwise reliable statements of witnesses should be furnished, or their absence satisfactorily explained.” Id. (quotingFranks , 438 U.S. at 171).
“[T]his court has not adopted a standard of review [for the denial of a Franks hearing] but other Circuit Courts of Appeals apply either a clear error standard or a de novo standard.” United States v. Gentry, 406 F. App'x 274, 279 (10th Cir. 2010);accord United States v. Vandemerwe , 405 F. App'x 344, 347 (10th Cir. 2010) (“[W]e have not expressly indicated what standard of review applies to a district court's refusal to conduct a Franks hearing.” (alteration in original) (quoting United States v. Archuleta, 222 F. App'x 710, 715 (10th Cir. 2007)) (internal quotation marks omitted)). We need not opine on the appropriate standard of review that this court should adopt, because we may uphold the district court's decision to not afford Mr. Cooper aFranks hearing even applying the more-searching de novo standard.
The district court found that Mr. Cooper “ha[d] not made a substantial preliminary showing that the agents knowingly or recklessly withheld information from the magistrates or that the allegedly false statements were necessary to the finding of probable cause,” and that he therefore was not entitled to a Franks evidentiary hearing. R., Vol. 2, at 56. Mr. Cooper makes a conclusory argument that the district court should have held a Franks hearing because “the information before the court constituted a substantial preliminary showing that the agents knowingly, or with reckless disregard for the truth, made false statements in the affidavits.” Aplt. Opening Br. at 49. Separately, in discussing the Leon good-faith exception, Mr. Cooper submits that “the agents deliberately withheld any factual information that would have allowed a magistrate to make an independent determination as to whether Renaissance was in fact making the representations in its promotional materials that the agents claimed it was making,” and that “[t]he agents, at a minimum, “were reckless in not including in the affidavit information which was known and easily accessible to them.”” Id. at 48 (quoting United States v. Fuccillo, 808 F.2d 173, 178 (1st Cir. 1987)).
Mr. Cooper has utterly failed to satisfy his burden here. On appeal, Mr. Cooper does not so much as identify any intentionally or recklessly false statements or material omissions by the affiants. Nor does he assert that, with such misstatements or omissions rectified, the affidavit would not support a finding of probable cause. Accordingly, even if this issue were not waived, we would conclude that the district court did not err in denying Mr. Cooper's request for a Franks hearing.
CONCLUSION
Based on the foregoing, we affirm the district court's denials of Mr. Cooper's motions for judgment of acquittal, motion for a new trial, and motion to suppress, and therefore affirm Mr. Cooper's convictions.
*
United States District Judge William P. Johnson of the District of New Mexico, sitting by designation.
1
Earlier versions of the TRS included the “Tax Pack,” which Renaissance marketed and sold in 1997, and the “Tax Advantage System,” which Renaissance marketed and sold in 1998 and 1999. Aplt. Opening Br. at 7.
2
“The chief architect behind the creation of the Tax Dream Team was [co-conspirator] Todd Strand.” Aplt. Opening Br. at 16 n.2. Mr. Cota took over as the leader of the Tax Dream Team when he joined Renaissance as its national tax director in 1999.Id. The Tax Dream Team was “a group of individuals promoted by Renaissance as tax experts.” R., Vol. 1, at 50. The team “had the final word on all tax advice given by the company” and, under the direction of Mr. Cota, was responsible for building the ATPN and rewriting the TRS. Aplt. Opening Br. at 16 n.2, 18, 21.
3
In his suppression motion, Mr. Cooper challenged the “eleven federal search warrants—four general warrants for seizure of business records and seven warrants for seizure of bank accounts—[executed] on October 11, 2000.” R., Vol. 1, at 118 (Mot. to Suppress, filed June 29, 2006). Mr. Cooper's motion did not appear to challenge the search warrant for his safe deposit box.
In his reply brief, however, Mr. Cooper sought to challenge all twelve of the searches and seizures that were executed on October 11, 2000. Moreover, the government's response characterized Mr. Cooper's motion as “seek[ing] suppression of all evidence seized pursuant to the search and seizure warrants served on October 11, 2000.” R., Vol. 1, at 148.
4
Mr. Cooper also averred that “[t]he warrants ... violate[d] the Fourth Amendment on the separate ground that the information contained in the affidavits was stale.” R., Vol. 1, at 133. The district court rejected this argument, and Mr. Cooper has not raised it as a separate claim on appeal. Consequently, we need not consider it here.
5
The district court alternatively held that “even if ... probable cause was lacking, [it] would still deny [Mr. Cooper's] motion to suppress based upon [United States v. Leon, 468 U.S. 897 (1984)], wherein the Supreme Court held that when police officers act in good faith and reasonably rely on a search warrant, the evidence obtained during the search should not be suppressed even if the warrant was lacking in probable cause.” R., Vol. 2, at 56. The court concluded that Leon's “good faith” exception applied because “the officers ... in this case acted in good faith, and the warrant contained sufficient information for a reasonable officer to believe that [the] warrant [was] valid.”Id.
6
The district court concluded that Mr. Cooper had “not contest[ed] his conviction on Count 66,” R., Vol. 1, at 448 n.1 (Mem. & Order, filed Apr. 14, 2009), because he had omitted Count 66 both when he recited his counts of conviction and when he asserted that “no rational juror could have found Mr. Cooper guilty of any of counts 1, 58–61, 68–69, 74, 76, 78–79, 83, 87–88, or 91–148 of the Superseding Indictment.” Id. at 403 (Mot. for J. of Acquittal, filed Apr. 10, 2008). The better view, however, is that Mr. Cooper's motion did challenge his conviction on Count 66, but that he inadvertently omitted Count 66 when enumerating the challenged counts. In his motion for judgment of acquittal, almost immediately before the enumeration of counts, Mr. Cooper expressly states that “defendant ... moves for judgment of acquittal on all counts of conviction in this case.” Id. (emphasis added). Similarly, in his reply brief regarding this matter, Mr. Cooper concludes his arguments by clearly noting that “[j]udgment of acquittal must be entered as to each count of conviction in this case.” Id. at 447 (Def.'s Reply Mem. in Supp. of Mot. for J. of Acquittal, filed Feb. 12, 2009) (emphasis added). The record allows for no dispute that Count 66 was one of Mr. Cooper's counts of conviction. Id. at 391 (Verdict Form, filed Feb. 28, 2008). Therefore, Mr. Cooper's general attack on his counts of conviction seemingly would have included a challenge to Count 66. Furthermore, as a legal matter, there was nothing to significantly distinguish Count 66 from the other mail fraud counts. In other words, as the district court recognized, “the same analysis [would] appl[y]”id. at 448 n.1, to Count 66 as to the other mail fraud counts. Therefore, we cannot discern any logical reason why Mr. Cooper would have intentionally omitted Count 66 from his motion for judgment of acquittal, which challenged his other mail fraud counts of conviction.
7
Our case law makes clear that “a conspiracy ... does not [necessarily] require proof of an overt act” in all instances. United States v. Fishman, __F.3d__, 2011 WL 2084207, at 6 (10th Cir. May 27, 2011) (citing Whitfield v. United States, 543 U.S. 209 (2005)). However, when a conspiracy charge is brought under § 371—the general conspiracy statute—the “overt act” requirement must be met.
8
Although this court's decision inUnited States v. Torres presents a closer call, it is distinguishable. There we held that suppressed evidence of a confidential informant's misidentification of the defendant was not cumulative of an earlier misidentification. 569 F.3d at 1283–84. We reached our conclusion because, with the evidence, “defense counsel could have shown that, rather than the first misidentification being a one-time slip-of-the-tongue, the [confidential informant] had difficulty identifying the various members of Mr. Torres's extended family and might reasonably have thought she was dealing with one member when in fact it was another.” Id. at 1284. However, inTorres , evidence that the confidential informant had been retained by the DEA on two other occasions was also wrongly suppressed and deemed material. See id. at 1280, 1282–83. Moreover, the confidential informant was the government's critical witness: “the government's case hinge[d] on the [confidential informant's] credibility.” Id. at 1283. As we see it, the factual context of Torres distinguishes it from this case. Here, unlike in Torres, repetition of the conduct at issue was not especially important; the jury had already been presented with evidence suggesting that Mr. Gleason was dishonest and a liar, especially with regard to financial and tax matters. Another series of lies of at least roughly the same ilk would have been unlikely to have materially affected their judgment on this point. Further, there was other suppressed evidence at play in Torres of an entirely different sort (i.e., the DEA evidence) that arguably could have factored into or influenced the court's overall conclusion that all of the suppressed evidence at issue was material. There is no such additional evidence here. In sum, we conclude thatTorres is distinguishable.
9
Mr. Cooper acknowledges that the warrants, and the affidavits underlying these warrants, “each recite the same “facts” and assertions to support probable cause.” R., Vol. 1, at 122; see Aplt. Opening Br. at 26–27 (“The search warrant affidavits ... [and] seizure warrants utilize virtually identical language.” (citing the twelve warrants executed on October 11, 2000)). Moreover, neither the parties nor the district court appear to draw any distinctions among the numerous warrants and supporting affidavits. Accordingly, for ease of reference, we cite to the (shared) language of only one of the search warrants—that is, the search warrant executed October 11, 2000, on Renaissance's distribution center, as well as the supporting application and affidavit.
10
Mr. Cooper asserts that, were we to hold that the warrants violated the Fourth Amendment such that any evidence seized pursuant to their execution should have been suppressed, “all fruits of the poisonous tree” must also be suppressed. Aplt. Opening Br. at 48–49. The government, on the other hand, argues that any Fourth Amendment violation does not require suppression of any evidence because the good-faith exception to the warrant requirement—articulated by the Supreme Court inUnited States v. Leon —is applicable in this case. Because we conclude that the warrants complied with the Fourth Amendment, we need not address either of these arguments.
