NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT _____________
No. 17-1144 _____________
UNITED STATES OF AMERICA
v.
STEVEN J. LYNCH,
Appellant ____________
On Appeal from the United States District Court for the Western District of Pennsylvania (D.C. No. 2:14-cr-00181-001) District Judge: Hon. Arthur J. Schwab
Submitted Pursuant to Third Circuit L.A.R. 34.1(a) February 8, 2018
Before: CHAGARES, SCIRICA, and RENDELL, Circuit Judges
(Filed: May 29, 2018)
____________
OPINION ____________
This disposition is not an opinion of the full court and, pursuant to I.O.P. 5.7, does not constitute binding precedent. CHAGARES, Circuit Judge.
Appellant Steven Lynch appeals from his conviction after a jury trial for tax
evasion in violation of 26 U.S.C. § 7202. Lynch raises a profusion of claims challenging
nearly every aspect of the trial, including that (1) much of the evidence was inadmissible,
(2) his Confrontation Clause rights were violated, (3) the Government failed to prove that
Lynch violated § 7202; (4) the Government engaged in prosecutorial misconduct; (5) the
District Court’s jury instructions were erroneous; (6) the Government withheld evidence
in violation of Brady v. Maryland, 373 U.S. 83 (1963); and (7) the District Court’s
sentence was improper. Because these arguments lack merit, we will affirm.
I.
We write for the parties and so recount only the facts necessary to our decision.
Since 2001, Lynch — along with his minority partners — owned and operated the
Iceoplex at Southpointe LLC, a facility that included an ice skating rink, indoor field,
health club, and sports bar (collectively “Iceoplex”). The Iceoplex originally leased the
space for the sports bar, Jay’s Sports Bar and Grill, but Lynch and two partners acquired
Jay’s in 2006. Lynch also owned Alder Street Management, which operated out of the
Iceoplex offices. In his capacity as either president or treasurer of these entities, Lynch
had near-total authority over financial decisions. Significantly, Lynch exclusively
prepared, signed, and filed with the IRS the entities’ quarterly employment tax returns.
Lynch was accordingly the “responsible person” for collecting and paying the entities’
“trust fund” taxes, meaning that he had the duty to withhold income, Social Security, and
Medicare taxes from the entities’ employees and to pay them to the IRS. Although the
2 entities withheld these taxes, starting in 2003 they failed timely to remit them to the IRS.
At times during the over decade-long period during which the entities failed to pay over
their trust fund taxes, Lynch directed the payment of wages to the entities’ employees
through shell companies, including SRA Services LLC and SRA Employee Services
LLC.
In July 2014, Lynch was indicted on ten counts of willfully failing to pay over
taxes withheld from the wages of employees paid through SRA Services and SRA
Employee Services during the quarters ending in 2008–2010, in violation of 26 U.S.C. §
7202. In December 2015, a superseding indictment was issued charging eighteen
additional counts of willfully failing to pay over withheld taxes paid through SRA
Employee Services, the Iceoplex at Southpointe, LLC, Alder Street Management
Company, and Jay’s Sports Bar and Restaurant, Inc., during the quarters ending in 2011–
2015. A jury convicted Lynch of 16 counts, consisting of all the § 7202 charges from the
second quarter of 2012 and later, save the second quarter of 2014 relating to Alder Street
Management. At sentencing, the District Court, considering uncharged and acquitted
conduct, determined that Lynch’s scheme resulted in a tax loss of $2,885,898, yielding a
base offense level of 22 and a United States Sentencing Guidelines range of 41 to 51
months of imprisonment. The District Court sentenced Lynch to 48 months of
imprisonment followed by 36 months of supervised release and ordered him to pay
restitution of $793,145 (relating to the tax loss from the quarters for which Lynch was
convicted), a $75,000 fine, and a $1,600 special assessment. Lynch timely appealed.
3 II.1
A.
Lynch challenges the admissibility of the summary charts that the Government
introduced into evidence, asserting that they relied on inadmissible underlying
documents, were not accompanied by the testimony of the individual who prepared them
in the first instance, were improperly admitted through a lay witness, and were
inaccurate. As explained below, these contentions are meritless.2
Federal Rule of Evidence 1006 permits a party to “use a summary, chart, or
calculation to prove the content of voluminous writings . . . that cannot be conveniently
examined in court,” where the summary would be helpful to the jury. See United States
v. Bansal, 663 F.3d 634, 668 (3d Cir. 2011). Rule 1006 summaries are admissible only if
they rely upon admissible materials, United States v. Pelullo, 964 F.2d 193, 204 (3d Cir.
