UNITED STATES COURT OF APPEALS For the Fifth Circuit
No. 99-40530
United States of America,
Plaintiff-Appellee,
VERSUS
Julius L. Heard, III,
Defendant-Appellant.
Appeal from the United States District Court For the Eastern District of Texas (98-CR-16-2) October 19, 2000
Before REAVLEY, BENAVIDES, and DENNIS, Circuit Judges.
PER CURIAM:*
Appellant Julius Heard, III, appeals his conviction for
conspiracy to commit bankruptcy and tax fraud, aiding and abetting
concealment of proceeds from a bankruptcy estate, aiding and
abetting a failure to report income, and underreporting income.
* 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 R. 47.5, the Court has determined that this opinion should not be published and is not precedent except under the limited circumstances set forth in 5TH CIR.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.
1 Appellant is a certified public accountant who performed accounting
services for his father-in-law, Mr. Delwin Morton, including
preparing personal and professional tax returns. Appellant was
charged with, inter alia, conspiring with Mr. Morton to knowingly
and fraudulently conceal certain property belonging to the
bankruptcy estate by reporting false income, shifting income,
concealing partnership distributions, and preparing false income
tax returns. At trial, the government presented evidence that
Appellant had provided his father-in-law with CPA services and
advice in connection with alleged tax evasion transactions.
Appellant argues that the district court erred in applying
Federal Rule of Evidence 403, by admitting the prosecution’s unduly
prejudicial evidence of his father-in-law’s bad character and by
excluding his expert’s testimony explaining certain accounting and
business practices. Appellant failed to object at trial to the
admission or exclusion of most of the evidence that he complains of
on appeal. He did object, however, to the introduction of evidence
related to his father-in-law’s indictment and to the exclusion of
the testimony of his expert witness.
“Where the party challenging the trial court’s evidentiary
ruling makes a timely objection, we review that ruling under an
abuse-of-discretion standard.” United States v. Hernandez-Guevara,
162 F.3d 862, 869 (5th Cir. 1998). However, “[p]lain errors or
defects affecting substantial rights may be noticed although they
2 were not brought to the attention of the court.” Fed. R. Crim. P.
52(b). We apply Rule 52(b) as outlined in United States v. Olano,
507 U.S. 725 (1993). “Under that test, before an appellate court
can correct an error not raised at trial, there must be (1)
‘error,’ (2) that is ‘plain,’ and (3) that ‘affect[s] substantial
rights.’ If all three conditions are met, an appellate court may
then exercise its discretion to notice a forfeited error, but only
if (4) the error " ' "seriously affect[s] the fairness, integrity,
or public reputation of judicial proceedings." ' "” Johnson v.
United States, 520 U.S. 461, 466-67 (1997) (quoting United States
v. Olano, 507 U.S. at 732, in turn quoting United States v. Young,
470 U.S. 1, 15 (1985), in turn quoting United States v. Atkinson,
297 U.S. 157, 160 (1936))(internal citations omitted).
From a review of the record, we conclude that the district
court did not abuse its discretion in the evidentiary rulings to
which the Appellant objected at trial. Appellant’s counsel, in his
opening statement, asserted that, “[Appellant] never knowingly and
purposefully helped Mr. Morton do anything wrong or improper,” and
“[Appellant] had no reason to even suspect, much less know, that
Del Morton was involved in fraudulent doings.” The government
introduced a letter written by Appellant to the Internal Revenue
Service asking for additional time to prepare a return for his
father-in-law because of his father-in-law’s indictment, and on
cross examination, questioned Appellant about the indictment.
Appellant’s reference to his father-in-law’s indictment by a grand
3 jury of illegal conduct was relevant to show that Appellant knew of
both the indictment and the true nature of the subsequent
activities in which he participated with his father-in-law. It was
also relevant to impeach the credibility of his testimony that he
was unaware of the illegal nature of his father-in-law’s
activities. Furthermore, the district court instructed the jury
that it should take into consideration that the father-in-law had
been acquitted of the particular charge made in the indictment.
The district court properly, thoroughly, and repeatedly instructed
the jury before, during, and after evidence was taken that
Appellant could not be convicted merely because of his association
with another person who committed a crime, and that he was presumed
innocent until proven guilty beyond a reasonable doubt based upon
the jury’s consideration of all of the evidence as instructed.