11
In concluding that the warrants were sufficiently particular, the district court consulted the supporting affidavits. See R., Vol. 2, at 55 (referring to “the facts set forth in the affidavit”). Generally, an “affidavit in support of the warrant can cure the want of specificity ... only if the affidavit is both incorporated in and attached to the warrant.” Riccardi, 405 F.3d at 863 n.1. It is unclear whether those two requirements are met in this case. However, before the district court, Mr. Cooper did not object to the court's practice of referring to the affidavits, nor has he challenged that practice on appeal. In fact, at oral argument, Mr. Cooper's attorney acknowledged that the court in this case was “absolutely” permitted to consider the affidavits in determining whether the warrants satisfied the Fourth Amendment's particularity requirements. Oral Argument at 9:15–9:44. Therefore, the propriety of incorporating the affidavits in evaluating Mr. Cooper's particularity claim is not before us on appeal. Like the district court, we therefore consider the warrants in conjunction with the affidavits.
12
At oral argument, both Mr. Cooper's counsel and the government indicated that they believed that theFranks issue is before the court on appeal.See Oral Argument at 11:38 (Judge: “Did you raise a Franks challenge, at all?” Counsel for Mr. Cooper: “I did.” Judge: “Is that before us on appeal?” Counsel for Mr. Cooper: “It is.”);id. at 12:07–14:40 (acknowledging that theFranks issue was “raised in the appellant's [opening] brief” and was before the court on appeal). However, we are not bound by the parties' concessions made at oral argument as to whether this issue has been adequately placed before the court on appeal. See, e.g., Koch v. U.S. Dept. of Interior, 47 F.3d 1015, 1018 (10th Cir. 1995) (“[A] court is not bound by stipulations of the parties as to questions of law.” (quotingDimidowich v. Bell & Howell , 803 F.2d 1473, 1477 n.1 (9th Cir. 1986)) (internal quotation marks omitted)).
UNITED STATES OF AMERICA, Plaintiff-Appellee, v. MICHAEL CRAIG COOPER, Defendant-Appellant.
Case Information:
Code Sec(s):
Court Name: UNITED STATES COURT OF APPEALS TENTH CIRCUIT,
Docket No.: No. 10-3105,
Date Decided: 08/15/2011.
Disposition:
HEADNOTE
.
Reference(s):
OPINION
John Jenab of Jenab & McCauley, LLP, Olathe, Kansas, for Defendant-Appellant.
Scott C. Rask, Assistant United States Attorney (Barry R. Grissom, United States Attorney, with him on the brief), Kansas City, Kansas, for Plaintiff-Appellee.
UNITED STATES COURT OF APPEALS TENTH CIRCUIT,
Appeal from the United States District Court for the District of Kansas (D.C. No. 2:04-CR-20105-CM-JPO-1)
Before HOLMES and BALDOCK, Circuit Judges, and JOHNSON, District Judge. *
Judge: HOLMES, Circuit Judge.
PUBLISH
INTRODUCTION
Defendant-Appellant Michael Craig Cooper was convicted by jury of one count of conspiracy to defraud, multiple counts of mail and wire fraud, one count of conspiracy to commit money laundering, two counts of money laundering, and multiple counts of engaging in monetary transactions in property derived from unlawful activity. During the proceedings below, Mr. Cooper filed several motions with the district court, including motions for a judgment of acquittal, a post-verdict motion for a new trial, and a motion to suppress evidence under the Fourth Amendment. The district court denied them all. On appeal, Mr. Cooper challenges the district court's denial of his motions for a judgment of acquittal, his motion for a new trial, and his motion to suppress. Exercising jurisdiction under 28 U.S.C. § 1291, we affirm.
FACTUAL BACKGROUND
Mr. Cooper was the founder, president, and chief executive officer of Renaissance, The Tax People, Inc. (“Renaissance”), which he founded in 1995. Beginning in 1997, Renaissance developed, marketed, and sold tax materials aimed at home-based business owners. More specifically, Renaissance sold a tax package called the Tax Relief System (“TRS”), which “included a written manual and set of accompanying audiotapes setting forth the general guidelines and rules applicable to the wide array of tax deductions available to owners of home-based businesses.” Aplt. Opening Br. at 7;see also id. at 4 (stating that the TRS “consisted of a plastic clamshell containing a booklet and audiotapes summarizing tax deductions available to owners of a home-based business”). 1 The TRS sold for $300.
Renaissance also sold a bundle of services called the Platinum Tax Advantage (“PTA”), which purported to provide Renaissance users with unlimited tax advice and unlimited representation in the event of a tax audit. The tax advice and representation were provided by “tax professionals affiliated with Renaissance.” Id. at 4. The PTA was provided for a monthly fee of $100.
Renaissance operated through a network of independent sales representatives called Independent Marketing Associates (“IMAs”). The IMAs both sold Renaissance products and recruited new IMAs. IMAs earned commissions on both their own sales “and on sales by the downline of [IMAs] generated through their recruitment efforts.” Id. at 6. However, IMAs were “required ... to pay [Renaissance] $100 per month to receive commissions and bonuses based on recruitment of new IMAs,” R., Vol. 1, at 60 (Indictment, filed Aug. 13, 2004)—that is, IMAs had to “pay to play,” Aplee. Br. at 36. In addition, “[IMAs] who sold the Tax Relief System as a home-based business were then able to utilize the tax deductions outlined in the system.” Aplt. Opening Br. at 4. Essentially, the Renaissance network was what is known as a “pyramid scheme[].” R., Vol. 1, at 52.
Renaissance also launched the Affiliated Tax Professional Network (“ATPN”), a group of tax professionals specializing in home-based businesses who served as a resource for Renaissance customers and IMAs and offered discounted tax-preparation services to Renaissance members. “[T]o join the ATPN, a tax professional was required to ... submit a written endorsement of the Tax Relief System, pass a written exam ..., agree to provide tax services at a discounted rate to Renaissance members, and become an IMA.” Aplt. Opening Br. at 16 (citations omitted). According to Mr. Cooper, “[t]he idea behind the ATPN ... was to increase the professionalism of the company ... by putting together a group of knowledgeable and experienced tax practitioners who understood the tax laws as they relate to home[-]based business.” Id. at 17. By 2002, “Renaissance had in its possession over 2,000 written letters of endorsement from tax professionals all over the country.” Id.
Renaissance also developed a W-4 Exemption Increase Estimator tool (“W-4 Estimator”), which was used “to adjust W-4 withholdings to reflect anticipated losses when one starts a home business.” Id. at 24–25. The estimator was a “work sheet” that was “used as a tool by [IMAs] to help people adjust their [W-4s] for their newfound business deductions.” R., Vol. 3, at 373 (Trial Tr., dated Feb. 1, 2008). The tool served to help Renaissance IMAs to improperly “increase the number of exemptions” that could be claimed so that their “take home pay w[ould] increase.” Id. at 373–74. In other words, through the W-4 Estimator, Renaissance improperly “[e]mphasized the conversion of personal expenses into deductible business expenses,” R., Vol. 1, at 59, which decreased IMAs' tax liability.
Through the TRS, PTA, ATPN, and W-4 Estimator, Renaissance purported “to provide tax advice [and services] that would help individuals with home-based businesses.” Aplee. Br. at 9. However, as the company grew, it “expanded into a scheme to enable anyone associated with Renaissance [e.g., IMAs] to avoid paying taxes on their W-2 income through the use of the “W-4 Exemption Increase Estimator” and the fraudulent claim of tax deductions.” Id. Mr. Cooper's co-conspirators testified that they prepared false or fraudulent tax returns for Renaissance customers and IMAs by “ignor[ing] the tax code's requirement that only “ordinary and necessary” expenses may be included as deductions.” Id. These tax returns “overstated IMAs' personal expenses as business deductions,” and “contained excessive amounts of “expenses” with essentially no income.” Id. at 9–10. Personal expenses including vacations, ““wages”/allowance paid to children,” commuting miles, and “unreasonable percentage use of the home for business purposes” were improperly and illegally deducted as business expenses. See id. at 9–12. Several of Mr. Cooper's coconspirators also testified that the preparation of false or fraudulent tax returns and the creation of promotional tools and materials that contained false or erroneous tax advice—all of which were “consistent with the fraudulent tax advice espoused by [Mr. Cooper] and ... Renaissance,” id. at 9—were carried out despite the fact that many Renaissance affiliates had brought their concerns regarding this false advice and fraudulent activity to Mr. Cooper's attention.
Despite the red flags, the business continued to grow and accumulate more IMAs. By October 2000, Renaissance had recruited approximately 55,000 IMAs and was bringing in approximately $10 million a month.
On October 11, 2000, law enforcement agents of the Internal Revenue Service (“IRS”) and the U.S. Postal Inspection Service executed search warrants on Renaissance's warehouse, headquarters, accounting center, call and mailing operations center, and on Mr. Cooper's safe deposit box, as well as seizure warrants on various bank and investment accounts associated with Mr. Cooper and Renaissance. As the investigation progressed over the next two months, several additional seizure warrants were authorized and executed on various accounts associated with the company and Mr. Cooper. Finally, in April 2001, a search warrant was authorized and executed on Mr. Cooper's residence in Topeka, Kansas.
PROCEDURAL HISTORY
On August 13, 2004, a grand jury returned a 148-count indictment naming Mr. Cooper, Renaissance, and co-conspirators Jesse Ayala Cota, Todd Eugene Strand, and Daniel Joe Gleason. Mr. Cota, who is a former IRS employee, was Renaissance's “national tax director from June 1999 until after the government raids [in 2000],” Aplt. Opening Br. at 5, and managed the company's “Tax Dream Team” from July 1999 through May 2001, R., Vol. 1, at 50. 2 Mr. Strand—whom the government described as Mr. Cooper's “right-hand man”—was Renaissance's “Vice-President of Marketing,” id., and “national marketing director from the inception of the company until after the October 2000 raids,” Aplt. Opening Br. at 5. Mr. Gleason was Renaissance's “national tax director from March 1998 until mid-1999.” Id. As the national tax director, Mr. Gleason also served as the “Director of the Tax [Dream] Team.” R., Vol. 1, at 50.