1992), and must be supported by a foundation showing that the exhibit is an accurate
summary of the underlying materials, Pritchard v. Liggett & Myers Tobacco Co., 295
F.2d 292, 301 (3d Cir. 1961). Testimony concerning the “authenticity and accuracy” of a
summary may be provided by a person who supervised its preparation or carefully
reviewed its content. United States v. Scales, 594 F.2d 558, 563 (6th Cir. 1979).
1 The District Court had jurisdiction under 18 U.S.C. § 3231 and we have appellate jurisdiction under 28 U.S.C. § 1291 and 18 U.S.C. § 3742. 2 We review de novo the District Court’s interpretation of the Federal Rules of Evidence, but assess for abuse of discretion its decisions concerning the admissibility of evidence. United States v. Serafini, 233 F.3d 758, 768 n.14 (3d Cir. 2000). 4 1.
Lynch argues that the underlying IRS and bank records — which he admits
qualify as business records for the purpose of Rule 803(6)’s hearsay exception — were
never authenticated and thus could not serve as the basis for the summaries. At the start
of trial, however, Lynch consented to the documents’ admission into evidence. Lynch
cannot now complain that the Government did not thereafter waste its argument time
reestablishing the foundation of already admitted documents.
2.
The Government’s summary exhibits were compiled by IRS agent Paul Bauer
over the course of his investigation. In presenting its summary exhibits under Rule 1006,
however, the Government offered a different IRS agent (Agent Lisa Gapsky), whom
Lynch asserts was unfamiliar with the reasons for why certain information was or was not
included in the summaries. Lynch argues that Rule 1006 requires that the summary
preparer be made available to testify. Rule 1006 contains no such requirement. Gapsky
verified every data entry back to its underlying document and confirmed that the
formulas were operating correctly in the charts, which was sufficient to establish that the
summaries were accurate. See Scales, 594 F.2d at 563. Nor did Gapsky need to be an
expert in order to introduce the summaries, as no special expertise beyond that which is
expected of an IRS agent was needed to accomplish this task. See Asplundh Mfg. Div. v.
Benton Harbor Eng’g, 57 F.3d 1190, 1201 (3d Cir. 1995).
5 3.
Lynch next challenges the accuracy of Exhibit G-94, which identifies the net
withdrawals from six Lynch-controlled bank accounts. To ensure that the chart captured
only expenditures going to third parties, it cross-referenced each payment against the
other five accounts, to see if the payment was just a reshuffling of assets. On cross-
examination, Lynch identified other related accounts that were not included in the chart.
The District Court denied Lynch’s request to reject the exhibit, explaining that Gapsky
had sufficiently shown that the exhibit accurately summarized the six documents and that
the jury could determine how much credibility to accord the summary.
A Rule 1006 summary chart need not accurately reflect all the facts in the case; it
merely must accurately represent the facts that it purports to summarize. “So long as they
are accurate, however, such summaries may present only one party’s side of the case.” 2
McCormick on Evid. § 241 (7th ed.). The fact that G-94 did not include all the related
accounts does not undermine its admissibility because it accurately reflected the accounts
it did include. It was up to Lynch, on cross-examination, to show the jury that there was
more to the story, and he effectively did so. See, e.g., United States v. Nivica, 887 F.2d
1110, 1125–26 (1st Cir. 1989) (concluding that summaries’ failure to reflect “total
financial activity” “affect[s] . . . weight rather than the admissibility” and that “if there
were gaps in the charts, the defense . . . had every opportunity to exploit them”).
B.
