                                                                       FILED
                                                            United States Court of Appeals
                                                                    Tenth Circuit

                                                                December 17, 2012
                                     PUBLISH                    Elisabeth A. Shumaker
                                                                    Clerk of Court
                   UNITED STATES COURT OF APPEALS

                                TENTH CIRCUIT



 UNITED STATES OF AMERICA,

       Plaintiff-Appellee,
 v.                                                      No. 11-6294
 SKOSHI THEDFORD FARR,

        Defendant-Appellant.



         APPEAL FROM THE UNITED STATES DISTRICT COURT
            FOR THE WESTERN DISTRICT OF OKLAHOMA
                    (D.C. No. 5:CR-08-0271-F-1)


Mack K. Martin, Martin Law Office, Oklahoma City, Oklahoma, for Defendant-
Appellant.

Suzanne Mitchell, Assistant United States Attorney, (Sanford C. Coats, United
States Attorney, and Susan Dickerson Cox, Assistant United States Attorney, with
her on the brief), Oklahoma City, Oklahoma, for Plaintiff-Appellee.


Before BRISCOE, Chief Judge, HOLLOWAY and HARTZ, Circuit Judges.


BRISCOE, Chief Judge.


      Defendant Skoshi Farr was convicted by a jury of violating 26 U.S.C. §

7201 for willfully failing to pay a trust fund recovery penalty that the Internal

Revenue Service assessed against her after she, as the manager of an alternative
medical clinic, failed to pay quarterly employment taxes owed by the clinic. Farr

now appeals her conviction, contending she was denied her Sixth Amendment

right to a fair trial by the district court’s rulings which permitted the admission of

Rule 404(b) evidence. She also contends the district court erred in denying her

motion for judgment of acquittal, which argued that the government’s evidence

was insufficient to support a conviction, and in denying her motion to dismiss the

indictment for failure to charge the offense under the appropriate statute. Finally,

Farr contends her prosecution in this case was barred by the Double Jeopardy

Clause as a result of the government’s prior unsuccessful prosecution. We

exercise jurisdiction pursuant to 28 U.S.C. § 1291 and affirm.

                                          I

       This is the third appeal to this court involving Farr and the government. In

the two prior appeals, we described the facts that led to federal criminal

proceedings initially being brought against Farr, as well as the events that

transpired at Farr’s initial trial:

           From 1984 through 1999, . . . Farr served as the general manager
       or administrator of her husband’s alternative medicine clinic in
       Oklahoma City, which he operated from 1978 until his death in
       December 1998. Apparently to avoid Internal Revenue Service
       (“IRS”) scrutiny and collection efforts, the clinic used several names
       and associated tax identification numbers over the years, operating
       variously as “Genesis Medical Center,” “Crossroads Unlimited
       Trust,” and “ATHA-Genesis.” Throughout its years of operation, the
       clinic filed quarterly federal tax returns (IRS Form 941) reporting
       wages paid and federal taxes withheld for employees, but failed
       conspicuously to pay those withheld quarterly employment taxes over

                                          2
to the federal government. The clinic’s ever-changing name and tax
identification number aided its efforts to avoid detection, making it
difficult for IRS revenue officers to locate assets for the collection of
the delinquent employment taxes.

   The IRS is, of course, hardly without recourse in such
circumstances. * * * In [particular], 26 U.S.C. § 6672 allows the
IRS, in effect, to pierce the corporate veil and proceed against
individual officers or employees responsible for collecting the
offending company’s quarterly employment taxes. Specifically,
Section 6672 provides that the officers or employees who, on behalf
of an employer, are responsible for collecting withholding taxes and
paying them over to the government, and who willfully fail to do so,
may be personally assessed a civil penalty equal to the amount of the
delinquent taxes. (footnote and citations omitted). This is exactly
how the IRS proceeded in this case, assessing a Section 6672 “trust
fund recovery penalty” against . . . Farr, as the person allegedly
responsible for turning over the clinic’s withheld quarterly
employment taxes to the government.

   When . . . Farr did not pay the penalty assessed against her, a
civil proceeding evolved into a criminal one. The government sought
and received an indictment in August 2006 against . . . Farr.
Specifically, the grand jury charged . . . Farr under 26 U.S.C. § 7201,
a generic tax evasion provision providing that

      [a]ny person who willfully attempts in any manner to
      evade or defeat any tax imposed by this title or the
      payment thereof shall, in addition to other penalties
      provided by law, be guilty of a felony and, upon
      conviction thereof, shall be fined not more than
      $100,000 ($500,000 in the case of a corporation), or
      imprisoned not more than 5 years, or both, together with
      the costs of prosecution.

