from the United States District Court for the Northern
District of Georgia D.C. Docket Nos. 1:14-cr-00123-TCB-RGV-1;
TJOFLAT, HULL and O'MALLEY [*] Circuit Judges.
MALLEY, CIRCUIT JUDGE.
case concerns Kenneth and Kimberly Horner's indictment,
trial, and conviction for: (1) assisting in the preparation
of a fraudulent corporate tax return, in violation of 26
U.S.C. § 7206(2) (two counts each, tax years 2007 and
2008); and (2) filing a false individual income tax return,
in violation of 26 U.S.C. § 7206(1) (also two counts
each, tax years 2007 and 2008). The Horners appeal their
convictions on several grounds. After review of the record
and with the benefit of oral argument, we affirm.
relevant times, the Horners owned and operated Topcat Towing
and Recovery, Inc. ("Topcat"), an
S-corporation in Lithonia,
Georgia. The Horners were Topcat's only owners, with Mrs.
Horner owning 51% of the company and Mr. Horner owning the
required customers to pay in cash for a number of its
services, including vehicle retrieval from impound and
abandoned car auctions. From 2005 to 2008, the Horners
deposited approximately $3 million in checks and $2.8 million
in cash into several business accounts with Bank of America
and Bank of
Georgia. In that same time period, the Horners deposited
nearly $1.6 million in cash into their personal accounts. For
2007 and 2008 in particular, those cash deposits totaled
$380, 883 and $522, 026, respectively.
Horners hired H&R Block to prepare both their personal
tax returns and Topcat's corporate tax returns. They did
not, however, tell H&R Block about any of the
aforementioned cash deposits into their personal accounts. On
their finalized tax returns for 2005 through 2008, the
Horners did not report any of the personal cash deposits as
Revenue Service ("IRS") investigators concluded
that these personal cash deposits-not readily explainable as
loans, gifts, or inheritance- were actually diverted Topcat
receipts. If true, the Horners not only underreported
Topcat's income, but also their own income, as any Topcat
receipts would eventually have passed through to the Horners
as owners. The Horners were indicted by a grand jury for
assisting in the preparation of a fraudulent corporate tax
return and for filing a false individual income tax return
(two charges each, for tax years 2007 and 2008). No charges
were brought for 2005 or 2006.
Trial, Verdict, and Sentencing
jury trial, the Horners were found guilty on all counts and
sentenced to 18 months imprisonment, three years of
supervised release, as well as $144, 455 in restitution
payment to the IRS. Of particular relevance to this appeal,
over the course of trial: (1) the Horners unsuccessfully
filed multiple motions in limine to exclude certain evidence;
(2) the government elicited testimony from IRS Agent Rosalyn
Owens on the Horners' tax due; and (3) the Horners
unsuccessfully requested supplemental jury instructions.
the Horners filed motions in limine to exclude evidence that
they "structured" their cash deposits to avoid
triggering bank reporting requirements, as well as evidence
that they filed false tax returns for 2005 and 2006. The
court denied those motions. Regarding structuring, the United
States Department of the Treasury requires banks to file a
Currency Transaction Report ("CTR") for any cash
transaction larger than $10, 000. The government uses these
CTRs to help maintain the transparency of the transaction and
also the integrity of the banking system. Structuring cash
deposits "for the purpose of evading the reporting
requirements"-for example, making three $9, 000 deposits
over time instead of a single $27, 000 deposit-is a federal
crime. 31 U.S.C. § 5324(a).
to the government, the deposits into the Horners' and
Topcat's bank accounts showed signs of structuring. For
example, on April 12, 2006, the Horners made two deposits
totaling more than $10, 000-one for $9, 800 into a personal
bank account and one for $3, 250 into a business account.
From 2005 to 2008, the Horners did not make a single cash
deposit of over $10, 000. Instead, the Horners made 177 cash
deposits between $9, 000 and $9, 900. The Horners
unsuccessfully moved to exclude this evidence of
structuring-an uncharged, separate crime-as irrelevant and
the Horners argued that any evidence of their potentially
false returns in tax years 2005 and 2006-also an uncharged
and separate crime-would be inadmissible. The district court
again disagreed, and denied the motion.
the government elicited certain testimony from IRS Agent
Owens, examining the Horners' tax status. Specifically,
in preparation for trial, Owens conducted an audit and
created a tax computation chart showing the additional tax
due from the Horners based on the unreported cash deposited
into the Horners' personal bank accounts. For 2007, the
Horners reported a tax liability of zero, but Owens
calculated their corrected tax liability as $116, 535. For
2008, the Horners reported a tax liability of $8, 614, but
Owens calculated their corrected tax liability as $166, 476.
