United States v. George Gilmore

• Court: Court of Appeals for the Third Circuit
• Decided: December 4, 2020
• Docket: 20-1234
• Status: Unpublished

Opinion

NOT PRECEDENTIAL

UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT ____________

No. 20-1234 ____________

UNITED STATES OF AMERICA

v.

GEORGE GILMORE, Appellant ____________

On Appeal from the United States District Court for the District of New Jersey (D.C. No. 3-19-cr-00029-001) District Judge: Honorable Anne E. Thompson ____________

Submitted on November 9, 2020

Before: HARDIMAN, GREENBERG, and SCIRICA, Circuit Judges.

(Filed: December 4, 2020)

___________

OPINION* ____________

* This disposition is not an opinion of the full Court and pursuant to I.O.P. 5.7 does not constitute binding precedent. HARDIMAN, Circuit Judge.

George Gilmore appeals his judgment of conviction after a jury found him guilty

of federal tax and financial crimes. We will affirm.

I

Gilmore is an attorney and a founding partner of the law firm of Gilmore &

Monahan, P.A. Gilmore exercised exclusive control over the firm’s financial decisions,

including expenditures, bills, and taxes. Under Gilmore’s management, the firm had a

history of submitting late payroll tax payments. Gilmore received numerous warnings

from Internal Revenue Service agents—both written and in-person—regarding the firm’s

payroll tax obligations. Gilmore did not heed the warnings and continued to submit the

taxes late.

Gilmore’s failures to timely pay the firm’s taxes were not his only financial

misdeeds. After he was denied a personal loan in 2014 due to outstanding debt

obligations, Gilmore applied for a $1.5 million loan in 2015. On that loan application,

Gilmore did not disclose his outstanding tax obligations of roughly $500,000 or his

outstanding personal debt to Dale Orlovsky of over $270,000. Instead, Gilmore checked

the “no” box when asked whether he was “presently delinquent or in default on any

Federal debt,” App. 3367, and omitted the Orlovsky loan from his list of “all outstanding

debts.” App. 3366.

On January 10, 2019, a grand jury indicted Gilmore for several tax and financial

crimes. After trial, the verdict was mixed. Gilmore was acquitted on two counts and the

2 jury was deadlocked on one count. But Gilmore was convicted on two counts of failing to

collect, account for, and pay over payroll taxes in violation of 26 U.S.C. § 7202, and one

count of making a false statement in a loan application in violation of 18 U.S.C. § 1014.

After trial, Gilmore moved for a judgment of acquittal and a new trial under Rules 29 and

33 of the Federal Rules of Criminal Procedure, but the District Court denied the motions.

The District Court sentenced Gilmore to a year and a day in prison and three years of

supervised release. Gilmore filed this timely appeal challenging only his conviction.1

II

A

Gilmore first claims the District Court erred by excluding the expert testimony of

Dr. Steven Simring. Gilmore proffered Dr. Simring as an expert witness to refute the

Government’s assertion that Gilmore acted willfully in failing to pay his overdue payroll

taxes. The Government moved in limine to exclude Dr. Simring and his testimony. Citing

our decision in United States v. Pohlot, 827 F.2d 889 (3d Cir. 1987), the District Court

granted the Government’s motion, excluding Dr. Simring’s testimony under Rules 702

and 703 of the Federal Rules of Evidence.

According to Gilmore, Dr. Simring’s testimony would have informed the jury that

because Gilmore was a compulsive hoarder, his failure to timely pay taxes could not be

considered willful or voluntary. Dr. Simring would have explained to the jury that

1 The District Court had jurisdiction under 18 U.S.C. § 3231. We have jurisdiction under 28 U.S.C. § 1291.

3 Gilmore “suffers from a mental-health disorder that explains his otherwise irrational

behavior of not paying taxes while knowing that such failure would be apparent to the

IRS.” Gilmore Br. 27 (internal quotations omitted). Gilmore further argues that “[a]s

[Dr.] Simring would have testified, Gilmore felt compelled to make those personal

expenditures by his hoarding disorder” because “[c]ollecting ha[d] long ago

overwhelmed his good judgment, and ha[d] taken over a large portion of his life.” Id. at

23 (internal quotations omitted). Gilmore claims that permitting Dr. Simring’s testimony

at trial would have “given the jury an admissible alternative explanation of the behavior

the Government presented as proof of willfulness.” Id. at 17.

