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United States v. Takesian

United States Court of Appeals, First Circuit

December 18, 2019

UNITED STATES OF AMERICA, Appellee,
v.
GREG TAKESIAN, Defendant, Appellant.

          APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MASSACHUSETTS Hon. William G. Young, U.S. District Judge

          Tina Schneider for appellant.

          Randall E. Kromm, Assistant United States Attorney, with whom Andrew E. Lelling, United States Attorney, was on brief, for appellee.

          Before Howard, Chief Judge, Thompson and Barron, Circuit Judges.

          THOMPSON, Circuit Judge.

         Greg Takesian is a certified-public-accountant-turned-tax-cheat. Or so a jury essentially concluded in convicting him of four counts of filing false tax returns, see 26 U.S.C. § 7206(1), and one count of attempting to obstruct the internal-revenue laws, see 26 U.S.C. § 7212(a). A district judge at sentencing hit him with concurrent prison terms of 24 months on each count, 12 months of supervised release following the end of his incarceration, a special assessment of $100 on each count, a $10, 000 fine, and restitution totaling $286, 433. None too happy with these results, Takesian argues here that the judge thrice erred: first, by letting prosecutors impeach him with his 2006 conviction for making a false statement; second, by failing to tell the jury that to convict on the obstruction count, prosecutors had to prove that he obstructed a particular tax-related proceeding that he knew about or could reasonably foresee; and third, by ordering restitution beyond what the jury found the government's tax loss to be. Disagreeing with him, we affirm.

         BACKGROUND

         Below is a barebones summary of the relevant facts, presented in as balanced a manner as possible. See, e.g., United States v. Rodríguez-Soler, 773 F.3d 289, 290 (1st Cir. 2014).

         Government's Case

         The government's witnesses (primarily law-enforcement agents), plus the documentary evidence, provided the following narrative:

         Together with his father, Michael (we use his first name not out of disrespect, but to avoid confusing references to persons with the same last name), Takesian formed a company in 2002 called Takesian & Company (from now on, "T & C") - an S corporation for federal-tax purposes. For an S corporation, profits and losses flow through to the shareholders and must be reported on their personal tax returns. The annual amount of profit or loss to a given shareholder is reflected in a form known as a "Form K-1," which the S corporation files with the Internal Revenue Service (familiarly known as the "IRS") and the shareholders use to prepare their personal returns. Initially, Takesian held a 25% ownership share and Michael held a 75% share. But from 2007 through 2015 (when T & C dissolved), Michael was the sole owner. Takesian, though, served as T & C's president and treasurer, handling T & C's day-to-day operations.

         In its early years, T & C did tax work for a number of clients. But that changed in 2007, when the father-son duo started working almost full time for Michael Galatis, doing bookkeeping and accounting jobs for Galatis and At Home VNA (Galatis's visiting-nurse company). From 2008 to 2011, Galatis and At Home VNA paid T & C about $2 million, which ended up being deposited in T & C's bank accounts. Takesian had access to T & C's accounts during that same period, however. And he put close to $1 million of this money to his own use, through checks, cash withdrawals, and credit-card payments. A few examples: he used the money to pay for his rent and to underwrite an investment in a food truck, as well as to support his wife (from whom he was separated) and a woman he was romantically involved with (she was studying to be a massage therapist).

         Takesian did not timely file his personal tax returns for tax years 2008-2010. From July 2011 through early 2012, however, he filed personal tax returns for tax years 2008-2011 for himself and his wife. He signed each return, attesting - under penalty of perjury - that they were "true, correct, and complete." None of the returns reflected the money from T & C that he had put to his personal use. For instance, the 2008 return did not report any income from T & C - it showed only $12, 766 in wages from Cerebral Palsy of Massachusetts and about $10, 000 in gross receipts for a consulting business called "Greg C. Takesian, CPA." Yet during that year, he took $159, 044.99 from T & C's accounts for personal purposes.

         As part of a healthcare-fraud investigation of At Home VNA (which received Medicaid and Medicare funds), federal agents executed a search warrant at At Home VNA's offices in December 2011. During the search, the agents ran into Takesian, who was working in an office in the same suite. And he voluntarily said that he did accounting work for At Home VNA and Galatis. He also voluntarily gave the agents 26 boxes of warrant-related documents.