Lynch argues next that his confrontation rights were violated when the
Government was permitted to present the summaries based on Gapsky’s testimony,
6 without making Agent Bauer available for testimony. Lynch did not raise this issue with
the District Court, so we review for plain error. See United States v. Lopez, 650 F.3d
952, 959 (3d Cir. 2011). “Plain error exists only when (1) an error was committed (2)
that was plain, and (3) that affected the defendant’s substantial rights.” Id. (quoting
United States v. Lessner, 498 F.3d 185, 192 (3d Cir. 2007)). A “plain” error is one that is
“clear” or “obvious.” United States v. Olano, 507 U.S. 725, 734 (1993). Even upon
finding a plain error, a court of appeals has discretion whether to grant relief and “should
correct a plain forfeited error affecting substantial rights if the error ‘seriously affect[s]
the fairness, integrity or public reputation of judicial proceedings.’” Id. at 736 (alteration
in original) (quoting United States v. Atkinson, 297 U.S. 157, 160 (1936)).
The Confrontation Clause of the Sixth Amendment provides that, “[i]n all criminal
prosecutions, the accused shall enjoy the right . . . to be confronted with the witnesses
against him.” A witness is any individual who bears testimony against the defendant, and
such testimony can be contained in any functional equivalent of in-court testimony. See
Crawford v. Washington, 541 U.S. 36, 51 (2004). To fall within the ambit of the
Confrontation Clause, then, a proposed exhibit must constitute an out-of-court statement
containing testimonial hearsay, meaning that it was “a ‘solemn declaration or affirmation
made for the purpose of establishing or proving some fact;’ and . . . was made primarily
for the purpose of ‘prov[ing] past events potentially relevant to later criminal
prosecution.’” United States v. Stimler, 864 F.3d 253, 272 (3d Cir. 2017) (footnote
omitted) (first quoting Melendez-Diaz v. Massachusetts, 557 U.S. 305, 310 (2009); then
quoting Michigan v. Bryant, 562 U.S. 344, 361 (2011)). Lynch asserts that the
7 summaries — documents created out of court and in anticipation of the trial, introduced
for the purposes of proving a fact — constitute testimonial hearsay and must be testified
to by Agent Bauer.3
The resolution of this issue turns on the fact-specific question of whether the
summary document itself was a testimonial statement; that is, whether it simply
consolidated data from other admissible documents and ran basic calculations on that
data, or whether instead it was based on the preparer’s own assumptions and subjective
choices about what data is relevant.4 In this Circuit, a district court’s finding that the
exhibits qualified under Rule 1006 is itself a determination that they are not infected with
the preparer’s own subjective views. Prior to permitting the use of a summary document
under Rule 1006, the district court must assure that “the summation accurately
summarizes the materials involved by not referring to information not contained in the
original.” Pritchard, 295 F.2d at 300–01; see also Eichorn v. AT&T Corp., 484 F.3d 644,
650 (3d Cir. 2007). The District Court’s Rule 1006 finding would tend to indicate that
the summary documents were not independent statements or conclusions concerning the
data in the original documents.
3 The IRS and bank records that underlie the summaries are non-testimonial and so on their own do not trigger the Confrontation Clause. Crawford, 541 U.S. at 56. 4 Indeed, two of our sister courts have concluded that a summary that merely consolidates or reformulates the underlying evidence cannot be considered a statement in its own right, and so does not fall within the ambit of Confrontation Clause. See, e.g., United States v. Davis, 531 F. App’x 65, 69 (2d Cir. 2013) (concluding that edited video footage was not testimonial because “the act of editing the video is not an out-of-court statement at all”); United States v. Keck, 643 F.3d 789, 796 (10th Cir. 2011) (holding that copying information from underlying non-testimonial records does “not constitute a Confrontation Clause violation”). 8 We need not, however, firmly conclude whether the summaries here fell on the
wrong side of the subjectivity line because the resolution of that issue turns on factual
determinations about which reasonable minds could differ. Under plain error review, it is
certainly not clear that Lynch’s Confrontation Clause right was violated by allowing
Gapsky to testify to exhibits that were not obviously statements in their own right.
Accordingly, we deny Lynch’s claim.
C.
Lynch next argues that the Government failed to prove beyond a reasonable doubt
the elements that Lynch asserts are required to find him guilty under § 7202. We
disagree. Challenges to the sufficiency of the evidence are assessed by viewing “the
record in the light most favorable to the prosecution to determine whether any rational
trier of fact could have found proof of guilt[] beyond a reasonable doubt.” United States
v. Caraballo-Rodriguez, 726 F.3d 418, 430 (3d Cir. 2013) (en banc) (alteration in
original) (quoting United States v. Brodie, 403 F.3d 123, 133 (3d Cir. 2005)).