The indictment alleged that Renaissance was a fraudulent pyramid scheme, and that Mr. Cooper and his co-conspirators had conspired to defraud the IRS, Renaissance customers, and IMAs through the company's false tax material and fraudulent operations (e.g., the preparation of false tax returns for IMAs). Specifically, the indictment charged Mr. Cooper with: one count of conspiracy to defraud (by impeding the functions of the IRS in computing and collecting taxes, committing mail fraud, and committing wire fraud), in violation of 18 U.S.C. § 371 (Count 1); fifty-six counts of assisting in the preparation of false tax returns, in violation of 26 U.S.C. § 7206(2) and 18 U.S.C. § 2 (Counts 2–57); thirty-six counts of mail fraud, in violation of 18 U.S.C. §§ 1341 and 2 (Counts 58–93); eleven counts of wire fraud, in violation of 18 U.S.C. §§ 1343 and 2 (Counts 94–104); one count of conspiracy to launder money, in violation of 18 U.S.C. § 1956(h) (Count 105); forty-one counts of engaging in monetary transactions in property derived from unlawful activity, in violation of 18 U.S.C. §§ 1957 and 2 (Counts 106–46); and two counts of money laundering, in violation of 18 U.S.C. §§ 1956(a)(1)(B)(I) and 2 (Counts 147–48).
On December 7, 2006, the grand jury returned a 148-count superseding indictment. The superseding indictment “removed some sentencing guideline enhancements, corrected some typographical errors, and removed Dan Gleason, who had by that time entered into a plea agreement with the government, as a named defendant.” Aplt. Opening Br. at 2 (citation omitted). However, the superseding indictment did not add to, remove, or otherwise alter the charges brought against Mr. Cooper.
Prior to trial, Mr. Cooper filed a motion to suppress, arguing that the searches and seizures executed with regard to Mr. Cooper and Renaissance violated the Fourth Amendment. 3 More specifically, Mr. Cooper's motion “challenge[d] the searches and seizures executed against [him] and [Renaissance] on October 11, 2000[,] on the grounds that the warrant affidavits lacked probable cause [and] the search warrants were overbroad,” and challenged “[t]he remaining seizures ... as fruit of the poisonous tree,” as well as “all other evidence obtained through or as a result of the unconstitutional seizures.” R., Vol. 1, at 137 (Reply Mem. in Supp. of Mot. to Suppress, filed Sept. 22, 2006) (citations omitted). 4 In the event that the court concluded that the “affidavits and warrants survive[d] constitutional scrutiny on their face,” Mr. Cooper's motion requested “a hearing pursuant to Franks v. Delaware, 438 U.S. 154 (1978)[,] for the purpose of establishing that the “facts” and assertions in the affidavits ... were false, and were made by the agents in knowing and reckless disregard of their falsehood.”Id. at 135–36.
The district court orally denied Mr. Cooper's motion to suppress at a hearing held on November 20, 2006. First, the court concluded that the search warrants were supported by probable cause because the “affidavits state facts, not just conclusions, and provided the magistrates with the opportunity to make an independent evaluation of the allegedly false and misleading claims,” and the “[f]acts set forth in the affidavits support the magistrates' findings that there was a fair probability that warrants would uncover evidence of tax and mail fraud.” R., Vol. 2, at 54 (Mot. Hr'g Tr., dated Nov. 20, 2006). 5 Second, the court rejected Mr. Cooper's argument that the warrants violated the Fourth Amendment's particularity requirement because they were overbroad, having found that the warrants were “sufficiently limited and specific in view of the crimes that were being investigated.”Id. at 55. Finally, the court denied Mr. Cooper's request for a Franks hearing on account of his failure to “ma[ke] a substantial preliminary showing that the agents knowingly or recklessly withheld information from the magistrates or that the allegedly false statements were necessary to the finding of probable cause.” Id. at 56. Mr. Cooper then filed a motion asking the court to reconsider its denial of a Franks hearing, which the district court denied.
Mr. Cooper's co-defendants—Mr. Cota, Mr. Strand, and Mr. Gleason—all pleaded guilty and testified at Mr. Cooper's trial pursuant to their cooperation agreements. Mr. Cooper moved for judgment of acquittal under Federal Rule of Criminal Procedure 29 both after the government rested, see R., Vol. 4, at 91–92 (Trial Tr., dated Feb. 14, 2008) (“[T]he defense would move for judgment of acquittal on all counts in the superseding indictment.”), and after the close of all the evidence, see id. at 639 (“I would like to renew my motion for judgment of acquittal at this time.”). The district court denied both motions.
On February 28, 2008, the jury returned a verdict convicting Mr. Cooper on the one count of conspiracy to defraud (Count 1), seventeen of the thirty-six counts of mail fraud (Counts 58–61, 66, 68–69, 74, 76, 78–79, 83, 87–88, 91–93), all eleven counts of wire fraud (Counts 94–104), the one count of conspiracy to launder money (Count 105), all forty-one counts of engaging in monetary transactions in property derived from unlawful activity (Counts 106–46), and both counts of money laundering (Counts 147–48). The jury acquitted Mr. Cooper of all fifty-six counts of assisting in the preparation of false tax returns (Counts 2–57), and nineteen of the thirty-six counts of mail fraud (Counts 62–65, 67, 70–73, 75, 77, 80–82, 84–86, 88–90).
Mr. Cooper again renewed his motion for judgment of acquittal after the jury returned its verdict. 6 Mr. Cooper's motion—filed without a supporting brief—was a general motion for judgment of acquittal. However, Mr. Cooper filed a reply brief in support of his motion that significantly limited his contentions, at least arguably transforming his motion from a general one into a specific one. In particular, Mr. Cooper limited his motion to challenging the sufficiency of the evidence only as to Count 1—the count for conspiracy to defraud—reasoning that the government had “failed to prove a criminal conspiracy as alleged in Count One,” and that “if the evidence was insufficient to convict [Mr.] Cooper on Count One, all of the other convictions must be vacated as well.” R., Vol. 1, at 435, 446. In other words, Mr. Cooper's reply brief made clear that his motion pertained solely to the count for conspiracy to defraud, because each of the additional counts “depend[ed] upon the validity of the guilty verdict on Count One.” Id. at 434–35. Mr. Cooper raised no independent challenge in his reply brief to the sufficiency of the evidence on the remaining counts of conviction.
The district court denied Mr. Cooper's motion, holding that the “evidence was sufficient for the jury to find that defendant knowingly and voluntarily entered into an agreement with his coconspirators to defraud the United States and commit wire and mail fraud as alleged in count 1.” R., Vol. 1, at 452. Because Mr. Cooper's “challenge to the remaining convictions [wa]s dependant on his argument that there [wa]s insufficient evidence to convict him on count 1,” the court also held there was sufficient evidence to support those convictions. Id.
On June 17, 2009—more than fifteen months after the jury returned its verdict—the government sent Mr. Cooper discovery indicating that Mr. Gleason “was engaging in ongoing frauds against the government and the public from before the time of his guilty plea in this case and continuing through and after the trial.” Aplt. Opening Br. at 32. “[T]his additional information was several hundred pages of documents generated by the IRS ... as part of [its] efforts to collect a $2.4 million tax debt owed by [Mr.] Gleason, which ... established [that Mr.] Gleason submitted false information to the IRS ... and attempted to evade payment of his tax debt.” Aplee. Br. at 25. More specifically, these discovery documents demonstrated that Mr. Gleason had engaged in fraudulent activity that included providing the IRS with false information about his income, concealing bank accounts, falsely encumbering assets, titling his businesses in the names of relatives, funneling income through accounts held in relatives' names, filing fraudulent and frivolous IRS forms, and making false claims via the Internet.
Based on this discovery disclosure, Mr. Cooper filed a motion for a new trial under Federal Rule of Criminal Procedure 33(b), arguing that the government violated Brady v. Maryland, 373 U.S. 83 (1963), by failing to disclose this impeachment evidence. See Brady, 373 U.S. at 87 (holding that “suppression by the prosecution of evidence favorable to an accused ... violates due process where the evidence is material either to guilt or to punishment, irrespective of the good faith or bad faith of the prosecution”); see also Giglio v. United States, 405 U.S. 150, 154 (1972) (“When the “reliability of a given witness may well be determinative of guilt or innocence,” nondisclosure of evidence affecting credibility falls within th[e] general [Brady] rule.” (quoting Napue v. Illinois, 360 U.S. 264, 269 (1959))). At the hearing on Mr. Cooper's motion for a new trial, the government conceded that it had suppressed the evidence and that the evidence was favorable to Mr. Cooper; therefore, the only issue before the district court was whether this evidence was “material.” See R., Vol. 4, at 780 (Mots. Hr'g Tr., dated Mar. 9, 2010) (“The government concedes that the court could find that the prosecution suppressed the evidence and that the evidence is favorable to defendant. Thus, the court need only to determine whether the evidence was material.”). Mr. Cooper argued that the suppressed evidence was “material” because “[Mr.] Gleason was a key government witness ..., the suppressed discovery reveals that [Mr.] Gleason gave perjured testimony at trial,” R., Vol. 1, at 456, and “had the evidence been disclosed to the defense prior to trial, the government never would have presented [Mr.] Gleason as a witness,” id. at 455.
The district court denied Mr. Cooper's motion, having concluded that there was “no reasonable probability that the evidence would have affected the fairness of defendant's trial.” R., Vol. 4, at 781; accord id. at 785 (“In this case, the favorable evidence could not reasonably be taken to put the whole case in such a different light as to undermine confidence in the verdict.”). Mr. Gleason's testimony, the court explained, was neither “material” nor “critical” because it “was merely cumulative evidence of defendant's illegal activities.” Id. at 783. Consequently, “because it [wa]s [merely] cumulative,” this “newly disclosed evidence insignificantly impact[ed] the degree of [Mr. Gleason's] impeachment.” Id. at 785.
On April 20, 2010, the district court sentenced Mr. Cooper to 240 months' imprisonment. This timely appeal followed.
DISCUSSION
I. Motion for Judgment of Acquittal: Sufficiency of the Evidence to Support Mr. Cooper's Convictions
Mr. Cooper first claims that “[t]he evidence adduced at trial was insufficient to convict [him] of the charged offenses.” Aplt. Opening Br. at 35. He avers that there was insufficient evidence of an agreement to violate the law to support his conviction of conspiracy to defraud (Count 1). Mr. Cooper also argues that the government presented insufficient evidence of a “scheme or artifice to defraud” to support the seventeen mail fraud convictions (Counts 58–61, 66, 68–69, 74, 76, 78–79, 83, 87–88, 91–93) and eleven wire fraud convictions (Counts 94–104). Finally, Mr. Cooper argues that his remaining convictions were also supported by insufficient evidence, as these convictions derived from the conspiracy to defraud and mail and wire fraud convictions.
