APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF OKLAHOMA (D.C. No. 5:CR-08-0271-F-1)
The opinion of the court was delivered by: Briscoe, Chief Judge.
United States Court of Appeals
Elisabeth A. Shumaker Clerk of Court
Before BRISCOE, Chief Judge, HOLLOWAY and HARTZ, Circuit Judges.
Defendant Skoshi Farr was convicted by a jury of violating 26 U.S.C. § 7201 for willfully failing to pay a trust fund recovery penalty that the Internal Revenue Service assessed against her after she, as the manager of an alternative medical clinic, failed to pay quarterly employment taxes owed by the clinic. Farr now appeals her conviction, contending she was denied her Sixth Amendment right to a fair trial by the district court's rulings which permitted the admission of Rule 404(b) evidence. She also contends the district court erred in denying her motion for judgment of acquittal, which argued that the government's evidence was insufficient to support a conviction, and in denying her motion to dismiss the indictment for failure to charge the offense under the appropriate statute. Finally, Farr contends her prosecution in this case was barred by the Double Jeopardy Clause as a result of the government's prior unsuccessful prosecution. We exercise jurisdiction pursuant to 28 U.S.C. § 1291 and affirm.
This is the third appeal to this court involving Farr and the government. In the two prior appeals, we described the facts that led to federal criminal proceedings initially being brought against Farr, as well as the events that transpired at Farr's initial trial:
From 1984 through 1999, . . . Farr served as the general manager or administrator of her husband's alternative medicine clinic in Oklahoma City, which he operated from 1978 until his death in December 1998. Apparently to avoid Internal Revenue Service ("IRS") scrutiny and collection efforts, the clinic used several names and associated tax identification numbers over the years, operating variously as "Genesis Medical Center," "Crossroads Unlimited Trust," and "ATHA-Genesis." Throughout its years of operation, the clinic filed quarterly federal tax returns (IRS Form 941) reporting wages paid and federal taxes withheld for employees, but failed conspicuously to pay those withheld quarterly employment taxes over to the federal government. The clinic's ever-changing name and tax identification number aided its efforts to avoid detection, making it difficult for IRS revenue officers to locate assets for the collection of the delinquent employment taxes.
The IRS is, of course, hardly without recourse in such circumstances. * * * In [particular], 26 U.S.C. § 6672 allows the IRS, in effect, to pierce the corporate veil and proceed against individual officers or employees responsible for collecting the offending company's quarterly employment taxes. Specifically, Section 6672 provides that the officers or employees who, on behalf of an employer, are responsible for collecting withholding taxes and paying them over to the government, and who willfully fail to do so, may be personally assessed a civil penalty equal to the amount of the delinquent taxes. (footnote and citations omitted). This is exactly how the IRS proceeded in this case, assessing a Section 6672 "trust fund recovery penalty" against . . . Farr, as the person allegedly responsible for turning over the clinic's withheld quarterly employment taxes to the government.
When . . . Farr did not pay the penalty assessed against her, a civil proceeding evolved into a criminal one. The government sought and received an indictment in August 2006 against . . . Farr. Specifically, the grand jury charged . . . Farr under 26 U.S.C. § 7201, a generic tax evasion provision providing that [a]ny person who willfully attempts in any manner to evade or defeat any tax imposed by this title or the payment thereof shall, in addition to other penalties provided by law, be guilty of a felony and, upon conviction thereof, shall be fined not more than $100,000 ($500,000 in the case of a corporation), or imprisoned not more than 5 years, or both, together with the costs of prosecution.
Significantly . . . , however, the government chose . . . not to seek a broad indictment simply reciting the generic language of Section 7201, but instead deliberately added additional detail to its charge. As adopted by the grand jury, the indictment alleged, in pertinent measure, [t]hat beginning on or about the 12th day of November, 2001, and continuing until the present, in the Western District of Oklahoma and elsewhere, SKOSHI THEDFORD FARR, the defendant herein, a resident of Oklahoma City, Oklahoma, and Grants Pass, Oregon, did willfully attempt to evade and defeat the payment of the quarterly employment tax for ATHA-Genesis Chapter due and owing by her to the United States of America for the quarters 6-99, 9-99, and 12-99 in the amount of $72,076.21 by concealing and attempting to conceal from the Internal Revenue Service the nature and extent of her assets and the location thereof and placing funds and property in the names of nominees. All in violation of Title 26, United States Code, Section 7201.