   Significantly . . . , however, the government chose . . . not to seek
a broad indictment simply reciting the generic language of Section
7201, but instead deliberately added additional detail to its charge.
As adopted by the grand jury, the indictment alleged, in pertinent
measure,


                                    3
            [t]hat beginning on or about the 12th day of November,
            2001, and continuing until the present, in the Western
            District of Oklahoma and elsewhere, SKOSHI
            THEDFORD FARR, the defendant herein, a resident of
            Oklahoma City, Oklahoma, and Grants Pass, Oregon, did
            willfully attempt to evade and defeat the payment of the
            quarterly employment tax for ATHA-Genesis Chapter
            due and owing by her to the United States of America
            for the quarters 6-99, 9-99, and 12-99 in the amount of
            $72,076.21 by concealing and attempting to conceal
            from the Internal Revenue Service the nature and extent
            of her assets and the location thereof and placing funds
            and property in the names of nominees. All in violation
            of Title 26, United States Code, Section 7201.

United States v. Farr, 536 F.3d 1174, 1176-78 (10th Cir. 2008) (Farr I).

         At trial, the government only presented evidence that Farr was
      personally assessed and failed to pay a “trust fund recovery penalty.”
      Recognizing the indictment did not cover Farr’s failure to pay a trust
      fund recovery penalty, the district court instructed the jury, as a
      matter of law, that the “[t]rust [f]und [r]ecovery [p]enalty assessed
      against the defendant [wa]s to be treated as equivalent of the
      quarterly employment tax referred to in . . . the indictment.” The
      jury convicted Farr, who appealed her conviction.

         [In Farr I, we] concluded that the trial proceedings effected a
      constructive amendment of the indictment. We explained that while
      the indictment charged Farr with failing to pay quarterly employment
      taxes, the government’s own witnesses indicated that only the
      employer is liable for quarterly employment taxes and Farr was never
      the employer. In light of this, the government sought to proceed
      against Farr for failing to pay the trust fund recovery penalty, and the
      district court in its jury instruction “effectively allowed the jury to
      convict Ms. Farr for failing to pay either the clinic’s quarterly
      employment taxes purportedly ‘due and owing by her’ or the trust
      fund recovery penalty assessed personally against her.”

         We went on to explain that had the government simply charged
      Farr generically under § 7201 with the willful evasion of a tax it
      could have proven its case against her using either theory. Instead,

                                         4
      since it included particulars about the nature of the tax, the
      particulars of the tax became an essential and delimiting part of the
      charge itself. Consequently, we reversed and remanded the case for
      a new trial.

         Based on this court’s reversal, the district court dismissed the
      case.

United States v. Farr, 591 F.3d 1322, 1324 (10th Cir. 2010) (Farr II).

      Following the dismissal of the original indictment, the government sought

and received a new indictment charging Farr with a single count of willfully

attempting to evade and defeating the payment of a trust fund recovery penalty

due and owing by her, in violation of 26 U.S.C. § 7201. Farr moved to dismiss

this indictment on double jeopardy grounds, but the district court denied her

motion. Farr filed an interlocutory appeal with this court. We affirmed the

district court’s decision and remanded the matter to the district court for further

proceedings. Farr II, 591 F.3d at 1323, 1326.

      The case proceeded to trial on February 22, 2011. At the conclusion of the

evidence, the jury found Farr guilty as charged in the indictment. The district

court subsequently sentenced Farr to a term of imprisonment of thirty-three

months, and to pay restitution to the government in the amount of $72,076.21.

      Farr now appeals.

                                          II

A. Admission of Rule 404(b) evidence

      In her first issue on appeal, Farr contends that the district court wrongly

                                          5
admitted evidence of prior bad acts under Federal Rule of Evidence 404(b). Rule

404(b) provides that evidence of “other crimes, wrongs, or acts” is inadmissible

to prove the character of the accused, but “may be admissible for another purpose,

such as proving motive, opportunity, intent, preparation, plan, knowledge,

identity, absence of mistake, or lack of accident.” Fed. R. Evid. 404(b)(2). This

court imposes four requirements for evidence to be admitted under Rule 404(b):

      (1) evidence of other crimes, wrongs, or acts must be introduced for
      a proper purpose; (2) the evidence must be relevant; (3) the court
      must make a Rule 403 determination whether the probative value of
      the similar acts is substantially outweighed by its potential for unfair
      prejudice; and (4) the court, upon request, must instruct the jury that
      the evidence of similar acts is to be considered only for the limited
      purpose for which it was admitted.