1.
Section 7202 provides that “[a]ny person required under this title to collect,
account for, and pay over any tax imposed by this title who willfully fails to collect or
truthfully account for and pay over such tax shall . . . be guilty of a felony.” 26 U.S.C §
7202. Accordingly, the Government must prove beyond a reasonable doubt that
(1) Lynch was a person required to “collect, account for, and pay over” the firms’
employment taxes, (2) he failed to do so, and (3) that failure was willful. Whether an
individual is a “responsible person” required to pay over the withheld taxes “is a matter
9 of status, duty, or authority, not knowledge.” Greenberg v. United States, 46 F.3d 239,
243 (3d Cir. 1994) (quoting Brounstein v. United States, 979 F.2d 952, 954 (3d Cir.
1992)).5 In reaching this determination, we have considered the following factors:
(1) contents of the corporate bylaws, (2) ability to sign checks on the company’s bank account, (3) signature on the employer’s federal quarterly and other tax returns, (4) payment of other creditors in lieu of the United States, (5) identity of officers, directors, and principal stockholders in the firm, (6) identity of individuals in charge of hiring and discharging employees, and (7) identity of individuals in charge of the firm’s financial affairs.
Id. (quoting Brounstein, 979 F.2d at 954–55). There is no requirement that the defendant
meet all these factors in order to be deemed a responsible person. See, e.g., United States
v. DeMuro, 677 F.3d 550, 559, 566 (3d Cir. 2012) (considering only four factors).
“Willfulness in a tax evasion case is ‘a voluntary, intentional violation of a known
legal duty.’” Id. at 557 (quoting Cheek v. United States, 498 U.S. 192, 201 (1991)).
Thus, if a defendant can show “that he had a good faith belief that he was not violating
the tax code, regardless of whether that belief was objectively reasonable, he has
established that he did not act willfully.” Id. The burden remains on the Government to
disprove the defendant’s good faith. Cheek, 498 U.S. at 202.
Lynch first claims that he is not a “person” under Title 26 because that term is
limited to the definition included in § 7343, which does not include an “individual.” We
5 The Court in Greenberg dealt with 26 U.S.C § 6672 — the civil corollary to § 7202 — but the relevant language of the two statutes is nearly identical, see Slodov v. United States, 436 U.S. 238, 245 (1978) (“[Section] 7202 . . . tracks the wording of § 6672 . . . .”), and this Court has applied the test set out in Greenberg to § 7202, see United States v. DeMuro, 677 F.3d 550, 559 (3d Cir. 2012). 10 have explicitly rejected this argument as frivolous. United States v. Karlin, 785 F.2d 90,
91 (3d Cir. 1986) (discussing § 7203, which mirrors § 7202’s language); see also United
States v. Latham, 754 F.2d 747, 750 (7th Cir. 1985) (rejecting as “inane” defendant’s
argument “that 26 U.S.C. § 7343 defining ‘person’ does not include natural persons”).
Because Lynch is “an individual,” 26 U.S.C. § 7701, he is a person under Title 26.
3.
Much of Lynch’s argument that the Government failed to show that he was a
responsible person relies on his baseless contention that the IRS filings and bank records
were improperly admitted into evidence. Those documents clearly showed that Iceoplex
and Alder Street owed a substantial amount of trust fund taxes during the indictment
period, that Lynch had signature authority over 40 of the 50 bank accounts associated
with the entities, and exclusively signed and filed quarterly tax returns for SRA
Employee Services (as Treasurer) and Alder Street, Iceoplex, and Jay’s (as President).
Other evidence at trial overwhelmingly showed that Lynch had near-total control over the
entities’ finances. This included testimony that Lynch admitted that he determined
financial policy. This is substantial evidence that a rational trier of fact could have relied
upon to establish proof of control beyond a reasonable doubt.
4.
Lynch argues that § 7202 does not contain within it any language specifying a due
date and so argues that his late payments do not alone suffice to establish that he failed to
pay over the taxes. This argument fails on its face. Section 7202 applies to taxes
“imposed by this title,” and § 6151 makes clear that “when a return of tax is required
11 under this title or regulations, the person required to make such return . . . shall pay such
tax at the time and place fixed for filing the return.” See, e.g., United States v. Quinn,
No. 09-cv20075 (JWL), 2011 WL 382369, at *1 (D. Kan. Feb. 3, 2011) (“[A] ‘failure to
pay over’ necessarily incorporates the concept of a deadline, as the failure must be
measured as of some particular time.”), aff’d, 566 F. App’x 659 (10th Cir. 2014). Thus,
where a payment is late, the responsible person has by definition failed to pay it over and
if that failure was willful, that person has violated § 7202.