As we noted in Pohlot: “District courts should admit evidence of mental

abnormality on the issue of mens rea only when, if believed, it would support a legally

acceptable theory of lack of mens rea.” 827 F.2d at 905–06. We cautioned that evidence

of diminished volitional control or the lack of ordinary self-judgment does not constitute

an acceptable theory of lack of mens rea. Id. at 906 (“[A] lack of self-reflection does not

mean a lack of intent and does not negate mens rea.”); accord United States v. Cameron,

907 F.2d 1051, 1066 (11th Cir. 1990) (holding that evidence “of an incapacity to reflect

or control the behaviors that produced the criminal conduct” does not constitute

“psychiatric evidence to negate specific intent and should not be admitted” (internal

quotation marks omitted)); id. at 1062 (“Psychiatric evidence of impaired volitional

4 control or inability to reflect on the ultimate consequences of one’s conduct is

inadmissible . . . .”).

The proffered testimony of Dr. Simring is like the testimony we held inadmissible

in Pohlot. Dr. Simring’s report sought to explain away the element of willfulness by

noting that Gilmore suffered from a hoarding disorder that “overwhelmed his good

judgment.” Gilmore Br. 23. But evidence of a lack of volitional control does not

constitute a “legally acceptable theory of a lack of mens rea,” as “any showing of

purposeful activity, regardless of its psychological origins,” will generally satisfy mens

rea. Pohlot, 827 F.2d at 904–06. So the District Court’s exclusion of Dr. Simring’s

testimony was no abuse of discretion. See, e.g., United States v. Foster, 891 F.3d 93, 107

n.11 (3d Cir. 2018) (holding that reversal is appropriate only when “the district court’s

decision is arbitrary, fanciful, or clearly unreasonable”).

The District Court also rightly noted that Dr. Simring’s testimony was “largely a

conduit for hearsay . . . [as it contained] more of Gilmore’s would be testimony than

[expert] opinion . . . as if the tail wags the dog.” App. 7. An expert may rely on otherwise

inadmissible facts and data to form his opinion, but those facts and data may be put to the

jury only if they are of the type other experts in the field would reasonably rely upon, and

if their “probative value . . . substantially outweighs their prejudicial effect.” FED. R.

EVID. 703.

Here, the probative value of Gilmore’s statements contained in Dr. Simring’s

report do not substantially outweigh their prejudicial effect. The document contained

5 numerous statements that simply proclaimed Gilmore’s innocence without informing any

expert conclusion. For example, the report included: “He told me he would never dream

of hiding income tax or taking any other illegal steps to evade taxes” and “He told me he

has never filed a false tax return.” App. 6. We agree with the District Court that dressing

up Gilmore’s statements in the guise of expert opinion does not render such statements—

or the expert opinion itself—admissible.

In sum, because Dr. Simring’s testimony would not have provided a legally

acceptable theory of a lack of mens rea, and it would have been an impermissible conduit

of hearsay, the District Court did not err in ruling it inadmissible.

B

Gilmore next challenges the District Court’s jury instructions on willfulness. The

Court instructed that willfulness could not be found if Gilmore believed in good faith that

“the tax laws did not make his conduct unlawful.” App. 2412. Gilmore requested the

word “criminal” be used instead of “unlawful.” App. 335. Gilmore claims the instruction

was legally erroneous because it equated belief of “unlawful” action with belief of

“criminal” action. Gilmore Br. 43.

Contrary to Gilmore’s claims, willfulness in the context of tax crimes merely

requires knowledge and violation of a duty. It does not require knowledge that one is

committing a criminal act. As the Supreme Court has made clear, “the standard for the

statutory willfulness requirement is the voluntary, intentional violation of a known legal

duty.” Cheek v. United States, 498 U.S. 192, 201 (1991) (internal quotation marks

6 omitted). Thus, to prove willfulness, the Government had to show “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, 498 U.S. at 201 (emphasis added). There is no

requirement that a person must be aware that the conduct is criminal. It is enough that he

knew he had a legal duty and violated it—in other words, that he acted unlawfully.