A. Standard of Review
We review challenges to the sufficiency of the evidence and denials of motions for judgment of acquittal de novo.United States v. Delgado-Uribe , 363 F.3d 1077, 1081 (10th Cir. 2004). In so doing, we must examine “whether “viewing the evidence in the light most favorable to the Government, any rational trier of fact could have found the defendant guilty of the crime beyond a reasonable doubt.””Id. (quoting United States v. Vallo, 238 F.3d 1242, 1246–47 (10th Cir. 2001)). However, we do not weigh conflicting evidence or consider witness credibility,id. , and the fact that prosecution and defense witnesses presented conflicting or differing accounts at trial does not necessarily render the evidence insufficient,see United States v. Shaffer , 472 F.3d 1219, 1223 (10th Cir. 2007) (“[T]he jury was free to credit Special Agent Zimmer's testimony and discredit Mr. Shaffer's.”); see also United States v. Denny, 48 F. App'x 732, 736 (10th Cir. 2002) (stating that evidence is not rendered insufficient merely because the “government and defense witnesses gave differing accounts at trial”).
B. Conspiracy to Defraud Conviction (Count 1)
To convict a defendant of conspiracy under 18 U.S.C. § 371, the government must prove that: “(1) there was an agreement to violate the law, (2) the defendant knew the essential objective of the conspiracy, (3) the defendant knowingly and voluntarily participated in the conspiracy, (4) an overt act was committed in furtherance of the conspiracy, and (5) the coconspirators were interdependent.” United v. Bedford, 536 F.3d 1148, 1156 [102 AFTR 2d 2008-5722] (10th Cir. 2008);accord United States v. Nall , 949 F.2d 301, 305 (10th Cir. 1991). 7 Mr. Cooper argues that the government failed to present evidence establishing the first element of conspiracy, an agreement to violate the law, because “none of [Mr.] Cooper's alleged co-conspirators—Cota, Strand, Gleason, Ruth, and Steelman—testified that they entered an illegal agreement with [Mr.] Cooper.” Aplt. Opening Br. at 38. He insists that “each alleged co-conspirator testified to the exact contrary.” Id.
Testimony by a co-conspirator that an illegal agreement was expressly entered into is not required to establish a conspiracy in this context. Rather, “[a]n agreement “may be inferred from the facts and circumstances of the case,”” United States v. Sells, 477 F.3d 1226, 1236 (10th Cir. 2007) (quoting United States v. Evans, 970 F.2d 663, 669 (10th Cir. 1992)); in other words, the agreement requirement may be satisfied entirely through circumstantial evidence, see, e.g., United States v. Whitney, 229 F.3d 1296, 1301 (10th Cir. 2000) (stating that an agreement “may be inferred entirely from circumstantial evidence”). Moreover, the jury is empowered to make credibility assessments: “resolution of conflicting evidence is exclusively within the discretion of the jury, as the trier of fact, and its verdict must be given added weight when the opportunity to hear and observe the witnesses is considered.”United States v. Vigil , 743 F.2d 751, 752 (10th Cir. 1984). Thus, a jury is free to discredit any evidence contradicting the existence of an agreement.
In support of its contention that an agreement existed between Mr. Cooper and his co-conspirators, the government points to evidence and testimony demonstrating, inter alia: (1) that Renaissance “expanded into a scheme to enable anyone associated with Renaissance to avoid paying taxes on their W-2 income ... and [to] fraudulent[ly] claim ... tax deductions” by ignoring the “ordinary and necessary” expenses requirement in the tax code, Aplee. Br. at 9; (2) that Mr. Cooper repeatedly offered false tax advice to promote Renaissance, despite the fact that many of his co-conspirators had brought concerns about the fraudulent nature of the business to his attention; (3) that the co-conspirators prepared false or fraudulent tax returns for IMAs, which were consistent with the fraudulent tax advice espoused by Mr. Cooper and Renaissance; and (4) that Renaissance's business continued to flourish, despite the fact that the conspirators—including Mr. Cooper—knew that the company's tax advice was false and that its tax work was fraudulent. On the basis of the foregoing evidence (among other evidence)— viewed in the light most favorable to the government—we conclude that a rational jury could have found that an agreement existed between Mr. Cooper and his coconspirators to violate the law. Accordingly, we conclude that the government presented sufficient evidence to support Mr. Cooper's conviction under Count 1 for conspiring to defraud.
C. Mail Fraud and Wire Fraud Convictions (Counts 58–61, 66, 68–69, 74, 76, 78–79, 83, 87–88, 91–93)
Next, Mr. Cooper argues that “the government failed to prove its contention that the Renaissance business was a scheme or artifice to defraud customers and [IMAs],” Aplt. Opening Br. at 39—in other words, he contends that the evidence it presented regarding the mail and wire fraud charges (Counts 58 through 104) was insufficient. “The elements of federal mail fraud as defined in 18 U.S.C. § 1341 are (1) a scheme or artifice to defraud or obtain property by means of false or fraudulent pretenses, representations, or promises, (2) an intent to defraud, and (3) use of the mails to execute the scheme.” United States v. Welch, 327 F.3d 1081, 1104 (10th Cir. 2003). “The first and second elements of federal mail and wire fraud are identical. The third element of wire fraud as defined in 18 U.S.C. § 1343 is the use of interstate wire or radio communications to execute the scheme”—that is, “the use of interstate wire or radio communications,” instead of “the mails,” to “execute the scheme.” Id. (footnote omitted). “One may “defraud” another within the meaning of §§ 1341 and 1343 by depriving another of property or “the intangible right of honest services.”” Id. (quoting 18 U.S.C. § 1346). Mr. Cooper insists that the first element of the mail and wire fraud charge—“a scheme or artifice to defraud or obtain property by means of false or fraudulent pretenses, representations, or promises”—was not satisfied here. Instead, he contends that “the evidence adduced at trial overwhelmingly established that Renaissance not only was a legitimate company, but one dedicated to achieving both excellence in its product and consistency and professionalism in its IMA sales force and affiliate network.” Aplt. Opening Br. at 39.
1. Forfeiture
“[I]f a defendant files a general motion for acquittal that does not identify a specific point of attack, the defendant is deemed to be challenging the sufficiency of each essential element of the government's case ....”United States v. Kelly , 535 F.3d 1229, 1234–35 (10th Cir. 2008). On the other hand, “[w]hen a defendant challenges in district court the sufficiency of the evidence on specific grounds, all grounds not specified in the motion are waived,” id. at 1234 (quotingUnited States v. Goode , 483 F.3d 676, 681 (10th Cir. 2007)) (internal quotation marks omitted)—or, to be more precise, forfeited, see Goode, 483 F.3d at 681 (“When a defendant challenges in district court the sufficiency of the evidence on specific grounds, “all grounds not specified in the motion are waived.” Although we have described the failure to raise a challenge in district court as a “waiver,” it is more precisely termed a forfeiture when there is no suggestion of a knowing, voluntary failure to raise the matter.” (citations omitted) (quoting United States v. Kimler, 335 F.3d 1132, 1141 (10th Cir. 2003))); 2A Charles Alan Wright & Peter J. Henning, Federal Practice and Procedure: Criminal § 469 at 388 (4th ed. 2009) (“[I]f the defendant has asserted specific grounds in the trial court as the basis for a motion for acquittal, he or she cannot assert other grounds on appeal.”);see also Richison v. Ernest Group, Inc. , 634 F.3d 1123, 1127–28 (10th Cir. 2011) (“If the theory was intentionally relinquished or abandoned in the district court, we usually deem it waived and refuse to consider it. By contrast, if the theory simply wasn't raised before the district court, we usually hold it forfeited.” (citations omitted)).
The rigorous plain-error standard governs our review of such forfeited claims. That is, we “review for plain error where a defendant appeals the sufficiency of the evidence based upon an argument that he failed to make or reaffirm before the district court.” United States v. Gallant, 537 F.3d 1202, 1223 (10th Cir. 2008) (emphasis added);see also Kimler , 335 F.3d at 1141 (“[B]ecause Kimler is deemed to have waived this issue, we will not address it on appeal “except for a review for plain error resulting in manifest injustice.”” (quotingUnited States v. Chavez-Marquez , 66 F.3d 259, 261 (10th Cir. 1995))). Under the plain error standard, Mr. Cooper must demonstrate: “(1) an error, (2) that is plain, which means clear or obvious under current law, and (3) that affects substantial rights. If he satisfies these criteria, this Court may exercise discretion to correct the error if [4] it seriously affects the fairness, integrity, or public reputation of judicial proceedings.” Goode, 483 F.3d at 681 (quoting Kimler, 335 F.3d at 1141) (internal quotation marks omitted).
As previously discussed, Mr. Cooper renewed his motion for judgment of acquittal post-verdict, asserting that “[w]ith respect to each count of conviction in this case, the government failed to prove the defendant's guilt beyond a reasonable doubt.” R., Vol. 1, at 403. This post-verdict general motion for judgment of acquittal was filed without a brief. In Mr. Cooper's reply brief in support of his post-verdict motion, however, he specifically limited the motion to challenging the sufficiency of the evidence only as to the count for conspiracy to defraud (Count 1), arguing that the government “failed to prove a criminal conspiracy as alleged in Count One,” and that “if the evidence was insufficient to convict [Mr.] Cooper on Count One, all of the other convictions must be vacated as well.” R., Vol. 1, at 435, 446. That is, his reply brief made clear that his motion—which previously purported to serve as a general motion challenging all counts of conviction—was focused solely upon the count for conspiracy to defraud. Id. at 434–35. Although he asserted in his reply brief that the remaining counts “depend[ed] upon the validity of the guilty verdict on Count One,” id., and therefore would fail if Count 1 failed, Mr. Cooper did not raise or reaffirm any independent challenge to the sufficiency of the evidence on the remaining counts.
Under these circumstances, Mr. Cooper has arguably forfeited his challenge to the sufficiency of the evidence on his remaining counts of conviction—that is, forfeited any independent challenge to the sufficiency of the evidence regarding his mail and wire fraud counts. Despite the fact that he had previously filed a general motion for judgment of acquittal, Mr. Cooper's restrictive representations in his reply brief could be construed, at least arguably, as transforming his general motion into a specific one, focused only on Count 1. If we were to conclude that Mr. Cooper has forfeited any challenge to the sufficiency of the evidence on his mail and wire fraud convictions, “we w[ould] not address [those convictions] on appeal “except for a review for plain error resulting in manifest injustice.””Kimler , 335 F.3d at 1141 (quotingChavez-Marquez , 66 F.3d at 261)).