United States v. Farr, 536 F.3d 1174, 1176-78 (10th Cir. 2008) (Farr I).
At trial, the government only presented evidence that Farr was personally assessed and failed to pay a "trust fund recovery penalty." Recognizing the indictment did not cover Farr's failure to pay a trust fund recovery penalty, the district court instructed the jury, as a matter of law, that the "[t]rust [f]und [r]ecovery [p]enalty assessed against the defendant [wa]s to be treated as equivalent of the quarterly employment tax referred to in . . . the indictment." The jury convicted Farr, who appealed her conviction.
[In Farr I, we] concluded that the trial proceedings effected a constructive amendment of the indictment. We explained that while the indictment charged Farr with failing to pay quarterly employment taxes, the government's own witnesses indicated that only the employer is liable for quarterly employment taxes and Farr was never the employer. In light of this, the government sought to proceed against Farr for failing to pay the trust fund recovery penalty, and the district court in its jury instruction "effectively allowed the jury to convict Ms. Farr for failing to pay either the clinic's quarterly employment taxes purportedly 'due and owing by her' or the trust fund recovery penalty assessed personally against her."
We went on to explain that had the government simply charged Farr generically under § 7201 with the willful evasion of a tax it could have proven its case against her using either theory. Instead, since it included particulars about the nature of the tax, the particulars of the tax became an essential and delimiting part of the charge itself. Consequently, we reversed and remanded the case for a new trial.
Based on this court's reversal, the district court dismissed the case.
United States v. Farr, 591 F.3d 1322, 1324 (10th Cir. 2010) (Farr II).
Following the dismissal of the original indictment, the government sought and received a new indictment charging Farr with a single count of willfully attempting to evade and defeating the payment of a trust fund recovery penalty due and owing by her, in violation of 26 U.S.C. § 7201. Farr moved to dismiss this indictment on double jeopardy grounds, but the district court denied her motion. Farr filed an interlocutory appeal with this court. We affirmed the district court's decision and remanded the matter to the district court for further proceedings. Farr II, 591 F.3d at 1323, 1326.
The case proceeded to trial on February 22, 2011. At the conclusion
evidence, the jury found Farr guilty as charged in the indictment.
court subsequently sentenced Farr to a term of imprisonment of
months, and to pay restitution to the government in the amount of
Farr now appeals.
Admission of Rule 404(b) evidence
In her first issue on appeal, Farr contends that the district court wrongly admitted evidence of prior bad acts under Federal Rule of Evidence 404(b). Rule 404 (b) provides that evidence of "other crimes, wrongs, or acts" is inadmissible to prove the character of the accused, but "may be admissible for another purpose, such as proving motive, opportunity, intent, preparation, plan, knowledge, identity, absence of mistake, or lack of accident." Fed. R. Evid. 404(b)(2). This court imposes four requirements for evidence to be admitted under Rule 404(b):
(1) evidence of other crimes, wrongs, or acts must be introduced for a proper purpose; (2) the evidence must be relevant; (3) the court must make a Rule 403 determination whether the probative value of the similar acts is substantially outweighed by its potential for unfair prejudice; and (4) the court, upon request, must instruct the jury that the evidence of similar acts is to be considered only for the limited purpose for which it was admitted.
United States v. Diaz, 679 F.3d 1183, 1190 (10th Cir. 2012). "Admission of evidence under [Rule] 404(b) is reviewed under an abuse of discretion standard." Id. (internal quotation marks omitted).
Farr contends that the challenged evidence failed to satisfy the second of these requirements, i.e., relevancy.*fn1 Generally speaking, Farr argues, the evidence admitted by the district court was "unrelated to the substantive charges." Aplt. Br. at 21 (capitalization in original omitted). And, she argues, "[t]he government's case [ultimately] consisted of a deluge of mini trials of acts that [she] was ...