For these reasons, we hold the District Court did not err in instructing the jury on

the willfulness requirement.

C

Gilmore’s next two claims relate to the sufficiency of the Government’s evidence.

First, he argues there was insufficient evidence to find he acted willfully in violating a

known duty to pay his payroll taxes. Second, he claims the evidence was insufficient to

prove his loan application contained knowingly false statements.

Gilmore cites myriad facts and evidence that may have supported a verdict of

acquittal. The problem with this approach, of course, is that it fails to present the

evidence in the light most favorable to the verdict winner (here, the Government). See,

e.g., United States v. Mercado, 610 F.3d 841, 845 (3d Cir. 2010). The record is replete

with evidence from which a rational jury could conclude both that Gilmore willfully

violated a known duty when he failed to timely pay taxes and that he submitted a loan

application that contained knowingly false statements.

As to the former, the jury heard extensive testimony from IRS Agent Miriam

Popowitz about Gilmore’s repeated failures to pay payroll taxes on time, despite the

7 many warnings he received. Agent Popowitz’s testimony provided the jury with more

than enough to conclude that Gilmore willfully violated a known duty to pay taxes.

As to the latter, the prosecution presented evidence pertaining to Gilmore’s

massive tax debt (nearly $500,000 at the time he applied for the loan), as well as

testimony about the roughly $270,000 he and his wife owed Orlovsky. Given this

evidence, a jury could reasonably conclude that Gilmore’s failure to disclose his tax

liability when asked whether he was “delinquent or in default on any Federal debt,” App.

3367, as well as his omission of the Orlovsky loan when asked to list “all outstanding

debts,” App. 3366, constituted the submission of a loan application containing knowingly

false statements.

For these reasons, Gilmore’s arguments fall well short of the “highly deferential”

standard we apply to sufficiency of the evidence claims. See United States v. Caraballo-

Rodriguez, 726 F.3d 418, 430 (3d Cir. 2013) (en banc).

D

Finally, Gilmore contends the evidence was insufficient to convict him on Count 6

of the superseding indictment—that Gilmore’s failure to list his outstanding tax

obligations as “Federal debt” constituted the making of a false statement in a loan

application. Because Gilmore raised this issue for the first time in his post-trial motions,

he must satisfy the exacting plain error standard. See United States v. Olano, 507 U.S.

725 (1993). Even if we were to assume the Government’s theory regarding Gilmore’s

8 outstanding tax obligations was legal error, Gilmore’s argument fails because he cannot

show that the error affected his substantial rights. See id. at 733.

Here, the Government presented a “clear alternative theory of guilt” such that

Gilmore “likely cannot show that an instruction permitting the jury to convict on an

improper basis was not harmless error.” United States v. Andrews, 681 F.3d 509, 521 (3d

Cir. 2012). Orlovksy testified he had consciously made a personal loan to Gilmore (not to

his law firm) “to make certain that I had him liable, not the corporate entity . . . .” App.

1843. Additionally, the loan agreement between Gilmore and Orlovsky—listing Gilmore

and his wife as the recipients, not the firm—was entered into evidence. See App. 3438–

49 (Ex. 3003–C). Gilmore claims he thought the loan was a law firm liability, not a

personal one. Gilmore Br. 52. But the jury was not required to accept that testimony and

to assume it did at this stage would violate our duty to view the evidence in the light most

favorable to the Government. So ample evidence existed from which the jury could

conclude Gilmore lied on a loan application when he failed to disclose his debt to

Orlovsky.

In sum, Gilmore cannot demonstrate “a reasonable probability that the error

affected the outcome of the trial.” Andrews, 681 F.3d at 521. So he cannot meet the third

prong of Olano.

* * *

For the foregoing reasons, we will affirm Gilmore’s judgment of conviction.