However, we need not definitively opine on whether Mr. Cooper's challenges to his mail and wire fraud convictions should be assessed under the stringent plain-error standard, because even under the more-lenient de novo standard, we conclude that there was no error. That is, we conclude that there was sufficient evidence to satisfy the only challenged element of the mail and wire fraud charges—i.e., a scheme to defraud.
2. Sufficiency of the Evidence
Viewed in the light most favorable to the government, the evidence presented at trial is sufficient to support Mr. Cooper's mail and wire fraud convictions. First, the testimonial evidence supporting the existence of a conspiracy to defraud under Count 1, discussed supra, supports the existence of a scheme or artifice to defraud Renaissance customers and the IRS. Furthermore, the government points to additional evidence that Mr. Cooper transmitted false, fraudulent, or misleading information by mail and wire “to recruit IMAs or encourage IMAs to continue their participation in Renaissance, which meant the defendant ultimately continued to receive their $100 monthly payments [from IMAs].” Aplee. Br. at 17;see id. at 16–17 (citing documentary evidence presented at trial—such as “a 1998 version of the TRS containing all of the misleading information on the audio-cassette tapes about the application of the [fraudulent] deductions for the home-based business” and other “promotional materials” used to further the fraudulent scheme—which were sent through the “mail or interstate wire communication facilities”); id. at 14 (providing an overview of the “Renaissance Info Pak”—a promotional tool distributed through the mail—which contained several “false, fraudulent, or misleading” statements aimed at bringing in new IMAs). Viewed in the light most favorable to the government, this evidence (among other evidence presented at trial) was sufficient to support a finding of a scheme or artifice to defraud. Accordingly, even assuming, arguendo, that the issue is not forfeited, we nevertheless conclude that the government presented sufficient evidence supporting Mr. Cooper's convictions of mail and wire fraud.
D. Sufficiency of the Evidence of Other Convictions
On appeal, Mr. Cooper roots his challenge to the sufficiency of the evidence of his convictions of conspiracy to launder money, engaging in monetary transactions in property derived from unlawful activity, and money laundering (Counts 105 through 148) solely in the claimed insufficiency of the evidence of his convictions of conspiracy to defraud and mail and wire fraud. Mr. Cooper argues that because the evidence supporting the conspiracy to defraud and mail and wire fraud convictions is insufficient, “[t]he money laundering conspiracy and substantive money laundering charges, which are expressly dependent on [those] counts, must then be reversed as well.” Aplt. Opening Br. at 38 (citations omitted). Because Mr. Cooper's challenges to the sufficiency of the evidence of his conspiracy to defraud and mail and wire fraud convictions fail, his challenges to the sufficiency of the evidence of his other convictions likewise fail.
II. Motion for New Trial: Materiality of Suppressed Impeachment Evidence
Mr. Cooper next challenges the district court's denial of his motion for a new trial, arguing that the district court erred in determining that the suppressed impeachment evidence and Mr. Gleason's substantive testimony were cumulative. This court reviews de novo claims that the prosecution violatedBrady by failing to disclose material exculpatory evidence, “including the determination of whether suppressed evidence was material.” United States v. Hughes, 33 F.3d 1248, 1251 (10th Cir. 1994).
Under Brady, “the suppression by the prosecution of evidence favorable to an accused upon request violates due process where the evidence is material either to guilt or to punishment, irrespective of the good faith or bad faith of the prosecution.” United States v. Smith, 534 F.3d 1211, 1221 (10th Cir. 2008) (quotingBrady , 373 U.S. at 87) (internal quotation marks omitted). “Impeachment evidence is exculpatory forBrady purposes.” Id. at 1222 (citingUnited States v. Bagley , 473 U.S. 667, 676 (1985)).
A defendant seeking a new trial based on a Brady violation “must show that (1) the prosecution suppressed evidence, (2) the evidence was favorable to the defendant, and (3) the evidence was material.” United States v. Torres, 569 F.3d 1277, 1281 (10th Cir. 2009) (quotingUnited States v. Velarde , 485 F.3d 553, 558 (10th Cir. 2007)) (internal quotation marks omitted). As discussed above, the government conceded that the first two elements are met in this case; that is, that it suppressed favorable impeachment evidence that Mr. Gleason was engaged in fraudulent activity throughout the trial, including providing the IRS with false information about his income, concealing bank accounts, falsely encumbering assets, titling his businesses in the names of relatives, funneling income through accounts held in relatives' names, filing fraudulent and frivolous IRS forms, and making false claims via the Internet. Therefore, the only issue presented is whether the impeachment evidence at issue was material.
“[E]vidence is material only if there is a reasonable probability that, had the evidence been disclosed to the defense, the result of the proceeding would have been different. A reasonable probability is a probability sufficient to undermine confidence in the outcome.” Id. at 1282 (alteration in original) (quoting Bagley, 473 U.S. at 682 (Blackmun, J., concurring)) (internal quotation marks omitted). “The critical question is whether the lack of impeachment evidence shakes our confidence in the guilty verdict.” Smith, 534 F.3d at 1223. “To make the materiality determination, we view the suppressed evidence's significance in relation to the record as a whole.”Hughes , 33 F.3d at 1252. “What might be considered insignificant evidence in a strong case might suffice to disturb an already questionable verdict.”Torres , 569 F.3d at 1282 (quoting United States v. Robinson, 39 F.3d 1115, 1119 (10th Cir. 1994)) (internal quotation marks omitted).
A. Cumulative Impeachment Evidence
Mr. Cooper acknowledges that his cross-examination of Mr. Gleason at trial “establish[ed] that he testified falsely on direct about falsifications of his resume and about the substance of much of the tax advice that he provided to Renaissance.” Aplt. Opening Br. at 41. However, despite the fact that he successfully impeached Mr. Gleason on the stand, Mr. Cooper argues that the impeachment evidence drawn out at trial concerned “the distant past,” while the suppressed evidence “would have allowed the defense to show that at that very moment—while testifying as a government witness—[Mr.] Gleason was executing an extensive scheme to defraud the government.” Id. Thus, according to Mr. Cooper, the suppressed evidence is not cumulative because it “would have opened an entirely new line of cross-examination.” Id. at 42.
Where evidence “insignificantly impact[s] the degree of impeachment,” it generally will “not be sufficient to meet the ... materiality standard.”Douglas v. Workman , 560 F.3d 1156, 1174 (10th Cir. 2009). For example, where the credibility of a witness “has already been substantially called into question in the same respects by other evidence, additional impeachment evidence will generally be immaterial and will not provide the basis for aBrady claim.” Nuckols v. Gibson, 233 F.3d 1261, 1267 n.8 (10th Cir. 2000) (quoting Tankleff v. Senkowski, 135 F.3d 235, 251 (2d Cir. 1998)) (internal quotation marks omitted). Furthermore, we have indicated that “an incremental amount of impeachment evidence on an already compromised witness does not amount to material evidence.”United States v. Trujillo , 136 F.3d 1388, 1394 (10th Cir. 1998) (citing United States v. Derr, 990 F.2d 1330, 1336 (D.C. Cir. 1993)). Accordingly, we have “discarded as immaterial ... undisclosed impeachment evidence where it was cumulative of evidence of bias or partiality already presented “and thus would have provided only marginal additional support for [the] defense.””Douglas , 560 F.3d at 1174 (alteration in original) (quoting Trujillo, 136 F.3d at 1394).
In contrast, suppressed evidence that “significantly enhanc[es] the quality of the impeachment evidence usually will” satisfy the materiality standard.Douglas , 560 F.3d at 1174. For example, “[e]vidence that provides a new basis for impeachment is not [considered] cumulative and could well be material.” United States v. Robinson, 583 F.3d 1265, 1273 (10th Cir. 2009) (quoting United States v. Wilson, 481 F.3d 475, 480 (7th Cir. 2007)) (internal quotation marks omitted). “Merely because other impeachment evidence was presented does not [necessarily] mean that additional impeachment evidence is cumulative ....”Torres , 569 F.3d at 1284.
Contrary to Mr. Cooper's assertions, the evidence suppressed here does not provide an entirely new basis for impeachment. The suppressed evidence—which Mr. Cooper characterizes as showing that Mr. Gleason “was executing an extensive scheme to defraud the government,” Aplt. Opening Br. at 41—would provide an impeachment avenue by which to establish that Mr. Gleason is a liar and a tax cheat. But, as noted, Mr. Cooper concedes that he already “was able to establish that [Mr. Gleason] testified falsely on direct about falsifications of his resume and about the substance of much of the [fraudulent] tax advice that he provided to Renaissance.” Id. The evidence available to Mr. Cooper at trial and the suppressed evidence both impeach Mr. Gleason's credibility by suggesting that he is a dishonest person. Therefore, the suppressed evidence regarding Mr. Gleason would have “insignificantly impact[ed] the degree of impeachment,” and “would have provided only marginal additional support for [the] defense.”Douglas , 560 F.3d at 1174 (second alteration in original) (quoting Trujillo, 136 F.3d at 1394) (internal quotation marks omitted). This does not satisfy the materiality standard.
