UNITED STATES COURT OF APPEALS For the Fifth Circuit
No. 00-30894
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
VERSUS
JOHN I. BICKHAM, SR.
Defendant-Appellant.
Appeal from the United States District Court for the Eastern District of Louisiana (99-CR-90)
June 28, 2001
Before SMITH, DUHÉ and WIENER, Circuit Judges.
PER CURIAM:1
John I. Bickham, Sr. (“Bickham”) appeals his conviction and
sentence for tax evasion alleging five errors. We affirm.
BACKGROUND
Bickham was majority shareholder in and operated Petroleum
Catalyst, Inc. (“PCI”), a Louisiana corporation. PCI paid Bickham
a monthly salary plus commissions on sales. Bickham had PCI pay
his commissions to another corporation he controlled, Gulf Catalyst
1 Pursuant to 5TH CIR. R. 47.5, the Court has determined that this opinion should not be published and is not precedent except under the limited circumstances set forth in 5TH CIR. R. 47.5.4. Investments, Inc. (“GCI”), rather than to Bickham personally.
In 1985, the Louisiana Secretary of State revoked GCI’s
articles of incorporation and authority to do business for failing
to file an annual report. After the revocation, Bickham continued
to maintain a bank account in GCI’s name. Bickham deposited his
PCI commission checks into this account, often wrote checks to
“cash” on the account, and used its funds to restore his Rolls-
Royce, repair his Porsche, customize his Suburban, repair his boat,
purchase stereo equipment, and vacation at a health spa. Bickham
accurately characterized GCI as a “paper company.” GCI kept no
business records, had neither an office nor a telephone number, and
never submitted invoices to PCI. Except for Bickham’s commission
payments, PCI never paid anyone without first receiving an invoice.
Bickham did not report any of his commissions PCI paid to GCI
in 1992, 1993, and 1994 as his income on his tax returns for those
years. GCI filed no returns. A jury convicted Bickham of
willfully attempting to evade taxes for 1992-94. The District
Court sentenced him to twenty-seven months’ incarceration.
STANDARD OF REVIEW
Because Bickham did not object to the District Court’s jury
instructions at trial, we review the instructions the court gave
for plain error. United States v. Lankford, 196 F.3d 563, 575 (5th
Cir. 1999), cert denied, 120 S. Ct. 1984 (2000). We review the
court’s decision not to give instructions that Bickham requested
2 for abuse of discretion. United States v. Jobe, 101 F.3d 1046,
1059 (5th Cir. 1996). We review the sufficiency of the indictment
de novo. United States v. Cabrera-Teran, 168 F.3d 141, 143 (5th
Cir. 1999). We review the District Court’s factual findings at
sentencing for clear error and its legal interpretations of the
sentencing guidelines de novo. United States v. Lyckman, 235 F.3d
234, 237 (5th Cir. 2000). We do not review a claim of ineffective
assistance of counsel on direct appeal “unless the district court
has first addressed it or unless the record is sufficiently
developed to allow [us] to evaluate the claim on its merits.”
United States v. Villegas-Rodriguez, 171 F.3d 224, 230 (5th Cir.
1999).
ANALYSIS
I. The Jury Instruction the District Court Gave
Bickham argues that the District Court’s jury instruction was
plainly erroneous. The elements of tax evasion are willfulness,
existence of a tax deficiency, and an affirmative act constituting
an attempted evasion of the tax. United States v. Townsend, 31
F.3d 262, 266 (5th Cir. 1994). Bickham argues that the instruction
the District Court gave failed to advise the jury that it had to
find that Bickham committed an affirmative evasive act in order to
convict him.
The District Court instructed the jury that to convict
Bickham, it had to find beyond a reasonable doubt:
First, that the defendant owed substantially more tax than he
3 reported on his 1992, 1993, and 1994 income tax returns because he
intentionally under reported his adjusted gross income;
Second, that when the defendant filed those income tax returns
he knew that he owed substantially more taxes to the government
than he reported; and
Third, that when Bickham filed his 1992, 1993, and 1994 income
tax returns, he did so with the purpose of evading payment of taxes
to the government.