The trial court did not abuse its discretion by excluding the
testimony of Appellant’s accounting and business practices expert
because the expert’s specialized knowledge would have been of
little, if any, relevance or assistance to the jury in this
particular case. The government’s case did not call into question
the facial propriety of the practices of the Appellant or his
father-in-law. Instead, the prosecution sought to prove with
extrinsic evidence that the Appellant and his father-in-law used
apparently typical and legitimate practices to conceal and
misrepresent their illegitimate activities. Consequently, the
district court did not abuse its discretion in ruling that, based
4 on the material issues of this case, the expert’s specialized
knowledge of the accounting and business practices used would not
be of relevant assistance to the jury in understanding or deciding
the crucial credibility issues related to whether the Appellant
knew that the practices were being used to conceal or misrepresent
true facts. See United States v. West, 22 F.3d 586, 600 (5th Cir.
1994)(upholding exclusion of expert testimony where jury was
“perfectly capable of determining, based on the evidence
presented,” the contested issue).
As for the evidence objected to for the first time on appeal,
we see no error in its introduction, much less error that was
“plain,” that “affect[s] substantial rights” and that “seriously
affect[s] the fairness, integrity, or public reputation of judicial
proceedings.” Johnson, 520 U.S. at 466-67 (internal citations
omitted). The charges against the Appellant involved his alleged
knowledge and conduct that was inextricably related to the alleged
unlawful activities of his father-in-law. The unlawfulness of the
father-in-law’s activities was not genuinely at issue; the true
extent of Appellant’s knowledge when he participated and assisted
Free access — add to your briefcase to read the full text and ask questions with AI
UNITED STATES COURT OF APPEALS For the Fifth Circuit
No. 99-40530
United States of America,
Plaintiff-Appellee,
VERSUS
Julius L. Heard, III,
Defendant-Appellant.
Appeal from the United States District Court For the Eastern District of Texas (98-CR-16-2) October 19, 2000
Before REAVLEY, BENAVIDES, and DENNIS, Circuit Judges.
PER CURIAM:*
Appellant Julius Heard, III, appeals his conviction for
conspiracy to commit bankruptcy and tax fraud, aiding and abetting
concealment of proceeds from a bankruptcy estate, aiding and
abetting a failure to report income, and underreporting income.
* 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.
1 Appellant is a certified public accountant who performed accounting
services for his father-in-law, Mr. Delwin Morton, including
preparing personal and professional tax returns. Appellant was
charged with, inter alia, conspiring with Mr. Morton to knowingly
and fraudulently conceal certain property belonging to the
bankruptcy estate by reporting false income, shifting income,
concealing partnership distributions, and preparing false income
tax returns. At trial, the government presented evidence that
Appellant had provided his father-in-law with CPA services and
advice in connection with alleged tax evasion transactions.
Appellant argues that the district court erred in applying
Federal Rule of Evidence 403, by admitting the prosecution’s unduly
prejudicial evidence of his father-in-law’s bad character and by
excluding his expert’s testimony explaining certain accounting and
business practices. Appellant failed to object at trial to the
admission or exclusion of most of the evidence that he complains of
on appeal. He did object, however, to the introduction of evidence
related to his father-in-law’s indictment and to the exclusion of
the testimony of his expert witness.
“Where the party challenging the trial court’s evidentiary
ruling makes a timely objection, we review that ruling under an
abuse-of-discretion standard.” United States v. Hernandez-Guevara,
162 F.3d 862, 869 (5th Cir. 1998). However, “[p]lain errors or
defects affecting substantial rights may be noticed although they
2 were not brought to the attention of the court.” Fed. R. Crim. P.
52(b). We apply Rule 52(b) as outlined in United States v. Olano,
507 U.S. 725 (1993). “Under that test, before an appellate court
can correct an error not raised at trial, there must be (1)
‘error,’ (2) that is ‘plain,’ and (3) that ‘affect[s] substantial
rights.’ If all three conditions are met, an appellate court may
then exercise its discretion to notice a forfeited error, but only
if (4) the error " ' "seriously affect[s] the fairness, integrity,
or public reputation of judicial proceedings." ' "” Johnson v.
United States, 520 U.S. 461, 466-67 (1997) (quoting United States
v. Olano, 507 U.S. at 732, in turn quoting United States v. Young,
470 U.S. 1, 15 (1985), in turn quoting United States v. Atkinson,
297 U.S. 157, 160 (1936))(internal citations omitted).
From a review of the record, we conclude that the district
court did not abuse its discretion in the evidentiary rulings to
which the Appellant objected at trial. Appellant’s counsel, in his
opening statement, asserted that, “[Appellant] never knowingly and
purposefully helped Mr. Morton do anything wrong or improper,” and
“[Appellant] had no reason to even suspect, much less know, that
Del Morton was involved in fraudulent doings.” The government
introduced a letter written by Appellant to the Internal Revenue
Service asking for additional time to prepare a return for his
father-in-law because of his father-in-law’s indictment, and on
cross examination, questioned Appellant about the indictment.