The cases in which this court has found that a new basis for impeachment existed generally involved a much starker contrast between the available and suppressed impeachment evidence. InRobinson , the defendant was able to cross-examine a confidential informant “on his criminal history, the payments he received from the [Bureau of Alcohol, Tobacco, Firearms, and Explosives (“ATF”)], and the ATF's intervention on his behalf following “scrape[s]” with the law,” 583 F.3d at 1269 (second alteration in original), but the suppression of the confidential informant's medical records left the defendant unable “to argue that the [confidential informant's] drug use, mental health problems, and use of prescription drugs at the time of trial affected his testimony,” id. at 1273. InNuckols , the suppressed evidence “would have provided the defense with the opportunity to call into question whether [the witness] had a motive for his testimony” and “could also have been used to question whether [the witness] had a motive to goad Mr. Nuckols into waiving his right to counsel during the interrogation and confessing to the crime.” 233 F.3d at 1267. Similarly, theDouglas court held that there was “a reasonable probability the result of [the defendant's] trial would have been different if the defense had had the ability to impeach [the witness] with evidence of the deal the prosecution made in exchange for his testimony,” where “[the defendant's] counsel attempted to impeach [the witness] on the issue of his motive to testify, [but] was stonewalled by [the witness's] repeated denials of the existence of a deal.” 560 F.3d at 1175. 8
In contrast, the relationship between the available and suppressed impeachment evidence here is similar to that in cases in which this court has concluded that the suppressed evidence was merely cumulative. In Trujillo, the government witness “testified on direct examination [that] he had three prior felony convictions and was testifying against Mr. Trujillo as a result of a plea agreement ... [and] further admitted to using cocaine and being a car thief.” 136 F.3d at 1394. We rejected Mr. Trujillo's argument that the suppressed evidence was “of a different type and magnitude than that presented at trial because it contained statements inconsistent with [the witness's] trial testimony and went beyond the potential motive and bias implicit in [the witness's] plea agreement.” Id. Although “we acknowledge[d] [that] there may be a difference in the degree to which [the witness] could have been impeached [by the suppressed evidence] ..., we fail[ed] to see any meaningful difference in the type of impeachment evidence [that was] available to the defense.” Id. “The jury,” we concluded, “was well aware of [the witness's] criminal propensities and motive for testifying ....”Id. ; see United States v. Page, 808 F.2d 723, 726, 730, 732–33 (10th Cir. 1987) (concluding that suppressed evidence that the witness had been arrested was cumulative where he had seven felony convictions, and that testimony concerning whether certain payments were bribes was cumulative where checks were introduced into evidence and other witnesses testified on this issue). In this case, due to the impeachment evidence displayed at trial on cross-examination, the jury was well aware that Mr. Gleason was a dishonest person, and equally aware that he had been involved in fraudulent tax activity. Furthermore, as discussed infra, because Mr. Gleason's testimony was itself cumulative, he was not a critical witness for the prosecution.
In the end, because the impeachment evidence was merely cumulative, we are not convinced that the government's suppression undermines confidence in the outcome of Mr. Cooper's trial. See Trammell v. McKune, 485 F.3d 546, 552 (10th Cir. 2007) (“We need to be convinced only that “the government's evidentiary suppression undermines confidence in the outcome of the trial.”” (quoting Kyles v. Whitley, 514 U.S. 419, 434 (1995))). Accordingly, we conclude that the impeachment evidence suppressed here was not material.
B. Cumulative Witness Testimony
Mr. Cooper also contends that the district court erred when it concluded that Mr. Gleason's testimony was itself cumulative. Mr. Cooper argues that Mr. Gleason “was a unique witness due to his position with Renaissance and the scope of services that he provided.” Aplt. Opening Br. at 42. Mr. Cooper further argues that in contrast to his other co-defendants, whose “testimony as a whole was favorable to him and to the company, its objectives, and its product,” Mr. Gleason “provided testimony that was generally and pervasively hostile.”Id. at 43. The government responds that Mr. Gleason's testimony was not essential to Mr. Cooper's convictions because Mr. Gleason “was one of several tax return preparers who acknowledged preparing false or fraudulent tax returns in furtherance of the Renaissance scheme” and “was only one of several coconspirators who had specifically drawn the defendant's attention to faults with the Renaissance scheme, and the defendant chose to ignore the advice and information from each.” Aplee. Br. at 27–28.
In instances where we have concluded that the allegedly suppressed impeachment evidence was material, we have stressed that the witness being impeached was absolutely critical to the government's case. See Robinson, 583 F.3d at 1271 (“[H]is testimony was central—indeed essential—to the government's case.... It is not a stretch to say that the guilty verdict in this case depended upon the [confidential informant's] testimony.”);Douglas , 560 F.3d at 1175 (“[The witness] was an indispensable witness for the State's case against [the defendant].... Because impeachment of the witness who held the key to the successful prosecution of [the defendant] was denied to the defense, the district court correctly concluded that the State's Brady violations were material.”); Nuckols, 233 F.3d at 1266 (“[The witness's] trial testimony was key to a successful prosecution.... If [the witness's] testimony that Mr. Nuckols initiated the interrogation were impeached, the entire support for the State's case would have been significantly undermined, if not destroyed altogether.”).
A review of the evidence here demonstrates that Mr. Gleason—although an important witness—was not a crucial orcritical witness to the government's case because several other co-conspirators provided commensurate testimony. As the district court stated: “[Mr.] Gleason was not the sole tax return preparer to testify that false or fraudulent tax returns were filed with the IRS as a result of Renaissance's activities.” R., Vol. 4, at 781. For example, “[Mr.] Steelman ..., [Ms.] Ruth[,] and [Ms.] Crotts testified that the fraudulent tax returns they prepared for Renaissance [IMAs] ... were consistent with the false tax advice provided by [Mr. Cooper] and Renaissance,”id. , and “multiple co-conspirators testified at trial that they raised concerns about the false tax advice to [Mr. Cooper],” id. at 782. This point is underscored by our precedent; as a witness, Mr. Gleason was not as unique and critical as the government's witnesses inRobinson, Douglas, Nuckols , and Torres. In light of the foregoing, we conclude the district court was correct in concluding that “[Mr.] Gleason's testimony was merely cumulative evidence of [Mr. Cooper's] illegal activities.” Id. at 783. Consequently, the suppressed impeachment evidence regarding Mr. Gleason was not material.
III. Motion to Suppress: Validity of Warrants
Mr. Cooper argues that the district court erred in denying his motion to suppress because the warrants were issued without probable cause. Additionally, he argues that the district court erred in denying his motion to suppress because the warrants were insufficiently particular. 9 Lastly, Mr. Cooper argues that the district court should have held an evidentiary hearing under Franks v. Delaware.
When reviewing the denial of a motion to suppress based on alleged Fourth Amendment violations, this court
consider[s] the totality of the circumstances and view[s] the evidence in a light most favorable to the government. We accept the district court's factual findings unless those findings are clearly erroneous. The credibility of witnesses, the weight to be given evidence, and the reasonable inferences drawn from the evidence fall within the province of the district court. Keeping in mind that the burden is on the defendant to prove that the challenged search was illegal under the Fourth Amendment, the ultimate determination of reasonableness under the Fourth Amendment is a question of law reviewable de novo.
United States v. Higgins, 282 F.3d 1261, 1269 (10th Cir. 2002) (quoting United States v. Gordon, 168 F.3d 1222, 1225 (10th Cir. 1999)) (internal quotation marks omitted). We conclude that the search warrants complied with the dictates of the Fourth Amendment, and we therefore hold that the district court did not err in denying Mr. Cooper's motion to suppress. We also hold that Mr. Cooper was not entitled to an evidentiary hearing under Franks. 10
A. Probable Cause
In support of his motion to suppress, Mr. Cooper first asserts that the “warrants ... were lacking in probable cause,” and therefore did not comply with the Fourth Amendment. Aplt. Opening Br. at 36. In determining whether a search warrant is supported by probable cause, this court “reviews the sufficiency of the affidavit upon which a warrant is issued by looking at the totality of the circumstances and simply ensuring “that the magistrate had a substantial basis for concluding that probable cause existed.”” United States v. Tisdale, 248 F.3d 964, 970 (10th Cir. 2001) (quotingIllinois v. Gates , 462 U.S. 213, 238–39 (1983)). “Probable cause means that “there is a fair probability that contraband or evidence of a crime will be found in a particular place.”” Id. (quotingGates , 462 U.S. at 238). “Sufficient information must be presented to the magistrate to allow that official to determine probable cause; his action cannot be a mere ratification of the bare conclusions of others.”Gates , 462 U.S. at 239.
The district court found that “the magistrate had a substantial basis for concluding that there was a fair probability that contraband or evidence of a crime would be found in the places to be searched or that the searches would uncover evidence of wrongdoing.” R., Vol. 2, at 53–54. The court explained that “[t]he affidavits state facts, not just conclusions, and provided the magistrates with the opportunity to make an independent evaluation of the allegedly false and misleading claims.” Id. at 54.
On appeal, Mr. Cooper correctly asserts that “whether the information set forth in an affidavit is sufficient to support probable cause must be determined on the basis of the facts presented to the magistrate, and not on mere conclusions.” Aplt. Opening Br. at 45. He argues that the affidavits presented to the magistrate judge in this case “did not provide a substantial basis for determining that probable cause existed, and [that] the magistrate's determination was merely the ratification of the agents' bare conclusions.”Id. at 46. Accordingly, he posits, “probable cause was lacking,” id., and therefore the warrants did not comply with the Fourth Amendment.
Mr. Cooper cites only two examples of what he believes to be such “bare conclusions”: (1) “[a]ccording to Renaissance's promotional material, all new members are automatically entitled to $5,000.00 in income tax deductions for the current calendar year”; and (2) “[e]ssentially, Renaissance is selling and offering to sell an income tax reduction package that promises immediate income tax deductions and reductions to individuals who have not incurred expenses in a legitimate home-based business.”Id. at 45–46 (alterations in original) (internal quotation marks omitted). However, these are not the type of bare conclusions with which the Supreme Court has shown concern.
The Gates court gave two examples of conclusory statements that failed to provide magistrates with a substantial basis for concluding that probable cause exists. In that case, the Court stated that neither “[a] sworn statement of an affiant that “he has cause to suspect and does believe that” [contraband] is located on certain premises,” Gates, 462 U.S. at 239 (quotingNathanson v. United States , 290 U.S. 41 (1933)), nor “[a]n officer's statement that “affiants have received reliable information from a credible person and believe” that [drugs are] stored in a home,”id. (quoting Aguilar v. Texas, 378 U.S. 108 (1964)), was sufficient. Those were examples of “wholly conclusory statement[s]” that utterly lacked any factual support. Id.
Here, on the other hand, the twenty-seven-page affidavit sets forth numerous facts upon which a magistrate judge could find probable cause. For example, the affidavit asserts that on “nine separate occasions,” an undercover agent was mailed “Renaissance promotional material such as videotapes, brochures, tax forms, and other material containing some false and misleading information.” Supp. R., Vol. 2, at 147 (Appl. & Affidavit for Search Warrant, Gov. Exh. 1, filed Oct. 6, 2000). The affidavit goes on to detail the dates and contents of these mailings, as well as the nature of various false statements, misrepresentations, or omissions contained therein. The affidavit also details the actions of three undercover agents who met with Renaissance affiliates—including Mr. Cooper—and unearthed evidence regarding the fraudulent nature of the Renaissance scheme. Included in the agents' account are statements by Renaissance affiliates, which the agents surreptitiously recorded.
