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Appeal from the United States District Court for the Middle District of Florida. D. C. Docket No. 8:13-CR-207-TGW-1.
For United States of America, Plaintiff - Appellee: Michelle Thresher Taylor, Arthur Lee Bentley III, James A. Muench, Josephine W. Thomas, U.S. Attorney's Office, Tampa, FL.
For Freddie Wilson, Defendant - Appellant: Judy K. Hunt, Law Office of Judy K. Hunt, St. Petersburg, FL; Freddie Wilson, USP Atlanta - Inmate Legal Mail, Atlanta, GA.
Before ED CARNES, Chief Judge, COX, Circuit Judge, and ROYAL,[*] District Judge.
ROYAL, District Judge:
Appellant Freddie Wilson appeals his convictions and sentence for converting to his personal use United States Treasury checks issued as a result of fraudulently filed federal income tax returns. At trial, Wilson claimed he was a legitimate check casher and did not know the Treasury checks were fraudulent. The jury, however, rejected Wilson's defense and on July 10, 2013, convicted him on all fourteen counts of his indictment: six counts of Theft of Government Funds, in violation of 18 U.S.C. § 641 (Counts 1-6); six counts of Aggravated Identity Theft, in violation of 18 U.S.C. § 1028A (Counts 7-12); one count of Conducting an Unlawful Monetary Transaction, in violation of 18 U.S.C. § 1957 (Count 13); and one count of Obstructing a Criminal Investigation, in violation of 18 U.S.C. § 1505 (Count 14). The district court sentenced Mr. Wilson to serve a total of 102 months imprisonment.
On appeal, Mr. Wilson challenges his convictions and sentence on three main grounds: (1) the evidence was insufficient to support any of his convictions; (2) the district court erred in admitting the following four key pieces of evidence: (a) the testimony of Sherman Brown -- a convicted felon and associate of Wilson; (b) tax returns and refund checks related to uncharged conduct; (c) IRS Special Agent Christian Daley's testimony that all of the tax-refund checks Mr. Wilson deposited resulted from fraudulent tax returns; and (d) certain text messages from Wilson's former attorney to an IRS agent relating to the Obstruction charge; and, finally, (3) the district court erred at sentencing in calculating the amount of the loss and/or the number of victims.
After careful review, we find Wilson's arguments unconvincing and for the following
reasons AFFIRM his convictions and sentence.
Freddie Wilson was the sole owner of Against All Odds Bail Bonds, Inc. in Tampa, Florida, and had been operating as a bail bondsman since 2001. In 2012, Mr. Wilson fatefully decided to expand into the check-cashing business.
On June 27, 2012, Wilson completed a license application to legally operate as a check casher in the State of Florida. On his application, Wilson verified that he would comply with the federal Antimoney Laundering Program and implement certain policies and procedures, including that he would verify customer information, file reports, and create and maintain records. Wilson acknowledged that Florida law required check cashers to keep copies of the fronts and backs of all checks, record all fees charged to cash the checks, maintain a daily cash reconciliation summarizing all cash received, and keep copies of valid identification and thumbprints affixed to checks greater than $1,000. Wilson also acknowledged that Florida law required check cashers to maintain a secure area for cashing checks with either bullet proof glass or security cameras.
The license application also required Wilson to identify the financial institution where he would be negotiating checks. Five days prior to completing his application, Wilson opened a checking account at Hancock Bank and informed the bank that he would be using the account for his check-cashing business. In the application, however, Wilson identified another bank as the financial institution where he would be negotiating checks. Nowhere on the license application did he identify the Hancock Bank account.
Although he did not disclose it to authorities, Wilson began vigorously using the Hancock Bank account in his check-cashing business. In a span of only three months--from June 22 through September 30, 2012--Wilson deposited more than $336,000 into the account. Ninety-nine percent of the funds deposited were from 37 United States Treasury tax-refund checks totaling about $333,000; less than ten checks were non-Treasury checks, which accounted for less than one percent of the total deposits at Hancock Bank. Wilson was the only authorized signor on the account and the only person who deposited the checks.
The evidence at trial established Wilson's Hancock Bank account activity was not consistent with a legitimate check casher. The operations manager at Hancock Bank testified that Wilson came into the bank and deposited checks or withdrew cash two to three times per week, sometimes making multiple deposits in a single day. This activity struck her as unusual because business owners would typically make deposits only once or twice a week.