         Sometime in 2012, the IRS began investigating T & C and Takesian. But the healthcare-fraud investigation continued too. And in April 2013, as part of the healthcare-fraud probe, a federal grand jury subpoenaed T & C's documents memorializing T & C's income, expenses, and debts for 2006 through 2011, including copies of corporate tax returns and loans receivable (loans receivable is an account in a lender's general ledger showing the current balance of all loans owed to it).[1] About a month later, in May 2013, Takesian personally delivered documents to the U.S. Attorney's Office in Boston, Massachusetts. He tried to talk with the prosecutor on the case. But the prosecutor said that he would only speak to Takesian with Takesian's attorney present. Takesian then said that he had brought "everything . . . related" to At Home VNA and Galatis. He also said that he had brought copies of T & C's tax returns for tax years 2008-2011 - returns (the government later learned) that he had printed out a day earlier but had never filed.

         In August 2013, Lauren Youngquist - an agent with the IRS's criminal investigation division involved with the At-Home-VNA case - interviewed Takesian. She said that she was not investigating him, however. Actually, she never told him that he was under investigation at all. But she did ask him about his and T & C's tax returns.

         Fast forward a bit to March 2014. Agents interviewed Michael about T & C's tax filings and operations, as well as Takesian's role at T & C. Michael confirmed that Takesian had given him "K-1 information" to prepare his (Michael's) tax returns. Agents told Michael that Takesian had not yet filed T & C's tax returns, which surprised Michael because Takesian had given him info from the K-1 forms associated with those returns and Michael had relied on the info for his own taxes. Agents also gave Michael a subpoena directing him to appear and testify before a federal grand jury in April 2014.

         A few months after this interview, in July or August 2014, Takesian filed T & C's corporate returns for tax years 2008-2011. Among the differences between those returns and the unfiled returns he had previously given the government, two stand out: (1) the filed returns reflected tens of thousands of dollars of unspecified "loans" to an unidentified T & C "officer," unsupported by any documents in the T & C files that he had provided earlier (identifying these amounts as loans meant they did not need to be counted as income by the loan's recipient); and (2) the filed returns included K-1 forms that did not match the unfiled ones.

         Also around this time, Takesian filed amended personal returns for tax years 2008-2011. These returns identified additional income and new deductions. But despite the additional income, the amounts reported there did not account for all of the T & C money that he took for his personal use. And some of the new deductions seemed off. To take just one example, in some of the amended returns he claimed over $100, 000 in losses through theft or fraud, but court records from a civil suit involving him indicated that he had earlier pegged the loss at $43, 000.

         Of course, Takesian tested the prosecutors' case through his lawyer's cross-examination of their witnesses. For instance, on cross-examination, defense counsel elicited testimony from IRS agent Youngquist that while she recalled asking Takesian questions in August 2013 about T & C's "tax returns and his personal tax returns," she could not "remember if [she] had the actual tax returns in front of [her]" - and she agreed that if she did not have his returns right then and there, she "most likely" would not "have . . . asked him questions" about his returns.

         Based on the evidence it had amassed, and focusing on tax years 2008-2011, the prosecution contended that Takesian's failure to accurately disclose his income from T & C and to correctly calculate his deductions resulted in an estimated tax underpayment of $286, 433.

         Defense's Case

         Looking to counter the government's narrative, Michael and Takesian essentially testified as follows:

         Michael said that he let Takesian "borrow" money from T & C to "invest." "I didn't care what he did with it," Michael added, "except that [Takesian] knew he had to pay the money back."

         And because of their father-son relationship, they did not do "anything formal as far as signing notes, and so forth," but instead relied on a "gentlemen's agreement"[2] - though Michael admitted that he did not tell the grand jury about the loans. Turning to the T & C credit cards, Michael said that he let Takesian use them, with no strings attached.