The government correctly argues that because the filing of a
false return that understates the taxpayer’s income is an
affirmative act of evasion, see, for example, United States v.
Skalicky, 615 F.2d 1117, 1120 (5th Cir. 1980) (“The requisite
affirmative act can be found in the filing of false returns for
each year in the indictment”), the District Court’s instruction
sufficiently stated the elements of the offense.
II. The Jury Instruction the District Court Did Not Give
Bickham contends that the District Court abused its discretion
by rejecting two jury instructions he requested. The first read:
John Bickham, Sr., has been charged with failing to pay his personal income tax. GCI, Inc., was a viable business entity. The commissions or consulting fees paid to GCI were taxable income of GCI and not John Bickham, Sr. If you find that GCI, and not John Bickham, Sr., should have paid taxes on that income, then you should find John Bickham, Sr., not guilty.
Bickham’s second requested instruction advised the jury that
if it found that GCI “is organized and established for a purpose
that is the equivalent of a business activity . . . , the
4 corporation remains a separate taxable entity. As a separate
taxable entity, it would be subject to corporate income tax on its
income, and that income would not be included in the owner’s
income.” That is, Bickham effectively requested that the District
Court instruct the jury to find him not guilty if GCI “is organized
and established for a purpose that is the equivalent of a business
activity.”
We will “not overturn the defendant[’s] conviction on the
ground that the district court omitted [his] instruction from its
jury charge unless ‘that instruction is legally correct, represents
a theory of defense with basis in the record which would lead to
acquittal, and . . . that theory is not effectively presented
elsewhere in the charge.’” United States v. Duvall, 846 F.2d 442,
447 (5th Cir. 1987) (citations omitted).
Bickham’s first proposed instruction has no basis in the
record and is not legally correct. It has no basis in the record
because – in Bickham’s word’s – GCI was a “paper company,” not a
“viable business entity.” The instruction is legally incorrect
because the amounts paid to GCI were Bickham’s taxable income, not
GCI’s. The second instruction was improper because nothing
suggests that GCI was organized or operated for any legitimate
business purpose during the years in question.
III.
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UNITED STATES COURT OF APPEALS For the Fifth Circuit
No. 00-30894
UNITED STATES OF AMERICA,
Plaintiff-Appellee,
VERSUS
JOHN I. BICKHAM, SR.
Defendant-Appellant.
Appeal from the United States District Court for the Eastern District of Louisiana (99-CR-90)
June 28, 2001
Before SMITH, DUHÉ and WIENER, Circuit Judges.
PER CURIAM:1
John I. Bickham, Sr. (“Bickham”) appeals his conviction and
sentence for tax evasion alleging five errors. We affirm.
BACKGROUND
Bickham was majority shareholder in and operated Petroleum
Catalyst, Inc. (“PCI”), a Louisiana corporation. PCI paid Bickham
a monthly salary plus commissions on sales. Bickham had PCI pay
his commissions to another corporation he controlled, Gulf Catalyst
1 Pursuant to 5TH CIR. R. 47.5, the Court has determined that this opinion should not be published and is not precedent except under the limited circumstances set forth in 5TH CIR. R. 47.5.4. Investments, Inc. (“GCI”), rather than to Bickham personally.
In 1985, the Louisiana Secretary of State revoked GCI’s
articles of incorporation and authority to do business for failing
to file an annual report. After the revocation, Bickham continued
to maintain a bank account in GCI’s name. Bickham deposited his
PCI commission checks into this account, often wrote checks to
“cash” on the account, and used its funds to restore his Rolls-
Royce, repair his Porsche, customize his Suburban, repair his boat,
purchase stereo equipment, and vacation at a health spa. Bickham
accurately characterized GCI as a “paper company.” GCI kept no
business records, had neither an office nor a telephone number, and
never submitted invoices to PCI. Except for Bickham’s commission
payments, PCI never paid anyone without first receiving an invoice.