5.
Ample evidence also existed to allow the jury to conclude beyond a reasonable
doubt that Lynch’s failure to pay over the taxes when due was not in good faith, but
instead was a willful attempt to avoid paying as much of the amount owed as possible.
This included evidence that Lynch: was repeatedly told by the IRS that the entities’
employment taxes were unpaid and that failure to pay subjected him to criminal liability,
paid off a substantial portion of unpaid taxes the day after hearing he was the subject of a
grand jury investigation, shifted payment structures and maintained low account balances
to avoid IRS levies, and directed payments to employees, creditors, and himself while
failing to pay the overdue trust fund taxes. See, e.g., DeMuro, 677 F.3d at 558–59
(noting evidence of spending while taxes are due “belies [defendants’] assertions that
they were sincerely attempting to pay their back taxes as expeditiously as possible”);
United States v. McKee, 506 F.3d 225, 248–49 (3d Cir. 2007) (explaining that evidence
that “a defendant became aware of the tax improprieties inherent in [his] conduct” shows
willfulness); see also, e.g., United States v. Boisseau, 841 F.3d 1122, 1127 (10th Cir.
12 2016) (finding evidence of willfulness where defendant “alter[ed] the method of
compensation to defeat a levy”). This was more than sufficient evidence to support the
jury’s finding of willfulness beyond a reasonable doubt.
III.
Lynch next asserts that the Government engaged in various forms of misconduct
throughout the trial. A prosecutor’s comments may rise to a constitutional violation
where “in context and in light of the entire trial,” Moore v. Morton, 255 F.3d 95, 107 (3d
Cir. 2001), they “so infected the trial with unfairness as to make the resulting conviction
a denial of due process,” Donnelly v. DeChristoforo, 416 U.S. 637, 643 (1974). Because
Lynch did not raise a prosecutorial misconduct claim below, we review for plain error.
Lynch alleges that although he is not an “employer” so does not personally owe
taxes or employ employees, the Government made statements implying that Lynch
personally owed taxes or employed people. However, as a “responsible person,” Lynch
— although not the employer — was responsible for the collection and payment of the
trust fund taxes. It was no misrepresentation for the Government to argue that Lynch had
a duty to pay these taxes or that he failed to do so. Likewise, because Lynch was a
controlling owner, it is perhaps inaccurate, but not misleading or unfair, to describe the
entities’ employees as Lynch’s employees. See Rolan v. Coleman, 680 F.3d 311, 325 (3d
Cir. 2012). Nor did the Government argue to the jury that Lynch was the employer. It
argued, and the evidence conclusively shows, that Lynch was the responsible person. In
13 context, any misleading comments did not render the trial unfair. Lynch cannot show
plain error because the statements did not affect his substantial rights.
Lynch also contends that his Fifth Amendment right against self-incrimination was
violated when Special Agent Lauth, a Government witness, testified that after telling
Lynch that he was the subject of a Grand Jury investigation, Lynch replied that he did not
want to talk and wanted an attorney. Lynch argues that this revelation implied to the jury
that he was guilty. Lynch did not object at trial, and his claim fails.
The Government did not intentionally elicit this testimony. Rather, the record
reflects that the Government presented Agent Lauth as a witness for the purpose of
showing only that Lynch was informed that he was the subject of the Grand Jury
investigation, but that Lauth gave a narrative answer. The Government asked no
follow-up questions, and although it discussed Lauth’s testimony during its summation,
did not mention Lynch’s refusal to talk or request for counsel. In any event, Lynch again
cannot show that the error was plain or that it affected his substantial rights.
IV.