         Taking the stand in his own defense, Takesian said that Michael had told him that he could use T & C's funds and credit cards as he "saw fit," as long as he did not deduct personal expenses on T & C's returns. He also said that he did not report the money his father had loaned him because loan proceeds do not qualify as income to the borrower. He said as well that he did not report various personal payments he had made (to his wife and girlfriend, for the food truck, etc.) because he had used the loan proceeds to make them - and loan proceeds, he repeated, are "non-taxable." Plus he said that he had drafted T & C's final returns and his amended returns the way he did because he had changed how T & C's returns would be structured, moving certain income and losses from T & C to himself and Michael - which he did after talking with Michael. And he said that the government "never told" him that the IRS had targeted him for investigation and that he never received a subpoena requiring him to produce his tax returns.

         The government's cross-examination of Takesian established several points. For example, when asked if "Youngquist asked . . . you questions about [T & C] and your tax returns?" he responded, "Yes, brief questions about [T & C] and my tax returns" - though he then said that she "had no tax returns" and "didn't ask me anything about that." He did admit that T & C's unfiled returns did not mention the loan reflected in the later return - though he claimed that the loan came not from T & C but from Michael and was included in the filed T & C return for record-keeping purposes. He also said that about a month after agents interviewed Michael in March 2014, a prosecutor "threatened" to "get" him and his father. "So with all this going on," the government asked, "is it your testimony that you had no idea that you are somehow [the] subject of a federal investigation at this time?" - to which Takesian indicated that he knew he and T & C were under investigation too, though he believed (based on the questions asked of him) that the investigation centered on whether he and Michael "were overpaid or . . . laundering money . . . for Galatis"; "it was never about [his] tax returns," he added.

         Parties' Summations and Judge's Instructions

         In its closing argument, the government (among other things) criticized Takesian's theory of the case. "Takesian," the government argued,

a CPA . . . for 25 years, . . . submitted fraudulent and false income tax returns to the IRS, concealing close to a million dollars in income . . . from the IRS. . . . When he got caught and the IRS . . . started asking questions, . . . he doubled down on those lies, and instead of trying to make things right and filing corrected amended returns, he created fictitious loans that came out of nowhere[;] he created fraudulent deductions that tenfold increased the amount of money to account for all the spending he had been doing for the years.

         Insisting that Takesian used T & C's "bank account . . . like his own personal piggy bank" and that he knew "how much money . . . he ha[d] spent," the government argued that he also knew that he was "under investigation," pointing to the "subpoenas"; "the draft filings he delivered to the U.S. Attorney's Office"; and "the amended filings he made," which "included the fraudulent and fictitious loans and the fraudulent and inaccurate deductions that are out of whack with reality."

         In his closing, defense counsel argued (among other points) that Michael had "loaned" Takesian about $1 million. On the obstruction issue, counsel argued that prosecutors had not proved "the exact and precise date that . . . Takesian was actually placed on notice that his personal tax returns . . . were being investigated[.]" "[T]hey've alluded to a date," counsel said, and

there may be evidence of what that date may or could have been, but where is the individual that took the stand and said 'I' . . . in fact told . . . Takesian, on a certain date at a certain place at a certain time, that his personal tax returns were being investigated?

         Suggesting an answer to his own question, counsel said "there was no witness," adding as well that the prosecution had "the burden . . . to establish that."

         The government's rebuttal closing asked the jury (as relevant here) to reject "the idea that [Takesian] had no idea that he was under investigation" and to find that he acted as he did because "he got caught" and "was trying to trick the IRS." "[F]or you to believe that there was a loan in this case," the government argued, "a loan that wiped out hundreds of thousands of dollars in income, you have to believe . . . Greg Takesian," a person convicted "in 2006 . . . of a felony offense of making a false statement, . . . and you can consider that evidence in evaluating his credibility."

         The judge instructed the jury (in pertinent part) that the government had to prove that Takesian "willfully" filed "false" federal tax returns - which means "he did it voluntarily, he intended the violation of a known legal duty." The judge explained that "the law does permit you to make a good faith amendment" to the returns. But, the judge said,

[t]he government claims they were not. [It] claim[s] that this business about a loan from the father, Michael, to the son, Greg, that's all after the fact, that's all made up . . . once . . . Greg Takesian came to understand that the Internal Revenue people were investigating him and the propriety of his returns.

         Focusing on the obstruction charge, the judge instructed that the government had to prove

[t]hat . . . Takesian . . . did something in an effort to obstruct or impede the due administration of the Internal Revenue laws in the manner charged, and the manner charged is this business about a loan - not just the filing of ...

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