United States v. Diaz, 679 F.3d 1183, 1190 (10th Cir. 2012). “Admission of

evidence under [Rule] 404(b) is reviewed under an abuse of discretion standard.”

Id. (internal quotation marks omitted).

      Farr contends that the challenged evidence failed to satisfy the second of

these requirements, i.e., relevancy. 1 Generally speaking, Farr argues, the

evidence admitted by the district court was “unrelated to the substantive charges.”

Aplt. Br. at 21 (capitalization in original omitted). And, she argues, “[t]he

      1
        As for the remaining three requirements, it is undisputed that the
government sought admission of the Rule 404(b) evidence to prove Farr’s intent
to avoid paying the trust fund recovery penalty at issue, the district court made a
Rule 403 determination that the probative value of the evidence was not
substantially outweighed by its potential for unfair prejudice, and the district
court, upon the request of Farr’s counsel, instructed the jury regarding the limited
purpose of the evidence

                                          6
government’s case [ultimately] consisted of a deluge of mini trials of acts that

[she] was never charged with or had been previously acquitted of under the guise

of [Rule] 404(b) evidence.” Id. at 22.

      Before addressing Farr’s specific challenges to the relevancy of the

evidence, we pause briefly to note the essential elements of the § 7201 violation

that the government in this case was required to prove. The district court’s

Instruction Number 19, which was unchallenged by Farr, outlined those elements:

         The defendant is charged in Count One of the indictment with a
      violation of 26 U.S.C. § 7201. This law makes it a crime for anyone
      willfully to attempt to evade or defeat the payment of taxes. To find
      the defendant guilty of this crime you must be convinced that the
      government has proved each of the following elements beyond a
      reasonable doubt:

             FIRST:       That substantial tax (the trust fund recovery
                          penalty) was due and owing by the defendant to
                          the federal government;

             SECOND:      That the defendant intended to evade and defeat
                          payment of that tax;

             THIRD:       That the defendant committed an affirmative act
                          in furtherance of her intent to evade and defeat
                          payment of that tax; and

             FOURTH:      That the defendant acted willfully, that is, with
                          the voluntary intent to violate a known legal duty.

United States v. Farr, No. 5:08-cr-00271-F, Dkt. No. 76, at 21 (W. D. Okla.). We

have previously noted that “[a]ctual knowledge is a strict requirement,” and that

carrying the burden of proof on this element “requires the government to negate a


                                          7
defendant’s claim of ignorance of the law or a claim that because of a

misunderstanding of the law, he had a good-faith belief that he was not violating

any of the provisions of the tax laws.” United States v. Hoskins, 654 F.3d 1086,

1090 (10th Cir. 2011) (internal quotation marks and brackets omitted).

       1) Evidence of the imposition of penalties in 1984, 1985, and 1995

       Three of the government’s witnesses testified that in 1984, 1985, and 1995,

the IRS assessed trust fund recovery penalties against Farr and her husband

arising out of their operation of their medical clinic and its related entities, and

that Farr was indicted and tried, but ultimately acquitted, of failing to pay the

1995 penalties. Farr argues on appeal that “[t]he 1984 and 1985 penalty

assessments clearly are not close to the time of the crime charged” and “also

relate to a state of events that occurred during the lifetime of [her] husband, Dr.

Farr[,] who owned and ran the” clinic. Aplt. Br. at 25. Thus, she argues, “[t]hese

events have no real probative value.” Id. at 26. And, as for her 1995 prosecution

and acquittal, she argues that it bore no relevance for purposes of proving her

intent in this case.

       We agree with the government, however, that this evidence was relevant for

purposes of establishing intent and, relatedly, to refute Farr’s assertions that she

was unaware of the trust fund recovery penalty at issue in this case. Although it

is true that the 1984 and 1985 penalties were assessed substantially prior to the

penalties at issue in this case, the nature of the penalties was virtually identical.

                                           8
Specifically, the penalties were imposed on Farr and her husband, as the owners

and operators of their clinic, due to their failure to pay quarterly employment

taxes that they actually withheld from their employees’ wages. Likewise, the

1995 penalties, and Farr’s related criminal proceedings, arose out of the same

type of conduct. Consequently, this evidence was indeed relevant for purposes of

establishing that Farr acted willfully in failing to pay the penalty at issue in this

case.

        2) Pyramiding

        Farr next complains about testimony from two IRS agents regarding

“pyramiding,” i.e., the fact that the clinic operated by Farr and her husband

repeatedly changed its name between 1978 and 1999 and was operated by a series

of different entities. According to the IRS agents, the following pattern

developed: the entity operating the clinic would fail to pay quarterly employment

taxes and incur substantial tax liabilities (including, at times, trust fund recovery

penalties); rather than paying those liabilities, the entity would be abandoned and

a new one, with a new tax identification number, would take its place for

purposes of operating the clinic.