These examples are a far cry from the sort of bare conclusions that the Supreme Court disapproved of in Gates. To the contrary, the assertions made in the affidavit—which are supported by sufficient facts—provided the magistrate judge in this case “with a substantial basis for determining the existence of probable cause.” Gates, 461 U.S. at 239. Accordingly, we hold that the district court committed no error in determining that the magistrate judge had a substantial basis for concluding that probable cause existed.
B. Particularity
Mr. Cooper next claims that the search warrants were invalid under the Particularity Clause of the Fourth Amendment. He argues that the warrants were “constitutionally overbroad” because they “authorized precisely the general searches of Renaissance property that are proscribed by the Fourth Amendment” and “fail[ed] to state what criminal activity was being investigated, instead merely reciting the mail fraud and money laundering statutes.” Aplt. Opening Br. at 36, 47. This court reviews de novo “whether the warrant at issue is sufficiently particular.” United States v. Williamson, 1 F.3d 1134, 1135 (10th Cir. 1993).
The Fourth Amendment's Particularity Clause provides that warrants must “particularly describ[e] the place to be searched, and the persons or things to be seized.”Groh v. Ramirez , 540 U.S. 551, 557 (2004) (emphasis omitted) (quoting U.S. Const. amend. IV) (internal quotation marks omitted). “A description is sufficiently particular when it enables the searcher to reasonably ascertain and identify the things authorized to be seized.” United States v. Riccardi, 405 F.3d 852, 862 (10th Cir. 2005) (quotingUnited States v. Leary , 846 F.2d 592, 600 (10th Cir. 1988)) (internal quotation marks omitted). “Even a warrant that describes the items to be seized in broad or generic terms may be valid when the description is as specific as the circumstances and the nature of the activity under investigation permit.” Id. Furthermore, although the Fourth Amendment “requires particularity in the warrant, not in the supporting documents,” Groh, 540 U.S. at 557, “the Fourth Amendment [does not] prohibit[] a warrant from cross-referencing other documents,” id., such as an affidavit, which may allow the warrant in some circumstances to satisfy the particularity requirement. See, e.g., Riccardi, 405 F.3d at 863 n.1 (“Where the warrant itself is insufficiently specific regarding the items to be searched and seized, this Court has held that the affidavit in support of the warrant can cure the want of specificity ....”). In this instance, the warrants—when read in light of the crime being investigated (i.e., a broad and complex financial scheme to defraud), and when considered in conjunction with the supporting affidavits—were sufficiently particular to satisfy the requirements of the Fourth Amendment. 11
It is true that the warrants viewed in isolation speak in general terms. See Supp. R., Vol. 2, at 184 (Search Warrant, dated Oct. 6, 2000) (only describing the building to be searched, listing the statutes alleged to be violated, and referring to a two-page “attached list of items” to be seized). Mr. Cooper argues they were constitutionally deficient because they “fail to state what criminal activity was being investigated, instead merely reciting the mail fraud and money laundering statutes,” and were therefore “essentially unlimited, containing an exhaustive list of virtually everything needed to run a business.” Aplt. Opening Br. at 47.
However, despite the generality of the warrants themselves, the supporting affidavits fill in many of the necessary details. In particular, the affidavits flesh out how the conduct being investigated is related to the statutes listed on the warrants. For example, the affidavits indicate that “[t]he use of the United States mail and commercial interstate carriers to transport Renaissance promotional materials or other matters in furtherance of this scheme or artifice to defraud United States consumers is in violation of 18 U.S.C. § 1341, which is mail fraud.” Supp. R., Vol. 2, at 144. The affidavits additionally state that “[t]he use of these fraud proceeds to promote the fraud or to conceal the identity, source, or nature of the proceeds would be money laundering in violation of 18 U.S.C. § 1956 or 18 U.S.C. § 1957.” Id. Furthermore, they describe various “mailings [that] contained Renaissance promotional material such as videotapes, brochures, tax forms, and other material containing some false and misleading information,” id. at 147, and various bank and brokerage accounts held by Mr. Cooper, Renaissance, or associated entities, see id. at 153–58. Importantly, the affidavits also include a list of “[i]tems to be seized,” id. at 161–62, 86–87, which—when read in conjunction with the warrant and the remainder of each affidavit—would “enable[] the [executing officers] to reasonably ascertain and identify the things authorized to be seized,” Riccardi, 405 F.3d at 862 (quotingLeary , 846 F.2d at 600). Contrary to Mr. Cooper's assertions, the warrants and affidavits do much more than “merely recit[e] the mail fraud and money laundering statutes.” Aplt. Opening Br. at 47.
Furthermore, as noted above, “[e]ven a warrant that describes the items to be seized in broad or generic terms may be valid when the description is as specific as the circumstances and the nature of the activity under investigation permit.” Riccardi, 405 F.3d at 862 (quotingLeary , 846 F.2d at 600). In other words, whether a search warrant is sufficiently particular depends in part on the nature of the crimes being investigated. Warrants relating to more complex and far-reaching criminal schemes may be deemed legally sufficient even though they are less particular than warrants pertaining to more straightforward criminal matters.See United States v. Hargus , 128 F.3d 1358, 1362 (10th Cir. 1997) (“[W]e are satisfied that [the warrant] is sufficiently limited and specific, in view of the nature of this extended conspiracy and other crimes for which he was being investigated ....”); United States v. Janus Indus., 48 F.3d 1548, 1554 (10th Cir. 1995) (“The type of criminal activity under investigation in the present case—a drug paraphernalia business—makes it difficult to list with great particularity the precise items desired to be seized which evidence such activity.”). Indeed, the complex and comprehensive nature of the broad scheme of financial criminal activity implicated in this case “makes it difficult to list with great particularity the precise items desired to be seized which evidence such activity.” Janus Indus., 48 F.3d at 1554. In the face of this difficulty, the affiants provided a meaningful and sufficient amount of detail.
In sum, the affidavits provide significantly more detail than the search warrants regarding the crimes at issue and the nature of the items to be seized. Reading the affidavits in conjunction with the search warrants “enable[d] the searcher to reasonably ascertain and identify the things authorized to be seized.” Riccardi, 405 F.3d at 862 (quotingLeary , 846 at 600). In light of the complex nature of the activities being investigated here, we conclude that the warrants were sufficiently particular when read in conjunction with their supporting affidavits.
B. Franks Hearing
Mr. Cooper alternatively argues that the district court erred in failing to afford him an evidentiary hearing pursuant toFranks v. Delaware . His argument in support of this claim, in its entirety, states: “Alternatively, the [district] court at least should have held a hearing pursuant to [Franks], as the information before the court constituted a substantial preliminary showing that the agents knowingly, or with reckless disregard for the truth, made false statements in the affidavits.” Aplt. Opening Br. at 49 (citing Franks, 438 U.S. at 171–72;United States v. Basham , 268 F.3d 1199, 1204 (10th Cir. 2001)). As Mr. Cooper provides no other argument or authority in support of this claim, he has insufficiently raised it on appeal. It is well-settled that “[a]rguments inadequately briefed in the opening brief are waived.”Adler v. Wal-mart Stores, Inc. , 144 F.3d 664, 679 (10th Cir. 1998); see, e.g., Bronson v. Swensen, 500 F.3d 1099, 1104 (10th Cir. 2007) (“[W]e routinely have declined to consider arguments that are not raised, or are inadequately presented, in an appellant's opening brief.”). We therefore conclude that Mr. Cooper has waived this argument on appeal. 12
In any event, even if we were to conclude that Mr. Cooper had adequately presented his Franks argument on appeal, we would hold that his claim is without merit. We briefly address it here.
A defendant is entitled to a Franks hearing if he “makes a substantial showing that the affidavit contains intentional or reckless false statements and if the affidavit, purged of its falsities, would not be sufficient to support a finding of probable cause.” United States v. Kennedy, 131 F.3d 1371, 1376 (10th Cir. 1997) (citingFranks , 438 U.S. at 155–56). “[T]he standards of deliberate falsehood and reckless disregard set forth in Franks apply to material omissions, as well as affirmative falsehoods.”Id. (quoting Stewart v. Donges, 915 F.2d 572, 582 (10th Cir. 1990)) (internal quotation marks omitted). A defendant's allegations must be accompanied by an offer of proof. United States v. Owens, 882 F.2d 1493, 1498 (10th Cir. 1989). Defendants must “point out specifically the portion of the warrant affidavit that is claimed to be false; and they should be accompanied by a statement of supporting reasons. Affidavits or sworn or otherwise reliable statements of witnesses should be furnished, or their absence satisfactorily explained.” Id. (quotingFranks , 438 U.S. at 171).
“[T]his court has not adopted a standard of review [for the denial of a Franks hearing] but other Circuit Courts of Appeals apply either a clear error standard or a de novo standard.” United States v. Gentry, 406 F. App'x 274, 279 (10th Cir. 2010);accord United States v. Vandemerwe , 405 F. App'x 344, 347 (10th Cir. 2010) (“[W]e have not expressly indicated what standard of review applies to a district court's refusal to conduct a Franks hearing.” (alteration in original) (quoting United States v. Archuleta, 222 F. App'x 710, 715 (10th Cir. 2007)) (internal quotation marks omitted)). We need not opine on the appropriate standard of review that this court should adopt, because we may uphold the district court's decision to not afford Mr. Cooper aFranks hearing even applying the more-searching de novo standard.
The district court found that Mr. Cooper “ha[d] not made a substantial preliminary showing that the agents knowingly or recklessly withheld information from the magistrates or that the allegedly false statements were necessary to the finding of probable cause,” and that he therefore was not entitled to a Franks evidentiary hearing. R., Vol. 2, at 56. Mr. Cooper makes a conclusory argument that the district court should have held a Franks hearing because “the information before the court constituted a substantial preliminary showing that the agents knowingly, or with reckless disregard for the truth, made false statements in the affidavits.” Aplt. Opening Br. at 49. Separately, in discussing the Leon good-faith exception, Mr. Cooper submits that “the agents deliberately withheld any factual information that would have allowed a magistrate to make an independent determination as to whether Renaissance was in fact making the representations in its promotional materials that the agents claimed it was making,” and that “[t]he agents, at a minimum, “were reckless in not including in the affidavit information which was known and easily accessible to them.”” Id. at 48 (quoting United States v. Fuccillo, 808 F.2d 173, 178 (1st Cir. 1987)).
