Appeals from the United States District Court for the Western District of Virginia, at Abingdon.
James C. Turk, District Judge. (CR-95-19-ALL)
Before MURNAGHAN and MOTZ, Circuit Judges, and STAMP, Chief United States District Judge for the Northern District of West Virginia, sitting by designation.
Reversed in part, affirmed in part, and remanded by published opinion. Judge Murnaghan wrote the opinion, in which Judge Motz and Chief Judge Stamp joined.
A federal jury convicted Defendant-Appellee Douglas Wilson of unlawfully and corruptly obstructing and impeding, and endeavoring to obstruct and impede, the administration of the internal revenue laws, in violation of 26 U.S.C.A. Section(s) 7212(a) (West 1989), and of willfully attempting to evade and defeat, and aiding and abetting in the evasion of, the payment of income and penalty taxes, in violation of 26 U.S.C.A. Section(s) 7201 (West 1989) and 18 U.S.C.A. Section(s) 2 (West 1969). The district court, however, set aside the jury's verdict and granted Wilson's motion for a judgment of acquittal on insufficiency of the evidence grounds. The government now appeals the district court's grant of Wilson's motion and argues that Wilson's conviction should be reinstated. Wilson cross-appeals the district court's denial of his alternative motion for a judgment of acquittal on statute of limitations grounds and his motion for a new trial. For the reasons stated below, we reverse in part, affirm in part, and remand for further proceedings.
In the early 1980s, the Internal Revenue Service ("IRS") determined that Arthur Odell Rogers, the owner of several coal mining companies, owed over $400,000 in personal income taxes and over $700,000 in trust fund penalties for failing to pay income and social security taxes that his companies had withheld from their employees' wages. In 1985, the IRS began to collect the taxes that Rogers owed, and Rogers retained Defendant-Appellee Douglas Wilson, an attorney, to represent him in his dealings with the IRS. The government contends that Wilson knowingly helped Rogers conceal assets from the IRS in order to prevent the IRS from attaching them.
The government first argues that Wilson helped Rogers conceal stock and dividends that Rogers received from an Alaska gold mining venture known as Windfall Gold Mining Company ("Windfall"). The Windfall stock was not in Rogers's own name, but instead was in the name of two partnerships, Double R Associates ("Double R") and M & T Equipment ("M&T") (collectively, the "Partnerships"). Rogers was a partner in both Double R and M&T. In late 1985 or early 1986, the Partnerships assigned the Windfall stock to Wilson.
Rogers testified at trial that the Partnerships assigned the stock to Wilson in order to prevent the IRS from attaching it to pay the taxes that Rogers owed. Rogers also testified that he and Wilson agreed that Wilson would use dividends from the Windfall stock to pay $70,000 in legal fees that he owed Wilson and that he and Wilson would split any additional dividends. Charles Barnett, Wilson's law partner, testified that the Partnerships transferred the stock solely to pay the legal fees, but that as a condition of the transfer, Wilson would pay Rogers twenty-five percent of the dividends as a consulting fee for services that Rogers performed for the law firm. Rogers, however, testified that he did not perform consulting services and that the payments were his share of the dividends that Wilson owed him for the transfer of the stock.
During 1988, Wilson made two payments to Micca McKinney, Rogers's wife at the time. On February 12, 1988, Wilson's law firm wired $19,159 to a Phoenix bank account in McKinney's name. On May 23, 1988, Wilson gave Rogers a $15,000 personal check made payable to McKinney. Rogers testified at trial that the payments were for his share of the Windfall dividends that Wilson had received and that Wilson paid the dividends to McKinney, rather than to Rogers, in order to prevent the IRS from attaching them.
Wilson testified that only the first $19,159 payment was for a Windfall dividend. He further testified that the payment was merely a loan. Wilson and Barnett testified that they did not want to turn the dividends over to McKinney because there was a possibility that Windfall would require the shareholders to pay the money back as a capital contribution. They testified that Wilson therefore prepared a note that Rogers and McKinney executed contemporaneously with the $19,159 payment that required them to repay the money to Wilson. The note was dated February 12, 1988, and it required Rogers and McKinney to pay Wilson and his law partners $19,159 on demand. Wilson further testified that the $15,000 payment was not for Windfall dividends but instead was a personal loan to McKinney to help her purchase stock in one of Rogers's companies, H.E.L. Coals. The note was dated May 23, 1988, and it required Rogers and McKinney to pay Wilson $15,000 on demand.
However, Rogers and McKinney testified that neither payment was a loan. McKinney testified that Wilson drafted both notes only after he learned on October 19, 1989 that the IRS was criminally investigating Rogers and that Wilson backdated the notes to the dates of the payments that he made to her.
The government also argues that Wilson helped Rogers conceal his assets in Victory Mining, Incorporated ("Victory"). From 1985 through early 1987, Rogers conducted his mining business under the name of Victory. From May 1986 through January 1987, the IRS collected some of the employment withholding taxes that Victory owed by, among other things, attaching over $66,000 in Victory's bank accounts, entering into an installment agreement with Rogers for paying the taxes that Victory and Rogers's other companies owed, and placing Victory on a "special deposit program." *fn1 On January 30, 1987, however, IRS revenue officer John Svecz met with Wilson and Rogers and told them that the installment agreement and special deposit program were inadequate and that the IRS would begin "enforced" collection and would attach Victory's bank accounts and assets (the "January 30, 1987 meeting").