        According to Farr, “[t]he alleged pyramiding occurred years ago and

related to a time when [Farr’s husband] was the owner and operator of the” clinic.

Aplt. Br. at 27. Farr further argues that “the government made no[] attempt or

effort to link the pyramiding to [her].” Id.

                                           9
      Farr is clearly mistaken on these points. The government’s evidence

established that at some point between 1978 and 1983, Farr assumed

responsibility for managing the business operations of the clinic and,

consequently, the payment of quarterly employment taxes. In turn, the evidence

established that, thereafter, trust fund recovery penalties were repeatedly assessed

against Farr in connection with the various entities that purportedly owned the

clinic. In short, the evidence established that Farr repeatedly failed to pay the

quarterly employment taxes and, rather than making good on those tax liabilities,

instead assisted in forming new entities to assume ownership and operation of the

clinic. Thus, contrary to Farr’s assertions, the government’s evidence clearly

linked her to the so-called pyramiding. In turn, this evidence was relevant for

purposes of establishing that Farr intended to evade and defeat the payment of the

trust fund recovery penalty at issue in this case.

      3) 1998 personal bankruptcy

      Kimberly Brauer, an IRS revenue agent, testified that in February 1998,

Farr and her husband filed a voluntary petition of bankruptcy and listed on their

related schedules unpaid and unsecured trust fund recovery penalties from 1984

through 1995. Brauer explained that the filing of the Farrs’ bankruptcy petition

would have temporarily halted any IRS efforts to collect on those penalties.

      Farr argues on appeal that this evidence “ha[d] no purpose or relevance

relating to the” penalties at issue in this case. Aplt. Br. at 29. In support, she

                                          10
argues that “no collection efforts were ever initiated by the IRS for the 2001 trust

fund recovery penalty [at issue in this case] during the 10 months that was

available prior to the initiation of [IRS internal] controls stopping notification and

collection efforts.” Id.

      We conclude, however, that this evidence was relevant for purposes of

establishing Farr’s general awareness of trust fund recovery penalties and how

they operated, as well as establishing her intent not to pay the 1999 quarterly

employment taxes and the resulting trust fund recovery penalty.

      4) 1999 day sheets - skimming of cash

      Susan Barnes, who worked for Farr at the medical clinic, testified that the

clinic did not accept insurance and that, consequently, patients would pay by

check, credit card, or cash. Barnes further testified that only Farr had access to

the clinic’s cash drawer. Lastly, Barnes testified that Farr often paid her and the

other clinic employees in cash, and that in doing so Farr deducted employment

and other taxes from their wages. IRS case agent Mike Favors in turn testified

that during 1999, the clinic took in approximately $42,907.33 in cash receipts, but

those receipts were never deposited into the clinic’s bank account, nor reported on

the clinic’s tax return for 1999.

      Farr argues on appeal that Favors’ testimony in this regard “could be for

no[] other purpose tha[n] to establish [her] propensity for committing crimes.”

Aplt. Br. at 30. In support, she notes that “[e]ven though there was never a

                                          11
showing that [she] was duty bound to file the tax return for the clinic, the

evidence was that [she] and the clinic for all practical purposes were one and the

same.” Id.

      We reject Farr’s arguments. As the government suggests, the evidence was

relevant for purposes of establishing that Farr intended to evade payment of the

quarterly employment taxes and resulting trust fund recovery penalty, and that she

willfully committed an affirmative act, i.e., concealment of her financial assets, in

furtherance of that intent.

      5) Purchase and sale of Norma Lessman property

      Through the testimony of Farr’s son, Kevin Sellers, and IRS case agent,

Mike Favors, the government established that during the 1990s, Farr and her

husband leased, with an option to purchase, a home in south Oklahoma City. The

home was owned by a woman named Norma Lessman. In 1999, the evidence

established, Farr was living in the home and paying approximately $4,750 per

month to Lessman, with $750 of each payment allocated to rent and the remaining

$4,000 allocated to the option. In October 2000, Farr’s son, Sellers, purchased

the home from Lessman for a total of $289,000, with Lessman granting Sellers the

$222,951 in equity that the Farrs had accumulated during their years living in the

home. Simultaneously with that purchase, Farr signed a document purportedly

gifting her interest in the home equity to Sellers. Sellers never lived in the home

and instead rented it to a third party. Less than a year later, on July 31, 2001,

                                          12
Sellers sold the home on the open market and received settlement proceeds of

$189,031.61.

