United States District Court, E.D. Pennsylvania
CYNTHIA M. RUFE, District Judge.
On December 8, 2014, following a jury trial, Defendant Sherelle Pratt was convicted of seven counts of the indictment: Counts Two and Three, filing a false tax return in violation of 26 U.S.C. § 7206(1); Counts Four through Seven, aiding and assisting in the preparation and filing of false tax returns in violation of 26 U.S.C. § 7206(2); and Count Eight, theft of government property in violation of 18 U.S.C. § 641. The jury acquitted Defendant on two counts of the Indictment: Count One, filing a false tax return in violation of 26 U.S.C. § 7206(1); and Count Nine, aggravated identity theft in violation of 18 U.S.C. § 1028A. Defendant now moves for a judgment of acquittal pursuant to Federal Rule of Criminal Procedure 29 on Count Eight, and for a new trial pursuant to Rule 33 on Counts Two through Seven.
Defendant Sherelle Pratt prepared tax returns for her friends and neighbors from 2007 through 2009, and continued to do so after becoming an IRS contact representative in 2008. On February 11, 2014, a grand jury in this District returned a nine-count indictment against the Defendant. Counts One through Three charged that Defendant had filed materially false tax returns in her own name in violation of 26 U.S.C. § 7206(1) because she failed to include money that she stole from those for whom she prepared tax returns as adjusted gross income. Count One charged that on or about February 18, 2008, Defendant filed a materially false return for tax year 2007 because she failed to report the money that she stole from the refunds of those for whom she prepared returns for tax year 2007. Count Two charged that on or about February 2, 2009, Defendant filed a materially false return for tax year 2008 because she failed to report the money that she stole from the tax refund and stimulus checks of those for whom she prepared returns for tax year 2007, including her neighbor Stacey Singleton and her acquaintances Stanley Trader and Brian Hamilton. Count Three charged that on or about August 17, 2011, Defendant filed a materially false return for tax year 2009 because she failed to report the money that she stole from the refunds of those for whom she prepared tax returns for tax year 2008, including her neighbor Ericka Blackwell, Ms. Blackwell's son Maurice Blackwell, Ms. Singleton, Mr. Trader, and Mr. Hamilton.
Counts Four through Seven charged that Defendant aided and abetted her neighbors and her son Marquice Pratt in the preparation and filing of materially false tax returns in violation of 26 U.S.C. § 7206(2). Count Four charged that Defendant aided and abetted Ms. Singleton in the preparation and filing of a return for tax year 2007 that claimed false child care expenses. Count Five charged that Defendant aided and abetted Ms. Singleton in the preparation and filing a return for tax year 2008 that also claimed false child care expenses. Count Six charged that Defendant aided and abetted Mr. Blackwell in the preparation and filing of a return for tax year 2008 that falsely claimed business expenses from a business that Mr. Blackwell did not own. Count Seven charged that Defendant aided and abetted her son in the preparation and filing of a tax return that falsely claimed two dependents.
Count Eight of the indictment charged that in violation of 18 U.S.C. § 641, on or about February 18, 2009, Defendant converted government property in the form of a $3, 524 refund check intended for Ms. Blackwell. Count Nine charged that Defendant engaged in aggravated identity theft during and in relation to the theft of Ms. Blackwell's refund check in violation of 18 U.S.C. §§ 1028A(a)(1) and (c)(1). The jury acquitted Defendant on Counts One and Nine, and Defendant now moves for a judgment of acquittal on Count Eight and a new trial on Counts Two through Seven.
II. MOTION FOR JUDGMENT OF ACQUITTAL ON COUNT EIGHT
Count Eight charged Defendant with theft of government property in the form of a $3, 524 tax refund intended for Ericka Blackwell. In order to prove theft of the government property in violation of 18 U.S.C. § 641, the government was required to show: "1. receipt, possession, or concealment of, 2. stolen government property, with 3. intent to convert, and 4. knowledge that it is stolen." Defendant makes two arguments: first, that acquittal on Count Nine, the charge of aggravated identity theft, was inconsistent with the conviction on Count Eight; and second, that the evidence is insufficient to support the conviction on Count Eight.
