United States v. Theagene

565 F.3d 911, 103 A.F.T.R.2d (RIA) 1772, 2009 U.S. App. LEXIS 7869, 2009 WL 998976
CourtCourt of Appeals for the Fifth Circuit
DecidedApril 15, 2009
Docket08-50160
StatusPublished
Cited by35 cases

This text of 565 F.3d 911 (United States v. Theagene) is published on Counsel Stack Legal Research, covering Court of Appeals for the Fifth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
United States v. Theagene, 565 F.3d 911, 103 A.F.T.R.2d (RIA) 1772, 2009 U.S. App. LEXIS 7869, 2009 WL 998976 (5th Cir. 2009).

Opinion

JENNIFER W. ELROD, Circuit Judge:

A jury convicted Dr. Samuel Theagene of one count of bribing a public official, 18 U.S.C. § 201(b)(1)(C), for making cash payments to an Internal Revenue Service revenue officer. The district court — calling the question “a close one” — denied Theagene’s request for an entrapment instruction. Theagene now appeals the conviction, challenging the jury charge on this and other grounds. He also appeals his sentence. We hold that the evidence mer *914 ited an entrapment instruction, and accordingly vacate the conviction and remand for a new trial.

I. FACTS AND PROCEEDINGS 1

From at least 2008 onward, Defendant Appellant Theagene was delinquent in business and personal taxes. In 2004, IRS Revenue Officer Rick Geiger worked with Theagene to arrange an installment plan for back taxes of his business, a medical practice in San Antonio called the Pain & Neuromuscular Clinic of Texas, P.A. 2 Theagene made only one payment, however, and failed to pay newly accruing taxes. In 2006, the IRS sent Theagene demand letters for missing periodic reports, and for immediate payment of over $150,000 in business taxes, penalties, and interest. The letters instructed Theagene to call Geiger if he could not pay the amounts due.

After years of neglect, Theagene took action. He left a message for Geiger, and paid $14,863 toward the back taxes. He requested in writing that Geiger “abate ... interest or penalties” because his clinic was experiencing “undue hardship.” He wrote again, ascribed his business’s delinquent taxes to “unfortunate- oversight due to poor management,” and stated that he had hired a payroll management company to rectify the problems. He enclosed two past-due returns and paid an additional $5,359.49, and again requested abatement of penalties and interest.

The IRS determined Theagene’s response was inadequate. It denied abatement, and in September, 2006, Geiger began levying the Clinic’s bank accounts and accounts receivable.

On October 3, 2006, in response to the levies, Theagene sent the IRS an unusual package. It was a manila envelope containing a letter and two smaller envelopes. Both the manilla envelope and the letter were addressed to the IRS and specifically to Geiger. One of the smaller envelopes contained two checks, one voided ánd the other made out to the U.S. Treasury for $2000. Theagene’s letter requested that the IRS lift the tax levies and place him on a new installment plan. It identified the $2,000 check as “representing the first installment,” and the voided check as a source of bank account information for future automatic withdrawals. It also requested abatement of interest and penalties. The letter did not acknowledge or explain the second small envelope. That envelope was addressed to “Internal Revenue Service Mr. Rick Geiger.” It contained $500 cash with a sticky note on which Theagene had written, simply, “a token.” It is extraordinarily unusual for a taxpayer to send cash to the IRS.

The Treasury Department decided to investigate Theagene. Initially an IRS collections agent, Henry Amezquita, called about the $500. Theagene told Amezquita to apply the $500 to his tax account, and claimed he had not attached a sticky note to the cash. Amezquita had some doubts whether the cash was meant to be a bribe, but lead Treasury Department Criminal Investigator Victor Guevara considered it “an obvious bribe.” Guevara determined to investigate further, with Geiger’s assistance.

On October 5, 2006, Geiger telephoned Theagene. Geiger testified at trial that from his perspective, the purpose of the call was to determine whether Theagene meant to bribe him. Guevara recorded the conversation, and the prosecution played *915 the recording for the jury. In the call, Theagene thanked Geiger for “calling back,” and Geiger stated he “got [Theagene’s] messages” but had been out of the office. Theagene offered excuses for his delinquency, expressed willingness to pay back taxes, and asked again about abating interest and penalties. Geiger informed Theagene of three possible ways to escape interest and penalties.

The conversation then proceeded as follows:

Geiger: [¶]... ] Also, I’ll send you the phone number and the, um, the, for the Taxpayer Advocates office.
Theagene: Okay.
Geiger: But what did you have in mind on how to — have me help you here?
Theagene: Well, that’s the ... I guess, actually all I want is for the, uh, if the interest and penalties could go away we’d probably just keep paying the stuff and then get it behind us. “Cause what I did is, I made sure that, uh, we brought in a company that’s gonna take care of Payroll at once.” 3

Theagene then stated that he had fixed the problems leading to his delinquency, and that his medical practice was profitable enough to pay his back taxes, but that “with levies in place we cannot function to pay debts at all, be it IRS or anybody else’s debts.” He argued again for lifting the levies and allowing him to pay installments:

Theagene: So, if that can be put in place, then, um, I don’t see ... I don’t know if it’s gonna be automatic ... I don’t see how we can default on this.
Geiger: Well, I really wanna help you here.
Theagene: Okay.
Geiger: Okay, but, you know, we have our procedures here that I have to follow.
Theagene: Okay.
Geiger: You know, and so, um, the fact that the installment agreement did default, um, ... but tell me what to do.
Theagene: Well, um, can you release all levies?
Geiger: Well yeah,. I can release ‘em, yeah.
Theagene: Okay. And, um, that done then, um, we’re going to start making payments.
Geiger: I mean, you mean like to reinstate the installment agreement?
Theagene: Uh, yes sir.
Geiger: [sic] On there. Okay. Well, like I’m still reviewing the file here and then, like I said, we’ve got the check for the two thousand. And let me ask you again, I may have asked you this already. Do you think it’s gonna clear?
Theagene: [Y]es — ... [Theagene explains that he postdated the check for October 15, and the funds would be available on that date. He proposes automatic withdrawals on the 15th of every month thereafter].
Geiger: Okay, well, let me ask you this. Did the ... I’m kinda still going through the file and, yeah, the, uh, I’m trying to get caught up with everything here. We got the check. Now there was ... there was also cash sent. Okay?
Theagene: Right.
Geiger: Som’em like $500.

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Bluebook (online)
565 F.3d 911, 103 A.F.T.R.2d (RIA) 1772, 2009 U.S. App. LEXIS 7869, 2009 WL 998976, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-states-v-theagene-ca5-2009.