Lynch next challenges that the District Court’s jury instructions improperly: (1)
defined “person” to include an individual, (2) read a due date into § 7202, (3) did not
require the Government to prove that Lynch was under a legal duty to pay over the taxes;
(4) did not require the Government to affirmatively disprove the absence of good faith;
and (5) permitted the jury to find that Lynch was a “responsible person” if he had the
“authority required to exercise significant control . . . regardless of whether that
14 individual exercises such control in fact.” Appendix (“App.”) 1255. “We review the
legal accuracy of a district court’s jury instructions de novo. Absent an affirmative
misstatement of the applicable law, our review is for an abuse of discretion.” United
States v. Maury, 695 F.3d 227, 261 (3d Cir. 2012) (citation omitted). Where the claim
was not raised below, we review for plain error. United States v. Xavier, 2 F.3d 1281,
1287 (3d Cir. 1993).
As we have explained, Lynch’s first two contentions are meritless. His third
contention fails, too, because the District Court properly instructed the jury on the
Government’s burden. See App. 1250.
His fourth claim was not raised below and is unavailing. The Government bears
the burden of proving willfulness and so its failure to negate a good faith defense
amounts to a failure to prove that the defendant knew of, and intentionally violated, his
duty to pay taxes. These are not two separate elements that the Government must prove,
but two sides of the same coin. See Cheek, 498 U.S. at 201–02 (identifying the
Government’s burden to prove willfulness, then noting that “carrying this burden”
requires that the Government disprove the defendant’s good faith, because such a claim is
inconsistent with willfulness). The District Court’s instructions adequately stated this
standard.
His fifth claim fares no better. He argues, again for the first time on appeal, that
this Court requires a finding of an actual exercise of significant control to be held liable
as a responsible person. But we have held that whether someone is a responsible person
“is a matter of status, duty, or authority,” Greenberg, 46 F.3d at 243 (quoting Brounstein,
15 979 F.2d at 954), and a number of the factors that we consider depend on authority or
status, not action, see id. (considering contents of bylaws, ability to sign checks, identity
of officers, identity of individuals with power to hire or discharge, and identity of
individual in charge of finances). The instruction was not plainly erroneous and given
the substantial evidence of Lynch’s exclusive control over the entities’ finances, any error
did not affect substantial rights.
Lynch’s penultimate claim is that the prosecution violated Brady by failing to turn
over the Special Agent Report (“SAR”) authored by Agent Bauer, who did not testify at
trial. Lynch asserts his belief that the report contains favorable evidence “that would
have bolstered Appellant’s good faith defense, impeachment evidence that would have
been valuable to impeach the testimony of the government’s witnesses and evidence that
would have helped the defense team show the IRS investigation was not thorough.”
Lynch Br. 69–70. We review de novo the District Court’s legal conclusions and review
its factual findings for clear error. United States v. Ramos, 27 F.3d 65, 67 (3d Cir. 1994).
To make out a Brady claim, Lynch must show that (1) the “evidence at issue [was]
favorable” to him (that is, was exculpatory or impeaching), (2) the “evidence [was]
suppressed by the State, either willfully or inadvertently,” and (3) he was prejudiced
because the suppressed evidence was “material.” Strickler v. Greene, 527 U.S. 263, 281–
82 (1999); Kyles v. Whitley, 514 U.S. 419, 432–34 (1995). Evidence is material “if there
is a reasonable probability that, had the evidence been disclosed to the defense, the result
16 of the proceeding would have been different.” United States v. Bagley, 473 U.S. 667,
682 (1985). Lynch cannot show that the SAR report was favorable or material.
All the information underlying the SAR report was disclosed to the defense, save
for Bauer’s own theories of the case and prosecution recommendations. Lynch’s good
faith defense depends on his own mental state at the time of the offenses, so Bauer’s ex
post views on the matter have no relevance to that determination. Nor could the report,
which reflected only Bauer’s recommendations, have been used as impeachment
evidence, given that Bauer did not testify. A witness generally may not be impeached
with another person’s statement. See, e.g., 28 Wright & Gold, Fed. Prac. & Proc. Evid.,
§ 6203 (2d ed. 2012) (collecting cases). Finally, there is no basis for Lynch’s claim that
the report would show that the IRS’s investigation was not thorough. A defendant must
“raise[] a colorable claim” that undisclosed documents created by government agents
“contained exculpatory material that was material to their defense” and was not included
in disclosed documents. Ramos, 27 F.3d at 71. If the IRS’s investigation was sloppy,
Lynch should have made this argument by reference to information contained in or left
out of the underlying documents. Lynch’s unsupported belief that such exculpatory
material may be found in the SAR is insufficient, as “[w]e think it unwise to infer the
existence of Brady material based upon speculation alone.” Id. at 71. But even if the
SAR report could cast doubt on the IRS’s investigation, the evidence at trial supplied
almost incontrovertible proof of Lynch’s guilt. There is therefore no reasonable
probability that an attack on the skill with which the IRS undertook the investigation
would have resulted in a different outcome.