Appellant’s reference to his father-in-law’s indictment by a grand
3 jury of illegal conduct was relevant to show that Appellant knew of
both the indictment and the true nature of the subsequent
activities in which he participated with his father-in-law. It was
also relevant to impeach the credibility of his testimony that he
was unaware of the illegal nature of his father-in-law’s
activities. Furthermore, the district court instructed the jury
that it should take into consideration that the father-in-law had
been acquitted of the particular charge made in the indictment.
The district court properly, thoroughly, and repeatedly instructed
the jury before, during, and after evidence was taken that
Appellant could not be convicted merely because of his association
with another person who committed a crime, and that he was presumed
innocent until proven guilty beyond a reasonable doubt based upon
the jury’s consideration of all of the evidence as instructed.
The trial court did not abuse its discretion by excluding the
testimony of Appellant’s accounting and business practices expert
because the expert’s specialized knowledge would have been of
little, if any, relevance or assistance to the jury in this
particular case. The government’s case did not call into question
the facial propriety of the practices of the Appellant or his
father-in-law. Instead, the prosecution sought to prove with
extrinsic evidence that the Appellant and his father-in-law used
apparently typical and legitimate practices to conceal and
misrepresent their illegitimate activities. Consequently, the
district court did not abuse its discretion in ruling that, based
4 on the material issues of this case, the expert’s specialized
knowledge of the accounting and business practices used would not
be of relevant assistance to the jury in understanding or deciding
the crucial credibility issues related to whether the Appellant
knew that the practices were being used to conceal or misrepresent
true facts. See United States v. West, 22 F.3d 586, 600 (5th Cir.
1994)(upholding exclusion of expert testimony where jury was
“perfectly capable of determining, based on the evidence
presented,” the contested issue).
As for the evidence objected to for the first time on appeal,
we see no error in its introduction, much less error that was
“plain,” that “affect[s] substantial rights” and that “seriously
affect[s] the fairness, integrity, or public reputation of judicial
proceedings.” Johnson, 520 U.S. at 466-67 (internal citations
omitted). The charges against the Appellant involved his alleged
knowledge and conduct that was inextricably related to the alleged
unlawful activities of his father-in-law. The unlawfulness of the
father-in-law’s activities was not genuinely at issue; the true
extent of Appellant’s knowledge when he participated and assisted
in those actions was the crucial issue. The parties did not
seriously question the facts of the father-in-law’s actions as both
relied to a large extent on a common version of them to explain
whether the Appellant’s involvement constituted criminal activity.
The Appellant’s defense was based primarily on his testimony that
he was unaware that his accounting services and other assistance
5 were being used by his father-in-law for unlawful purposes. The
prosecution severely challenged his credibility and innocence with
clearly relevant and admissible evidence. For instance, when
Appellant was asked on cross-examination about a bankruptcy
schedule he had prepared that failed to disclose a distribution by
a partnership of which he was a member, Appellant admitted that it
caused him concern. The trustee of his father-in-law’s bankruptcy
estate verified that distributions for several years shown in
partnership returns prepared by Appellant were not listed as assets
of the estate when they should have been. Another witness
testified that records of the distributions were available to
Appellant and that he prepared tax returns for the partnership, but
did not give the information to the bankruptcy trustee. Yet
another witness and even Appellant himself both testified that
Appellant also did not list the distributions as income on his
father-in-law’s personal returns, which Appellant prepared.
Furthermore, Appellant also admitted that he characterized an
alleged “land sale” differently after the sale was complete by
preparing a fraudulent trustee agreement. Additionally, the
government presented evidence of tax returns prepared by Appellant
that had misrepresented personal expenses as deductible business
expenses and Appellant’s failure to amend the returns even after he
claimed to have discovered the errors.
Finally, Appellant also challenges factual determinations made
by the judge at the sentencing phase under Apprendi v New Jersey,
6 120 S. Ct. 2348 (2000). Although Appellant argues that Apprendi
should be applied to cases in which sentencing determinations
merely increase the sentence within the statutory range, we decline
to extend Apprendi, which held, “Other than the fact of a prior
conviction, any fact that increases the penalty for a crime beyond
the prescribed statutory maximum must be submitted to a jury, and
proved beyond a reasonable doubt.” 120 S.Ct. at 2362-63. Because
the factual determinations made by the district court did not
increase Appellant’s sentence beyond the statutory maximum,
Appellant’s argument is without merit. See United States v.
Doggett, 2000 WL 1481160, *4 (5th Cir. 2000); United States v.
Meshack, 2000 WL 1218437 (5th Cir. 2000).
The judgment of conviction rendered by the district court is
AFFIRMED.