The crime of aggravated identity theft has four elements: (1) the defendant knowingly transferred, possessed or used; (2) without lawful authority; (3) a means of identification belonging to another person; and (4) the defendant knew that the means of identification that he/she knowingly transferred, possessed or used belonged to another person. Because Count Nine required the government to prove separate conduct, namely that Defendant knowingly used a means of identification belonging to Ms. Blackwell without lawful authorization, the jury's verdict of acquittal on identity theft is not inconsistent with a conviction for theft of government property. Therefore, the sole issue is whether the evidence was sufficient to support the conviction for theft of government property.
At trial, the government offered into evidence Ms. Blackwell's 2008 tax return, which requested that the $3, 524 refund be electronically deposited into Defendant's business bank account at T.D. Bank (the "Business Account"). Ms. Blackwell testified that she had not authorized Defendant to file the return, did not recognize the Business Account, and had not received any of the $3, 524 refund from Defendant. Ms. Blackwell's testimony was partially contradicted by her son Maurice Blackwell, who testified that Defendant had visited the Blackwell home and started to prepare the 2008 returns for Mr. Blackwell and his mother in their presence.
The government also pointed to circumstantial evidence indicating that the purpose of the Business Account was to facilitate the theft of tax refunds. Defendant testified that she maintained the Business Account for business purposes, and the evidence demonstrated that Defendant had deposited numerous tax refunds into the Business Account, although Defendant's tax returns gave no indication that she operated a legitimate business. The government also elicited evidence that Defendant had used the Business Account to pay personal expenses. In addition, while Defendant had numerous refunds deposited into the Business Account, there was no evidence that Defendant maintained any system to track whose money was flowing into the Business Account so that it could be returned to its rightful owner.
Defendant chose to take the witness stand and testified that Ms. Blackwell had asked her to prepare the 2008 return and had agreed to the deposit of the refund into the Business Account. Defendant also testified that she delivered the $3, 524 in cash to Ms. Blackwell and produced a withdrawal ticket from T.D. Bank for that amount in cash.
Pursuant to Rule 29, "the court must enter a judgment of acquittal of any offense for which the evidence is insufficient to sustain a conviction." In ruling on a Rule 29 motion, the court "review[s] 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 based on the available evidence." The court's review may not "usurp the role of the jury by weighing credibility and assigning weight to the evidence, or by substituting its judgment for that of the jury" and therefore the entry of a judgment of acquittal is reserved for "cases where the prosecution's failure is clear."
Whether Ms. Blackwell authorized the deposit of the tax refund into Defendant's Business Account and received the refund in cash, as Defendant testified, was a question of fact for the jury. The jury was entitled to credit Ms. Blackwell's testimony that she was unaware of the Business Account and never received any of the refund rather than Defendant's testimony if they did not find the Defendant to be a credible witness. Although Mr. Blackwell and his mother provided partially contradictory testimony as to Defendant's authorization to file the return, Mr. Blackwell did not testify that his mother authorized the deposit of the refund into the Business Account or that she received the refund in cash. The withdrawal ticket, while providing some corroboration for Defendant's testimony, does not establish that Ms. Blackwell received the money and the jury was not required to believe Defendant's testimony on this issue. Combined with the circumstantial evidence that the purpose of the Business Account was to facilitate the theft of tax returns, Ms. Blackwell's testimony was therefore sufficient for the jury to convict Defendant of conversion of government property as charged in Count Eight of the Indictment.
Defendant also makes the following claim, which is reproduced in full below:
Moreover, once the funds from Ericka Blackwell's 2008 return were lawfully deposited into Mr. Pratt's [ sic ] business account, said funds were no longer property belong[ing] to the United States:'
Where the government no longer has supervision and control over funds or the ultimate use of the funds, and no longer has any pecuniary interest in the funds, it would grossly distort the English language to call those funds money... of the United States.' In addition, the rule of lenity requires that any ambiguities in the criminal law be resolved in favor of the accused. Accordingly, we conclude that funds are money... of the United States' within the meaning of 18 U.S.C. § 641 only where the government retains a pecuniary interest in the funds, or maintains control over the funds or their ultimate use.'
See e.g. United States v. Howard, 787 F.Supp. 769, 711 (S.D. Ohio) (federal funds properly deposited into the form [ sic ] of social security benefits no longer money of the United States). See Hayle v. United States, 815 F.2d 879, 882 (2d Cir. 1987) (Federal grant money remains "money of the United States within meaning of federal embezzlement statute even after being ...