Bickham did not report any of his commissions PCI paid to GCI
in 1992, 1993, and 1994 as his income on his tax returns for those
years. GCI filed no returns. A jury convicted Bickham of
willfully attempting to evade taxes for 1992-94. The District
Court sentenced him to twenty-seven months’ incarceration.
STANDARD OF REVIEW
Because Bickham did not object to the District Court’s jury
instructions at trial, we review the instructions the court gave
for plain error. United States v. Lankford, 196 F.3d 563, 575 (5th
Cir. 1999), cert denied, 120 S. Ct. 1984 (2000). We review the
court’s decision not to give instructions that Bickham requested
2 for abuse of discretion. United States v. Jobe, 101 F.3d 1046,
1059 (5th Cir. 1996). We review the sufficiency of the indictment
de novo. United States v. Cabrera-Teran, 168 F.3d 141, 143 (5th
Cir. 1999). We review the District Court’s factual findings at
sentencing for clear error and its legal interpretations of the
sentencing guidelines de novo. United States v. Lyckman, 235 F.3d
234, 237 (5th Cir. 2000). We do not review a claim of ineffective
assistance of counsel on direct appeal “unless the district court
has first addressed it or unless the record is sufficiently
developed to allow [us] to evaluate the claim on its merits.”
United States v. Villegas-Rodriguez, 171 F.3d 224, 230 (5th Cir.
1999).
ANALYSIS
I. The Jury Instruction the District Court Gave
Bickham argues that the District Court’s jury instruction was
plainly erroneous. The elements of tax evasion are willfulness,
existence of a tax deficiency, and an affirmative act constituting
an attempted evasion of the tax. United States v. Townsend, 31
F.3d 262, 266 (5th Cir. 1994). Bickham argues that the instruction
the District Court gave failed to advise the jury that it had to
find that Bickham committed an affirmative evasive act in order to
convict him.
The District Court instructed the jury that to convict
Bickham, it had to find beyond a reasonable doubt:
First, that the defendant owed substantially more tax than he
3 reported on his 1992, 1993, and 1994 income tax returns because he
intentionally under reported his adjusted gross income;
Second, that when the defendant filed those income tax returns
he knew that he owed substantially more taxes to the government
than he reported; and
Third, that when Bickham filed his 1992, 1993, and 1994 income
tax returns, he did so with the purpose of evading payment of taxes
to the government.
The government correctly argues that because the filing of a
false return that understates the taxpayer’s income is an
affirmative act of evasion, see, for example, United States v.
Skalicky, 615 F.2d 1117, 1120 (5th Cir. 1980) (“The requisite
affirmative act can be found in the filing of false returns for
each year in the indictment”), the District Court’s instruction
sufficiently stated the elements of the offense.
II. The Jury Instruction the District Court Did Not Give
Bickham contends that the District Court abused its discretion
by rejecting two jury instructions he requested. The first read:
John Bickham, Sr., has been charged with failing to pay his personal income tax. GCI, Inc., was a viable business entity. The commissions or consulting fees paid to GCI were taxable income of GCI and not John Bickham, Sr. If you find that GCI, and not John Bickham, Sr., should have paid taxes on that income, then you should find John Bickham, Sr., not guilty.
Bickham’s second requested instruction advised the jury that
if it found that GCI “is organized and established for a purpose
that is the equivalent of a business activity . . . , the
4 corporation remains a separate taxable entity. As a separate
taxable entity, it would be subject to corporate income tax on its
income, and that income would not be included in the owner’s
income.” That is, Bickham effectively requested that the District
Court instruct the jury to find him not guilty if GCI “is organized
and established for a purpose that is the equivalent of a business
activity.”
We will “not overturn the defendant[’s] conviction on the
ground that the district court omitted [his] instruction from its
jury charge unless ‘that instruction is legally correct, represents
a theory of defense with basis in the record which would lead to
acquittal, and . . . that theory is not effectively presented
elsewhere in the charge.’” United States v. Duvall, 846 F.2d 442,
447 (5th Cir. 1987) (citations omitted).