      Although Sellers initially deposited those proceeds into his personal

checking account, he soon thereafter transferred a substantial portion of the

proceeds to a bank account held by a corporation called Trinity Management and

Consulting (Trinity). The evidence established that Trinity, which was nominally

owned by Sellers, his sister and his stepbrother, was formed by Farr in November

2000, shortly after Sellers’ purchase of the Lessman home. Likewise, Farr

established Trinity’s bank account by making an initial deposit into it using funds

from a business she owned called Bio Pro. During Sellers’ brief ownership of the

home, the mortgage payments were drawn on Trinity’s bank account, with the

checks being completed by Farr and signed by Sellers or his sister. Most

significantly, the evidence established that both during and after Sellers’

ownership of the home, Farr used the Trinity bank account, and the proceeds from

the sale of the home, to pay her own personal living expenses.

      Farr argues on appeal that this evidence should not have been admitted

because it established that she “was not the actor in this instance,” i.e., “[s]he

never purchased the residence and did not execute any of the loan documents

necessary for the purchase of the property.” Aplt. Br. at 31. But while it is true

that Farr was not the direct purchaser of the home and did not directly obtain a

mortgage for the purchase of the home, the evidence firmly established that Farr

                                          13
effectively instigated the purchase and ultimately benefitted from it by obtaining

and using the sale proceeds for her own personal use. More importantly, this

evidence was clearly relevant for purposes of establishing Farr’s intent to avoid

paying the trust fund recovery penalty at issue because it demonstrated that,

during the time period relevant to that penalty, she had secret access to a

significant amount of money, but failed to use any of it to pay the penalty.

Lastly, it established her willful commission of affirmative acts in furtherance of

that intent.

       6) Grant for the International Bio-Oxidative Medicine Foundation

       Government witness Doug Carlson, who was employed by the United States

Department of Housing and Urban Development (HUD), testified that in 2001 he

was involved in the supervision of a grant given by HUD to an Oregon-based

organization called the International Bio-Oxidative Medicine Foundation (IBMF).

Carlson testified that Farr was the executive director of IBMF and the person

responsible for submitting the grant application. Carlson testified that the

purpose of the grant was to examine the possibility of developing a medical clinic

and housing for retirement-aged people living in Grants Pass, Oregon. According

to Carlson, Farr was the person authorized on IBMF’s behalf to draw from the

grant funds. And, Carlson testified, between December 2001 and April 2003, Farr

obtained a total of $149,788 in grant funds, some of which was paid to Farr for

“consulting fees” and salary. The consulting fees paid to Farr (which totaled

                                         14
$36,000), Carlson testified, were discovered by HUD during a performance

review of the grant. Carlson testified that, because consulting fees were not

allowed under the terms of the grant, Farr was asked to repay the consulting fees

to HUD, but she failed to do so. Carlson also testified that IBMF was ultimately

asked to repay approximately $105,000 of the grant funds it received, but it never

did so.

      Farr argues on appeal that this evidence was irrelevant because it did not

establish “bad conduct or bad acts or other crimes other tha[n] a veiled statement

by [Carlson] that the government sought the return of $36,000.00 of the grant

money.” Aplt. Br. at 31. Moreover, Farr argues, “[t]here was absolutely nothing

in [Carlson’s] testimony or [the related] arguments presented by the government

to indicate how this evidence was probative of any issue in the case.” Id. at 32.

“At best,” she asserts, “the government wanted the jury to presume that [IBMF]

for all purposes was [Farr] and that the seeking the return of approximately

$36,000.00 was evidence of [her] propensity to commit crimes.” Id.

      We reject Farr’s arguments and conclude that the evidence was properly

admitted. In late 2000, Farr and her attorney met with IRS revenue agent Ray

Orren. During that meeting, Orren asked Farr about her income and assets, and

Farr in turn told Orren that she expected her sole income during 2001 to be a

$36,000 salary from her work at the medical clinic. Farr said nothing to Orren

about her role as executive director of IBMF or the federal grant that IBMF would

                                         15
receive. Consequently, Carlson’s testimony about Farr’s role with IBMF and the

funds she received from the grant was relevant for purposes of establishing Farr’s

intent to deceive the IRS and evade both the unpaid employment taxes and the

resulting trust fund recovery penalty. Moreover, the evidence established that

Farr personally used some of the grant funds during the time period following

imposition of the trust fund recovery penalty, and did so in a manner that was

evasive. Specifically, Farr deposited some of the grant funds into the Trinity

bank account, and in turn used the Trinity bank account to pay her own personal

expenses. We agree with the government that “a jury could easily infer [from this

evidence] that [Farr] was hiding something” and willfully failed to use the salary

and consulting fees she received from the grant to pay” the trust fund recovery

penalty. Aplee. Br. at 33.