Mr. Cooper has utterly failed to satisfy his burden here. On appeal, Mr. Cooper does not so much as identify any intentionally or recklessly false statements or material omissions by the affiants. Nor does he assert that, with such misstatements or omissions rectified, the affidavit would not support a finding of probable cause. Accordingly, even if this issue were not waived, we would conclude that the district court did not err in denying Mr. Cooper's request for a Franks hearing.
CONCLUSION
Based on the foregoing, we affirm the district court's denials of Mr. Cooper's motions for judgment of acquittal, motion for a new trial, and motion to suppress, and therefore affirm Mr. Cooper's convictions.
*
United States District Judge William P. Johnson of the District of New Mexico, sitting by designation.
1
Earlier versions of the TRS included the “Tax Pack,” which Renaissance marketed and sold in 1997, and the “Tax Advantage System,” which Renaissance marketed and sold in 1998 and 1999. Aplt. Opening Br. at 7.
2
“The chief architect behind the creation of the Tax Dream Team was [co-conspirator] Todd Strand.” Aplt. Opening Br. at 16 n.2. Mr. Cota took over as the leader of the Tax Dream Team when he joined Renaissance as its national tax director in 1999.Id. The Tax Dream Team was “a group of individuals promoted by Renaissance as tax experts.” R., Vol. 1, at 50. The team “had the final word on all tax advice given by the company” and, under the direction of Mr. Cota, was responsible for building the ATPN and rewriting the TRS. Aplt. Opening Br. at 16 n.2, 18, 21.
3
In his suppression motion, Mr. Cooper challenged the “eleven federal search warrants—four general warrants for seizure of business records and seven warrants for seizure of bank accounts—[executed] on October 11, 2000.” R., Vol. 1, at 118 (Mot. to Suppress, filed June 29, 2006). Mr. Cooper's motion did not appear to challenge the search warrant for his safe deposit box.
In his reply brief, however, Mr. Cooper sought to challenge all twelve of the searches and seizures that were executed on October 11, 2000. Moreover, the government's response characterized Mr. Cooper's motion as “seek[ing] suppression of all evidence seized pursuant to the search and seizure warrants served on October 11, 2000.” R., Vol. 1, at 148.
4
Mr. Cooper also averred that “[t]he warrants ... violate[d] the Fourth Amendment on the separate ground that the information contained in the affidavits was stale.” R., Vol. 1, at 133. The district court rejected this argument, and Mr. Cooper has not raised it as a separate claim on appeal. Consequently, we need not consider it here.
5
The district court alternatively held that “even if ... probable cause was lacking, [it] would still deny [Mr. Cooper's] motion to suppress based upon [United States v. Leon, 468 U.S. 897 (1984)], wherein the Supreme Court held that when police officers act in good faith and reasonably rely on a search warrant, the evidence obtained during the search should not be suppressed even if the warrant was lacking in probable cause.” R., Vol. 2, at 56. The court concluded that Leon's “good faith” exception applied because “the officers ... in this case acted in good faith, and the warrant contained sufficient information for a reasonable officer to believe that [the] warrant [was] valid.”Id.
6
The district court concluded that Mr. Cooper had “not contest[ed] his conviction on Count 66,” R., Vol. 1, at 448 n.1 (Mem. & Order, filed Apr. 14, 2009), because he had omitted Count 66 both when he recited his counts of conviction and when he asserted that “no rational juror could have found Mr. Cooper guilty of any of counts 1, 58–61, 68–69, 74, 76, 78–79, 83, 87–88, or 91–148 of the Superseding Indictment.” Id. at 403 (Mot. for J. of Acquittal, filed Apr. 10, 2008). The better view, however, is that Mr. Cooper's motion did challenge his conviction on Count 66, but that he inadvertently omitted Count 66 when enumerating the challenged counts. In his motion for judgment of acquittal, almost immediately before the enumeration of counts, Mr. Cooper expressly states that “defendant ... moves for judgment of acquittal on all counts of conviction in this case.” Id. (emphasis added). Similarly, in his reply brief regarding this matter, Mr. Cooper concludes his arguments by clearly noting that “[j]udgment of acquittal must be entered as to each count of conviction in this case.” Id. at 447 (Def.'s Reply Mem. in Supp. of Mot. for J. of Acquittal, filed Feb. 12, 2009) (emphasis added). The record allows for no dispute that Count 66 was one of Mr. Cooper's counts of conviction. Id. at 391 (Verdict Form, filed Feb. 28, 2008). Therefore, Mr. Cooper's general attack on his counts of conviction seemingly would have included a challenge to Count 66. Furthermore, as a legal matter, there was nothing to significantly distinguish Count 66 from the other mail fraud counts. In other words, as the district court recognized, “the same analysis [would] appl[y]”id. at 448 n.1, to Count 66 as to the other mail fraud counts. Therefore, we cannot discern any logical reason why Mr. Cooper would have intentionally omitted Count 66 from his motion for judgment of acquittal, which challenged his other mail fraud counts of conviction.
7
Our case law makes clear that “a conspiracy ... does not [necessarily] require proof of an overt act” in all instances. United States v. Fishman, __F.3d__, 2011 WL 2084207, at 6 (10th Cir. May 27, 2011) (citing Whitfield v. United States, 543 U.S. 209 (2005)). However, when a conspiracy charge is brought under § 371—the general conspiracy statute—the “overt act” requirement must be met.
8
Although this court's decision inUnited States v. Torres presents a closer call, it is distinguishable. There we held that suppressed evidence of a confidential informant's misidentification of the defendant was not cumulative of an earlier misidentification. 569 F.3d at 1283–84. We reached our conclusion because, with the evidence, “defense counsel could have shown that, rather than the first misidentification being a one-time slip-of-the-tongue, the [confidential informant] had difficulty identifying the various members of Mr. Torres's extended family and might reasonably have thought she was dealing with one member when in fact it was another.” Id. at 1284. However, inTorres , evidence that the confidential informant had been retained by the DEA on two other occasions was also wrongly suppressed and deemed material. See id. at 1280, 1282–83. Moreover, the confidential informant was the government's critical witness: “the government's case hinge[d] on the [confidential informant's] credibility.” Id. at 1283. As we see it, the factual context of Torres distinguishes it from this case. Here, unlike in Torres, repetition of the conduct at issue was not especially important; the jury had already been presented with evidence suggesting that Mr. Gleason was dishonest and a liar, especially with regard to financial and tax matters. Another series of lies of at least roughly the same ilk would have been unlikely to have materially affected their judgment on this point. Further, there was other suppressed evidence at play in Torres of an entirely different sort (i.e., the DEA evidence) that arguably could have factored into or influenced the court's overall conclusion that all of the suppressed evidence at issue was material. There is no such additional evidence here. In sum, we conclude thatTorres is distinguishable.
9
Mr. Cooper acknowledges that the warrants, and the affidavits underlying these warrants, “each recite the same “facts” and assertions to support probable cause.” R., Vol. 1, at 122; see Aplt. Opening Br. at 26–27 (“The search warrant affidavits ... [and] seizure warrants utilize virtually identical language.” (citing the twelve warrants executed on October 11, 2000)). Moreover, neither the parties nor the district court appear to draw any distinctions among the numerous warrants and supporting affidavits. Accordingly, for ease of reference, we cite to the (shared) language of only one of the search warrants—that is, the search warrant executed October 11, 2000, on Renaissance's distribution center, as well as the supporting application and affidavit.
10
Mr. Cooper asserts that, were we to hold that the warrants violated the Fourth Amendment such that any evidence seized pursuant to their execution should have been suppressed, “all fruits of the poisonous tree” must also be suppressed. Aplt. Opening Br. at 48–49. The government, on the other hand, argues that any Fourth Amendment violation does not require suppression of any evidence because the good-faith exception to the warrant requirement—articulated by the Supreme Court inUnited States v. Leon —is applicable in this case. Because we conclude that the warrants complied with the Fourth Amendment, we need not address either of these arguments.
11
In concluding that the warrants were sufficiently particular, the district court consulted the supporting affidavits. See R., Vol. 2, at 55 (referring to “the facts set forth in the affidavit”). Generally, an “affidavit in support of the warrant can cure the want of specificity ... only if the affidavit is both incorporated in and attached to the warrant.” Riccardi, 405 F.3d at 863 n.1. It is unclear whether those two requirements are met in this case. However, before the district court, Mr. Cooper did not object to the court's practice of referring to the affidavits, nor has he challenged that practice on appeal. In fact, at oral argument, Mr. Cooper's attorney acknowledged that the court in this case was “absolutely” permitted to consider the affidavits in determining whether the warrants satisfied the Fourth Amendment's particularity requirements. Oral Argument at 9:15–9:44. Therefore, the propriety of incorporating the affidavits in evaluating Mr. Cooper's particularity claim is not before us on appeal. Like the district court, we therefore consider the warrants in conjunction with the affidavits.
12
At oral argument, both Mr. Cooper's counsel and the government indicated that they believed that theFranks issue is before the court on appeal.See Oral Argument at 11:38 (Judge: “Did you raise a Franks challenge, at all?” Counsel for Mr. Cooper: “I did.” Judge: “Is that before us on appeal?” Counsel for Mr. Cooper: “It is.”);id. at 12:07–14:40 (acknowledging that theFranks issue was “raised in the appellant's [opening] brief” and was before the court on appeal). However, we are not bound by the parties' concessions made at oral argument as to whether this issue has been adequately placed before the court on appeal. See, e.g., Koch v. U.S. Dept. of Interior, 47 F.3d 1015, 1018 (10th Cir. 1995) (“[A] court is not bound by stipulations of the parties as to questions of law.” (quotingDimidowich v. Bell & Howell , 803 F.2d 1473, 1477 n.1 (9th Cir. 1986)) (internal quotation marks omitted)).
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