Owens concluded that, for 2005 through 2008, the Horners owed
$474, 147 in additional taxes from their unreported income.
calculation, however, did not account for any business
expenses the Horners may have paid from their personal
accounts but did not claim as a deduction. During her trial
testimony, Owens conceded that any such unclaimed deductions
would reduce the Horners' unreported income (and,
therefore the tax due) but insisted that the unclaimed
deductions would not "have a really big impact, "
would "not significantly" change her calculation,
and would still leave "a substantial
understatement." Notably, the Horners did not object to
Owens's testimony. Despite Owens's calculations at
trial, when calculating the amount of tax due during
sentencing, the district court ultimately accepted a figure
of $573, 619 in unclaimed business expense deductions for
2007 and 2008, which reduced the unreported income in that
period by approximately one-third.
the Horners requested supplemental jury instructions
regarding good-faith reliance on the advice of an accountant
and the due diligence obligations of tax preparers generally.
The district court instead gave a modified version of the
Eleventh Circuit pattern instructions on good faith reliance
on the advice of an attorney and did not instruct the jury as
to the due diligence obligations of tax preparers.
jury ultimately convicted the Horners on all four counts,
and, after sentencing, the Horners timely filed a notice of
appeal with this Court. On appeal, Mr. and Mrs. Horner each
separately raise the same four issues: (1) the government
elicited and failed to correct false testimony from Agent
Owens regarding the extent of unclaimed deductions; (2) the
district court should have given the requested jury
instructions on good faith reliance on accountants'
advice and due diligence; (3) the district court should have
excluded the testimony on deposit "structuring" as
irrelevant and unduly prejudicial; and (4) the district court
should have excluded evidence of allegedly fraudulent tax
returns from 2005 and 2006 as irrelevant, unduly cumulative,
confusing, and prejudicial. We address each issue in turn.
Horners contend that the government presented false testimony
from Owens about the accuracy of her calculations
vis-à-vis unclaimed deductions and that the government
failed to correct that testimony, in violation of Giglio
v. United States, 405 U.S. 150 (1972).
we review such a claim of prosecutorial misconduct de
novo. United States v. McNair, 605 F.3d 1152,
1208 n.79 (11th Cir. 2010). But when, as here, the defendants
do not object at trial or otherwise raise the issue before
the district court, such as through a motion for mistrial or
for new trial, we review only for plain error. United
States v. Nixon, 918 F.2d 895, 905 (11th Cir. 1990).
establish prosecutorial misconduct under Giglio, the
Horners "must show the prosecutor knowingly used
perjured testimony, or failed to correct what he subsequently
learned was false testimony, and that the falsehood was
material." McNair, 605 F.3d at 1208. Perjured
testimony "must be given with the willful intent to
provide false testimony and not as a result of a mistake,
confusion, or faulty memory." United States v.
Singh, 291 F.3d 756, 763 (11th Cir. 2002). The
defendants are "entitled to a new trial if there is any
reasonable likelihood that the false testimony could
have affected the judgment of the jury." Guzman
v. Sec'y, Dep't of Corr., 663 F.3d 1336, 1348
(11th Cir. 2011) (internal quotation marks omitted) (emphasis
added). The "could have" standard "requires a
new trial unless the prosecution persuades the court that the
false testimony was harmless beyond a reasonable doubt."
Id. (internal quotation marks omitted).
we find no Giglio violation. The Horners have failed
at the outset to show that Owens's testimony was false,
let alone willfully false. The Horners rely in particular on
statements from the following exchange between Owens and
Q. If the checks that we have talked about were in fact
business expenses that were not deducted from the tax returns
filed by the Horners, that would change the tax calculation
that you have done; correct?
A. Yes, but not significantly, ma'am.
Q. Now, in your calculation you assumed that no business
expenses were paid from the personal account; correct?
Q. So that means that your computation is wrong if business
expenses were paid by the Horners from their personal bank
A. The unreported income would be reduced.
Q. But still your chart would be unreliable; correct?
A. It would be correctable.
Q. It could be correctable, but you'd have to go back and