      7) Testimony of IRS case agent Mike Favors

      Lastly, Farr complains that IRS case agent Mike Favors was allowed to

testify about (a) Farr’s personal use of a bank account belonging to an entity

called Paradise Properties, and (b) Farr’s receipt of a $100,000 loan from friends,

her placement of those loan proceeds into the Trinity bank account, and her

subsequent failure to use any of the loan proceeds to pay the trust fund recovery

penalty.

      We conclude that, like the other 404(b) evidence objected to by Farr, both

of these topics were relevant for purposes of establishing Farr’s willful failure to

                                          16
pay the trust fund recovery penalty at issue. According to Favors’ testimony,

Paradise Properties was a business trust established by Farr and her husband in

the mid-1990s. From at least 1999 through May 2002 (after the assessment of the

Trust Fund Recovery Penalties at issue), Farr used a bank account held by

Paradise Properties for her own personal use (e.g, for paying her rent, utility bills,

and church tithing). At no time did Farr use any of the funds from that account to

pay the trust fund recovery penalty. And, when Farr was interviewed by IRS

revenue agent Orren, she disclosed to him that she used a bank account at “SW

Bank,” but failed to explain that this account was actually owned by Paradise

Properties. When Farr learned of the criminal investigation in this case, she

established the Trinity bank account and began using that to pay her personal

expenses from. Finally, after establishing the Trinity bank account, Farr obtained

a $100,000 loan from friends, deposited the proceeds into the Trinity bank

account, and proceeded to use the funds for her Bio-Pro business, to pay her tax

attorney, and to pay some income tax liabilities stemming from 2005. Together,

all of this evidence clearly would have assisted the jury in finding that Farr was

attempting to hide assets and income from the IRS and that she acted willfully in

failing to pay the trust fund recovery penalty.

B. Denial of motion for judgment of acquittal

      In her second issue on appeal, Farr contends that the district court erred by

not entering a judgment of acquittal on the grounds that the government failed to

                                          17
provide sufficient evidence to meet its burden of showing that she willfully

evaded or attempted to evade and defeat the payment of the trust fund recovery

penalty. “We review de novo a district court’s denial of a defendant’s motion for

judgment of acquittal under Federal Rule of Criminal Procedure 29.” United

States v. Franco-Lopez, 687 F.3d 1222, 1226 (10th Cir. 2012). “Reversal is only

appropriate if no rational trier of fact could have found the essential elements of

the offense beyond a reasonable doubt.” Id. “When conducting this review, we

must consider the evidence adduced at trial in the light most favorable to the

government.” Id.

      “To obtain a conviction for [tax] evasion [under § 7201], the government

must prove three elements: 1) the existence of a substantial tax liability, 2)

willfulness, and 3) an affirmative act constituting an evasion or attempted evasion

of the tax.” United States v. Chisum, 502 F.3d 1202, 1244 (10th Cir. 2007)

(internal quotation marks omitted). In this case, Farr does not seriously dispute

that the government’s evidence established the first of these elements (and, in any

event, the government’s evidence clearly established that Farr owed a substantial

tax liability to the government). But she does challenge the sufficiency of the

evidence with respect to the last two elements. Ironically, the very evidence Farr

contends was improperly admitted under Rule 404(b) is the evidence offered by

the government to establish willful tax evasion and the affirmative acts Farr took

to accomplish that evasion.

                                          18
      Reviewing the evidence presented at trial in the light most favorable to the

government, it is quite clear that a rational trier of fact could have found that Farr

willfully evaded the trust fund recovery penalty and took affirmative steps to do

so. In November 2000, Farr met with IRS revenue agent Orren to discuss the

clinic’s unpaid employment taxes for 1999. During that meeting, Farr was less

than forthcoming. In particular, she provided Orren with an unrealistically low,

and indeed false, estimate of her likely 2001 income, failed to reveal the fact that

she was leasing an expensive automobile, and also failed to reveal that she was

using Paradise Properties’ bank account to pay her own personal expenses.

Shortly after this meeting with Orren, Farr began using Trinity’s bank account,

which she had just established, as a source for deposits of income and to pay her

personal living expenses. In August 2001, the IRS mailed to Farr and her

accountant, Ken Reynolds, notifications that a trust fund recovery penalty was

being assessed against Farr. Although Farr thereafter continued to receive income

and cash from various sources, at no time did she attempt to pay the penalty owed

to the IRS. Moreover, Farr continued to attempt to conceal income and assets

from the IRS by using the Trinity bank account as her own personal account.