Bickham’s first proposed instruction has no basis in the
record and is not legally correct. It has no basis in the record
because – in Bickham’s word’s – GCI was a “paper company,” not a
“viable business entity.” The instruction is legally incorrect
because the amounts paid to GCI were Bickham’s taxable income, not
GCI’s. The second instruction was improper because nothing
suggests that GCI was organized or operated for any legitimate
business purpose during the years in question.
III. The Indictment
Bickham argues that the indictment failed to allege all the
elements of tax evasion. An indictment under 26 U.S.C. § 7201 must
5 allege the elements of tax evasion described above: willfulness,
existence of a tax deficiency, and an affirmative act constituting
an attempted evasion of the tax. United States v. Townsend, 31
F.3d 262, 266 (5th Cir. 1994). Bickham argues that the indictment
alleged only willful non-reporting of income, not an affirmative
attempted tax-evasive act. Bickham also argues that the indictment
did not allege a tax deficiency.
We review indictments with “maximum liberality,” see United
States v. Ramirez, 233 F.3d 318, 323 (5th Cir. 2000). While the
indictment did not use the phrase “tax deficiency,” each count of
the indictment stated that Bickham “did willfully attempt to evade
and defeat a large part of the income tax due and owing by him.”
Because “an additional tax due and owing” constitutes a tax
deficiency, the indictment sufficiently stated that element of the
crime of attempted evasion. See United States v. Schafer, 580
F.2d 774, 777 (5th Cir. 1978). The indictment also alleges an
affirmative act of evasion. Affirmative acts of evasion include
the filing of a false return and, more generally, acts that are
likely to mislead or conceal. See Skalicky, 615 F.2d at 1120;
Spies v. United States, 317 U.S. 492, 499 (1943). Since the
indictment alleged that Bickham willfully attempted to evade income
tax “by filing and causing to be filed . . . a false and fraudulent
U.S. Individual Income Tax Return,” the indictment sufficiently
alleged the required evasive act.
IV. Sophisticated Concealment
6 Bickham argues that the District Court erroneously enhanced
his sentence on account of his sophisticated concealment of his
crime. U.S.S.G. § 2T1.1(b)(2) instructs courts to increase an
offender’s base offense level by two levels if the offense involved
sophisticated concealment. The commentary to the Guidelines, which
is authoritative, identifies “hiding assets or transactions, or
both, through the use of fictitious entities, corporate shells, or
offshore bank accounts” as examples of sophisticated concealment.
See United States v. Stinson, 508 U.S. 36, 38 (1993).
Since Bickham hid assets and transactions through the use of
a corporate shell, GCI, the District Court did not err in enhancing
his sentence.
V. Ineffective Assistance of Counsel
Bickham argues that his counsel was unconstitutionally
ineffective at sentencing. We do not review an ineffective
assistance claim on appeal “unless the district court has first
addressed it or unless the record is sufficiently developed to
allow [the Court] to evaluate the claim on its merits.” United
States v. Villegas-Rodriguez, 171 F.3d 224, 230 (5th Cir. 1999).
Bickham did not raise in the district court the ineffective
assistance at sentencing claim. Bickham, however, did before
sentencing file an affidavit complaining of counsel’s
representation at trial. The District Court conducted a colloquy
with Bickham at a short hearing sometime before his sentencing
concerning the quality of his trial representation. After hearing
7 Bickham’s account of his counsel, the District Court concluded that
Bickham had received “very competent representation.” The court
then granted Bickham’s counsel extra time to prepare objections to
the Pre-Sentence Report and postponed his sentencing by a month.
Id. At sentencing, Bickham did not again raise the issue of
ineffective assistance of counsel.
While the District Court knew of Bickham’s dissatisfaction
with his counsel’s performance at trial, the court did not address
Bickham’s claim that his counsel was ineffective at sentencing.
Accordingly, we decline to consider this claim on this direct
appeal.
AFFIRMED.