17 VI.
Lynch’s final contention is that the District Court erred in concluding that the tax
loss for sentencing purposes was $2,885,898, which included within it unpaid taxes from
quarters for which Lynch was acquitted and not charged with any offense, and payments
that were paid late. Lynch asserts that the District Court’s inclusion of these sums in the
tax loss violated his Due Process rights and his right to trial by jury. We disagree.
We review factual findings, such as the calculation of a tax loss, for clear error,
United States v. Roman, 121 F.3d 136, 140 (3d Cir. 1997), and the District Court’s
interpretation of the Sentencing Guidelines, including its definition of what constitutes
“loss,” de novo, United States v. Fumo, 655 F.3d 288, 309 (3d Cir. 2011). “In
determining the total tax loss attributable to the offense . . . all conduct violating the tax
laws should be considered as part of the same course of conduct or common scheme or
plan unless the evidence demonstrates that the conduct is clearly unrelated.” U.S.S.G. §
2T1.1 cmt. n.2. Here, the District Court considered the related conduct in this case,
which was Lynch’s failure to pay over taxes to the IRS across multiple years, beginning
prior to the quarters for which Lynch was convicted and continuing after the indictment
period. This finding was amply supported by the record. Because “a jury’s verdict of
acquittal does not prevent the sentencing court from considering conduct underlying the
acquitted charge, so long as that conduct has been proved by a preponderance of the
evidence,” the District Court’s reliance on uncharged and acquitted conduct was
appropriate. United States v. Watts, 519 U.S. 148, 157 (1997); see also, e.g., United
States v. Grier, 475 F.3d 556, 567–68 (3d Cir. 2007) (en banc) (“Facts relevant to
18 application of the Guidelines — whether or not they constitute a ‘separate offense’. . . do
not implicate the rights to a jury trial and proof beyond a reasonable doubt.”).
Lynch next argues that the tax loss should actually have been zero, given that he
always intended to pay the taxes, or alternatively should have been reduced by the
amount of his late payments. As we already explained, § 7202 is violated when the taxes
are willfully not paid as of the time that the filing is due. The Guidelines, for their part,
are clear that for willful failure-to-pay offenses, “the tax loss is the amount of tax that the
taxpayer owed and did not pay” and furthermore that “[t]he tax loss is not reduced by any
payment of the tax subsequent to the commission of the offense.” § 2T1.1(c)(3) & (c)(5).
Accordingly, the tax loss is properly calculated based on whatever Lynch owed and
willfully did not pay when the applicable filings were due, at which point the offense had
been committed. Subsequent payments cannot retroactively reduce that tax loss.
Lynch’s final sentencing-related challenge appears to be that the District Court’s
imposition of a 48 month sentence of imprisonment was substantively unreasonable
because, in light of Lynch’s background, the suspension of Lynch’s law license as a
result of his conviction was punishment enough. We review a sentence’s substantive
reasonableness for abuse of discretion and “must ‘give due deference to the district
court’s determination that the § 3553(a) factors, on a whole,’ justify the sentence.”
United States v. Tomko, 562 F.3d 558, 568 (3d Cir. 2009) (en banc) (quoting Gall v.
United States, 552 U.S. 38, 51 (2007)). The District Court’s sentence was within the
Guidelines range of 41 to 51 month of imprisonment and was supported by explicit
reference to Lynch’s privileged background and the § 3553(a) factors. See Rita v. United
19 States, 551 U.S. 338, 347 (2007) (holding that within-Guidelines sentences may be
afforded a “presumption of reasonableness”). Lynch has not cited any law in support of
his position that the loss of a professional license is a sufficient substitute for
incarceration. The District Court’s sentence was reasonable.6
VII.
For the foregoing reasons, we will affirm the judgment of the District Court.
6 We have considered Lynch’s remaining claims and find they are without merit and require no further discussion. 20