Rogers testified that immediately after the January 30, 1987 meeting with Svecz, he met with Wilson and others at his home and they discussed removing funds from Victory's bank accounts and secreting them in a bank account in the name of Malcolm Van Dyke (the "Van Dyke account"), one of Rogers's employees. Wilson denied attending the meeting at Rogers's home. Later in the day on January 30, 1987, Wilson wrote a $4,000 personal check to Charter Federal Savings and Loan ("Charter Federal") to prevent Charter Federal from foreclosing on Rogers's home.
On February 2, 1987, Van Dyke, acting on orders from Rogers, removed the sum of $17,000 from Victory's three bank accounts and deposited it in the Van Dyke account to prevent the IRS from attaching it. Wilson testified at trial that he knew on February 2, 1987 that the IRS had issued levies on Victory's bank accounts. On February 3, 1987, Van Dyke wrote a $500 check on the Van Dyke account payable to Wilson's law firm in trust for Rogers. He also wrote a $4,000 check on the Van Dyke account payable to Wilson marked "repay loan to AOR [Rogers.]" When the banks received the IRS levies against Victory's accounts on February 3, 1987, only $295 remained in the accounts.
Wilson also drafted corporate documents for a new corporation, Symcor, Limited ("Symcor"), that would take over Victory's operations. Wilson testified that he drafted the corporate documents on December 3, 1986 and that two of Rogers's employees, John Lockhart and Michael Stevenson, signed the documents as the shareholders, directors, and officers of Symcor on January 5, 1987, before the January 30, 1987 meeting when Svecz told Rogers that he would begin attaching Victory's assets. Lockhart, however, testified that he and Stevenson signed backdated by-laws, board of directors minutes, and stock certificates around February 6, 1987. Rogers testified that he told Wilson to use Lockhart and Stevenson on the Symcor documents so that the IRS would not discover his interest.
Wilson also testified that he prepared assignments on January 5, 1987 that transferred Victory's mining lease to Symcor. Paula Smith, a notary at Wilson's law firm, testified that she notarized the assignments and watched the parties sign them on January 5, 1987. However, the president of Robinson-Phillips Coal Company, which had originally leased its mining rights to Victory, testified that he signed the assignment document on February 9, 1987 and that he understood at the time he signed it that the document had been backdated to January 5, 1987 in order to avoid Victory's tax problems. On February 17, 1987, Wilson told Svecz that Victory was trying to sell its mining lease, but he failed to disclose that Victory had already assigned its lease to Symcor. As a result, Svecz issued additional unsuccessful levies against Victory.
The government also contends that Wilson drafted additional backdated documents for other corporations and placed "strawmen" in the positions of officers and directors pursuant to Rogers's request in order to conceal Rogers's ownership interests. First, Wilson undisputedly prepared the corporate documents for a new mining corporation, Pandex. The documents named Tony Frederick and Richard Johnson, two of Rogers's employees, as the corporate officers. Frederick testified that in September or October 1987, Wilson told him how to funnel money out of Pandex to Rogers. Frederick testified that Wilson told him to write checks to Johnson, that Johnson would cash the checks, and that Johnson would then deliver the cash to Rogers. Frederick also testified that Wilson told him how to make it erroneously appear as if he had invested in Pandex.
In approximately November 1987, Rogers learned that Jasco Trucking Company ("Jasco"), another company that Rogers owned, had been used to pay some of Pandex's payroll and that Jasco therefore was liable for employment withholding taxes. Rogers became concerned that the IRS might assess his two sons, who were named on Jasco's corporate documents, for Jasco's tax liability. Rogers also wanted Johnson's name removed from Pandex's corporate documents because Johnson was also named on Jasco's corporate documents and he therefore was "tainted" by Jasco's tax liability. Frederick and Johnson testified that in October or November 1987, Wilson prepared, and had Frederick and Johnson sign, backdated Pandex board of directors minutes and stock certificates and had Johnson sign a backdated Pandex resignation. Rogers also testified that Wilson prepared backdated Jasco resignations for Rogers's two sons to prevent the IRS from assessing them with Jasco's taxes. Rogers's son also testified that he signed a backdated resignation.
In addition, Stevenson testified that Wilson prepared unidentified documents for him to sign in April 1988. Stevenson testified that Wilson told him that the documents would get the "alligators" off of Rogers and onto Stevenson. Stevenson explained that the term "alligators" referred to the IRS.
Rogers also owned and operated Meridan of Virginia ("Meridan"), a leasing company that held the equipment that Rogers used in his mining operations. Frederick's name also appeared on Meridan's corporate documents. Frederick testified that in the spring of 1989, Wilson prepared, and had Frederick and others sign, backdated Meridan documents. Frederick testified that Wilson ...