      In connection with her challenge to the sufficiency of the evidence, Farr

also asserts, in passing, that IRS case agent Favors was a summary witness who,

at bottom, offered a substantial amount of lay opinion testimony that should have

been ruled inadmissible by the district court. Because, however, Farr did not

                                          19
assert any such objection to Favors’ testimony at trial, her arguments in this

regard are reviewed only for plain error. United States v. Bagby, — F.3d —,

2012 WL 4902919 at *6 (10th Cir. 2012) (“Where, as here, the defendant failed to

object to the admission of evidence at trial, this Court reviews only for plain

error.”). “Plain error is (1) error, (2) that is plain, which (3) affects substantial

rights, and which (4) seriously affects the fairness, integrity, or public reputation

of judicial proceedings.” Id. (internal quotation marks omitted).

      Even assuming, for purposes of argument, that Farr could satisfy the first

two prongs of the plain error test, she cannot demonstrate, and indeed has not

even attempted to demonstrate, that the admission of Favors’ testimony affected

her substantial rights. At most, she asserts that “[n]o reasonable jury could have

found that [she] acted affirmatively to evade the payment of the penalty without

piling inference upon inference.” Aplt. Br. at 40. But that is simply untrue.

Although the government presented no direct evidence of Farr’s intent to avoid

paying the trust fund recovery penalty, it presented a wealth of circumstantial

evidence firmly suggesting that Farr was well aware of the penalty, and that she

willfully took steps over an extended period of time in order to avoid paying the

penalty. Consequently, we conclude that the district court did not commit plain

error in admitting Favors’ testimony.




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C. Failure to dismiss the indictment

      In her third issue on appeal, Farr asserts that the district court erred by

denying her pretrial motion to dismiss the indictment for failure to charge the

offense under the appropriate statute. In assessing the denial of a motion to

dismiss an indictment on legal grounds, we review the district court’s decision de

novo. United States v. Ambort, 405 F.3d 1109, 1116 (10th Cir. 2005).

      Farr argues, as she did in her motion to dismiss, that the Internal Revenue

Code (IRC) “provides a specific criminal penalty for those responsible for

collecting and paying trust fund taxes who willfully fail to do so under § 7202.”

App. at 29-30. She argues that the indictment should therefore have charged her

with violating § 7202 rather than § 7201. In support, she asserts that “[w]hile

ordinarily the government is free to charge under whatever statute it deems

appropriate under the facts in question, when Congress sets forth provisions

governing the duties, penalties, and procedures with respect to specific conduct or

individuals as it did in Section[] 7202 . . . , the government may not ignore th[at]

provision[] specifically deemed by Congress to be the appropriate vehicle under

which to impose prosecution, simply because it favors another better.” Id. at 31.

      In addressing Farr’s arguments, we begin by revisiting our explanation in

Farr I of how quarterly employment taxes are collected and paid. The IRC

“requires ‘employer[s]’ to deduct from their employees’ wages the employees’

share of FICA and individual income taxes.” Farr I, 536 F.3d at 1176 (quoting 26

                                         21
U.S.C. § 3102(a)). “The employer is liable for the withheld portion of the

employees’ payroll taxes and must pay over the full amount to the government

each quarter.” Id. (citing 26 U.S.C. § 3403). “These withheld amounts are

considered to be held in a ‘special fund in trust for the United States’ after

collection each pay period until they are remitted to the government.” Id. (citing

26 U.S.C. § 7501). “After the employer pays net wages to its employees, the

withheld taxes are credited to the employees regardless of whether they are paid

by the employer, so that the IRS has recourse only against the employer for their

payment.” Id. (internal quotation marks and italics omitted).

      If an employer fails to pay the withheld employment taxes as required by

the IRC, the IRS can “pierce the corporate veil and proceed against individual

officers or employees responsible for collecting the offending [employer]’s

quarterly employment taxes.” Id. at 1177. In particular, the IRS can, under 26

U.S.C. § 6672, assess against such persons “a civil penalty equal to the amount of

the delinquent taxes,” i.e., a Trust Fund Recovery Penalty. Id. The IRS can also

seek criminal penalties against such persons under 26 U.S.C. § 7202, which

provides as follows:

      Any person required under this title to collect, account for, and pay
      over any tax imposed by this title who willfully fails to collect or
      truthfully account for and pay over such tax shall . . . be guilty of a
      felony and, upon conviction thereof, shall be fined not more than
      $10,000, or imprisoned not more than 5 years, or both, together with
      the costs of prosecution.


