                          UNPUBLISHED

UNITED STATES COURT OF APPEALS
                FOR THE FOURTH CIRCUIT


UNITED STATES OF AMERICA,              
                 Plaintiff-Appellee,
                 v.                               No. 02-4048
HARRY L. DANTZLER,
             Defendant-Appellant.
                                       
UNITED STATES OF AMERICA,              
                 Plaintiff-Appellee,
                 v.                               No. 02-4053
JAMES W. JOHNSON, a/k/a Pappa,
              Defendant-Appellant.
                                       
          Appeals from the United States District Court
         for the District of South Carolina, at Charleston.
                 David C. Norton, District Judge.
                            (CR-01-331)

                      Submitted: August 20, 2002
                      Decided: September 4, 2002

  Before WILKINS, MICHAEL, and GREGORY, Circuit Judges.


Affirmed by unpublished per curiam opinion.


                             COUNSEL

William T. Toal, JOHNSON, TOAL & BATTISTE, P.A., Columbia,
South Carolina; Brian G. O’Keefe, MARTIN LAW FIRM, Charles-
2                    UNITED STATES v. DANTZLER
ton, South Carolina, for Appellants. J. Strom Thurmond, Jr., United
States Attorney, John M. Barton, Assistant United States Attorney,
Columbia, South Carolina, for Appellee.



Unpublished opinions are not binding precedent in this circuit. See
Local Rule 36(c).


                             OPINION

PER CURIAM:

   Harry L. Dantzler and James W. Johnson were indicted in an
eighteen-count indictment charging them with conspiracy to defraud
the government with respect to false and fraudulent claims, in viola-
tion of 18 U.S.C. § 286 (2000), and submitting false claims to the
United States Department of Treasury, in violation of 18 U.S.C. §
287 (2000). Both Appellants were convicted on all counts and sen-
tenced to 51 months imprisonment (Johnson) and 46 months impris-
onment (Dantzler), followed by three years of supervised release.

   Viewed in the light most favorable to the Government, United
States v. Burgos, 94 F.3d 849, 862 (4th Cir. 1996), the evidence
adduced at trial established the following. During 1998 and 1999,
Johnson, then the Sheriff of Orangeburg County, South Carolina, and
Dantzler, a paid income tax preparer, submitted a number of tax
returns on IRS Form 1041, annual return for or on behalf of a trust
or estate. The returns were filed in the names of non-existent trusts
on behalf of individual taxpayers. The income of the "trust" was cal-
culated as the total lifetime earnings of the particular taxpayer, and
from that figure was subtracted a "fiduciary fee" in the same amount
as the reported income, resulting in a reported income of zero. The
amount of taxes purportedly paid by the "trust" was the amount esti-
mated to be paid by the taxpayer over his or her lifetime—resulting
in a claimed refund in that same amount.

   At trial, the Government presented evidence that Dantzler had been
investigated in the past for similar conduct. In particular, Government
                      UNITED STATES v. DANTZLER                         3
witnesses testified—over Dantzler’s objection—that Dantzler was
indicted and arrested in early 1999 for conspiracy and aiding and
assisting others in the filing of false tax returns. Dantzler contends
that the district court erred by allowing the government to introduce
this evidence.

   This court reviews a district court’s determination of the admissi-
bility of evidence under Fed. R. Evid. 404(b) for abuse of discretion.
United States v. Queen, 132 F.3d 991, 995 (4th Cir. 1997). A district
court will not be found to have abused its discretion unless its deci-
sion to admit evidence under Rule 404(b) was arbitrary or irrational.
United States v. Haney, 914 F.2d 602, 607 (4th Cir. 1990).

   Rule 404(b) permits evidence of other crimes, wrongs, or acts to
be introduced to prove motive, opportunity, intent, preparation, plan,
knowledge, identity, or absence of mistake. Fed. R. Evid. 404(b). This
court has treated Rule 404(b) as an inclusionary rule, excluding only
evidence that has no purpose other than to prove criminal disposition.
United States v. Sanchez, 118 F.3d 192, 195 (4th Cir. 1997). Evidence
is admissible under Rule 404(b) if it is: (1) relevant to an issue other
than character, (2) necessary, and (3) reliable. Id.

   We find that the district court’s decision to allow the evidence of
Dantzler’s previous indictment and arrest was not arbitrary or irratio-
nal. Such evidence was both relevant and probative of Dantzler’s
intent; i.e., that he knew the claims he filed were false. See United
States v. Ford, 88 F.3d 1350, 1362 (4th Cir. 1996) (upholding admis-
sion of previous arrest as relevant to defendant’s intent). The evidence
was also necessary to prove that Dantzler was on notice of the illegal-
ity of his conduct, yet continued to file false returns. Moreover, the
district court properly instructed the jury on the limited use of the evi-
dence.

   Next, the Appellants claim that the district court erred in giving a
"willful blindness" instruction. A willful blindness instruction allows
a jury to infer the element of knowledge if the evidence indicates that
the defendant "purposely closed his eyes to avoid knowing what was
taking place around him." United States v. Schnabel, 939 F.2d 197,
203 (4th Cir. 1991). In a tax case, a willful blindness instruction is
warranted if the record supports a finding that the defendant was
4                     UNITED STATES v. DANTZLER
aware of a high probability that his understanding of the tax laws was
erroneous and consciously avoided obtaining actual knowledge of his
obligations. United States v. Fingado, 934 F.2d 1163, 1166 (10th Cir.
1991); see also United States v. Whittington, 26 F.3d 456, 463 (4th
Cir. 1994) (holding that "[t]he record need not contain direct evidence
. . . that the defendant deliberately avoided knowledge of wrongdoing;
all that is necessary is evidence from which the jury could infer delib-
erate avoidance of knowledge"). We find that there was sufficient evi-
dence to support a willful blindness instruction.

   For the foregoing reasons, we affirm Johnson’s and Dantzler’s con-
victions. We dispense with oral argument because the facts and legal
contentions are adequately presented in the materials before the court
and argument would not aid the decisional process.

                                                           AFFIRMED