Particularly striking was the fact Wilson used the money in the Hancock Bank account almost exclusively for personal expenses. The checks Wilson wrote from the account included payments for his daughter's orthodontist and day school, his utility and insurance bills, Home Depot, Wal-Mart, a 2011 Camaro, and to Wilson himself totaling $110,445, which accounted for about one-third of the total amount deposited. The debit card transactions also showed that Wilson used the account for personal expenses. The transactions included withdrawals from numerous ATMs and payments to restaurants, gas stations, hotels, airlines, liquor stores, and the Seminole Hard Rock Casino for $33,000. In a span of only three months, the amount of debit card transactions totaled $127,511.73.
Under Florida law, as a check casher, Wilson could lawfully charge no more than five percent of the total amount of the check. Thus, in an account consistent with a legitimate check-cashing business, deposits are normally accompanied by withdrawals, and the balance is often very minimal. Wilson's account, however, never had a balance below $13,000 or $14,000. Moreover, legitimate accounts typically show 80-90% of the cash being paid to check holders, not used for personal expenses. After noticing the unusual account activity, Hancock Bank's compliance department closed Wilson's account in September 2012. The account had a closing balance of $140,000, an amount strikingly uncharacteristic for a legitimate check-cashing business.
Christian Daley, a special agent with the Criminal Investigation division of the Internal Revenue Service who had worked on dozens of cases involving the filing of fraudulent tax returns requesting refunds, investigated Wilson's activities. He determined that the 37 tax returns from which the IRS issued the tax-refund checks Wilson deposited into his Hancock Bank account were fraudulent. He examined the Hancock Bank account records, the canceled refund checks that were negotiated through the account, and the original tax returns that were filed that caused the refund checks to be issued.
From this evidence, Agent Daley identified several indicators of fraud, including that the refund checks were in large dollar amounts and in whole dollar amounts, e.g., $39,000. In addition, many of the tax-refund checks Wilson deposited were for the exact same amount, and the IRS sent refund checks to neighboring addresses. For example, Wilson received a U.S. Treasury check made payable to Millie Arcadi for $9,074, dated August 31, 2012, which Wilson deposited on September 17. Wilson also received a U.S. Treasury check made out to Alfred Malay for the exact same amount, with an address next door, that Wilson deposited into his Hancock Bank account on the same day. Agent Daley requested records of Form-1099s issued from multiple banks to support the interest payments that individuals reported on their tax returns with corresponding checks that went into Wilson's Hancock Bank account. However, no such records existed. He pointed out that Wilson did not disclose the Hancock Bank account to either the State of Florida on his application for a check casher license or to FinCEN--the Financial Crimes Enforcement Network--on that application to register Against All Odds as a check casher.
The evidence at trial established that the victims identified in the charged counts did not file the IRS tax returns associated with the tax-refund checks Wilson deposited into his account. They did not earn the large amounts of interest claimed on the returns. They did not receive the tax-refund checks made payable to them. The victims never transacted any business with Wilson or Against All Odds. And they did not endorse the backs of the refund checks with their signatures. Indeed, one of the victims had been deceased four months when Wilson deposited two refund checks issued in her name and purportedly endorsed with her signature.
To establish Wilson's knowledge and intent, the government relied on the testimony of Sherman Brown, a convicted felon and associate of Wilson. Brown testified that he sold Wilson tax-refund checks, helped Wilson obtain social security numbers, observed Wilson file fraudulent tax returns, and accompanied Wilson to retrieve tax-refund checks in different neighborhoods. Brown grew up in the same neighborhood with Wilson and has been in and out of jail his entire life. In January 2011, Brown was released from prison and
was selling checks to make money. In October 2011, he reconnected with Wilson and started selling him checks. Brown sold Wilson around 50 checks and observed him go to stores, cash the checks, and come back with money. Wilson preferred checks " with the statue of liberty on them," checks for less than $10,000, and checks made payable to the recently deceased. Tr. Trans., Doc. 105, p. 114, 120.
Toward the end of 2011 and beginning of 2012, Brown accompanied Wilson to different motels offering free Wi-Fi and observed Wilson file false tax returns on the IRS website. Also in the beginning of 2012, Brown observed Wilson purchase social security numbers from " some guys" at various apartment complexes. Id. at p. 119. On four or five occasions in February of 2012, Brown rode with Wilson to retrieve checks from different addresses in neighborhoods on the outskirts of town. Brown last saw Wilson in June 2012, prior to Brown's arrest in July.
Wilson testified at trial that he had not seen Brown in 15 years, never bought a Treasury check, and never filed a false tax return. Wilson claimed that all of his customers possessed the proper identification and credentials. He claimed that he was defrauded and ...