                                          22
26 U.S.C. § 7202. Or the IRS can, as it did in this case, first assess trust fund

recovery penalties and then, if the persons against whom those penalties are

assessed willfully fail to pay those penalties, proceed criminally against those

persons under the generic tax evasion provision, 26 U.S.C. § 7201, which

provides as follows:

      Any person who willfully attempts in any manner to evade or defeat
      any tax imposed by this title or the payment thereof shall, in addition
      to other penalties provided by law, be guilty of a felony and, upon
      conviction thereof, shall be fined not more than $100,000 ($500,000
      in the case of a corporation), or imprisoned not more than 5 years, or
      both, together with the costs of prosecution.

26 U.S.C. § 7201.

      In light of this framework, it is apparent that Farr’s attack on the indictment

lacks merit. While the government undoubtedly could have charged Farr with

violating § 7202, the focus of such a charge would have been different than the §

7201 charge alleged in the indictment. Given the clear language of § 7202,

charging Farr thereunder would necessarily have had to focus on her obligation

“to collect, account for, and pay over” the medical clinic’s quarterly employment

taxes for the 1999 tax year. In contrast, the § 7201 violation actually charged in

the indictment focused on a related, but different obligation, i.e., Farr’s obligation

to pay the trust fund recovery penalty that was assessed against her under 26

U.S.C. § 6672 for failing to pay the medical clinic’s quarterly employment taxes

for the 1999 tax year.


                                          23
      Moreover, case law fully supports, rather than undercuts, the government’s

decision to indict Farr under § 7201 rather than § 7202. To begin with, it is well

established that “[c]harging decisions are primarily a matter of discretion for the

prosecution,” United States v. Robertson, 45 F.3d 1423, 1437 (10th Cir. 1995),

and such “discretion is nearly absolute,” id. at 1438. Consequently, “[w]hen a

defendant’s conduct violates more than one criminal statute, the government may

prosecute under either (or both, for that matter, subject to limitations on

conviction and punishment).” United States v. Bradshaw, 580 F.3d 1129, 1136

(10th Cir. 2009). And, “[a]bsent certain allegations of impropriety, it is not the

role of the jury (or the judge) to decide whether the government has charged the

correct crime, but only to decide if the government has proved the crime it

charged.” Id. Finally, Farr cites to no statutory provision or case law that would

have, notwithstanding these general rules, required the government in this case to

have charged her under § 7202 rather than § 7201. Thus, in sum, we conclude

that the district court properly denied Farr’s motion to dismiss the indictment.

D. Double Jeopardy

      In her fourth and final issue on appeal, Farr contends that the Fifth

Amendment Double Jeopardy Clause prohibited her from being placed in jeopardy

twice for the same offense. As the government correctly asserts in its appellate

response brief, however, the law of the case doctrine bars this claim.

      Farr first raised her double jeopardy argument in a pretrial motion to

                                          24
dismiss the indictment. App. at 16. The district court denied Farr’s motion in an

order issued on January 28, 2009. Id. at 47. Rather than proceeding to trial, Farr

filed an interlocutory appeal challenging the district court’s denial of her motion.

This court affirmed the district court’s decision, concluding that “Farr ha[d] failed

to show that her right to be free from double jeopardy [wa]s implicated by her

current charges.” Farr II, 591 F.3d at 1326. Consequently, the case was

remanded to the district court for trial. Id.

      “The law of the case doctrine posits that when a court decides upon a rule

of law, that decision should continue to govern the same issues in subsequent

stages in the same case.” United States v. LaHue, 261 F.3d 993, 1010-11 (10th

Cir. 2001). Because, as noted, this court in Farr II considered and rejected the

same double jeopardy argument that Farr now asserts, we are “precluded from

reconsidering this issue, and [Farr] is not entitled to relief.” United States v.

Irving, 665 F.3d 1184, 1193 (10th Cir. 2011).

      AFFIRMED.




                                           25
11-6294 - United States v. Farr

HARTZ, Circuit Judge, concurring:



      I concur in the result and join all of Chief Judge Briscoe’s opinion except

Section II(C). To reject Farr’s challenge to the indictment, no analysis is required

beyond what is in the final paragraph of Section II(C): “When a defendant’s

conduct violates more than one criminal statute, the government may prosecute

under either.” United States v. Bradshaw, 580 F.3d 1129, 1136 (10th Cir. 2009).

Because Farr was properly charged and convicted of a violation of 26 U.S.C. §

7201, it is unnecessary to discuss the meaning of § 7202.
