                               UNPUBLISHED

                  UNITED STATES COURT OF APPEALS
                      FOR THE FOURTH CIRCUIT


                               No. 11-4684


UNITED STATES OF AMERICA,

                Plaintiff - Appellee,

           v.

SAMUEL J.T. MOORE, III,

                Defendant - Appellant.



Appeal from the United States District Court for the Eastern
District of Virginia, at Richmond.    Robert E. Payne, Senior
District Judge. (3:10-cr-00249-REP-1)


Argued:   September 19, 2012            Decided:   November 28, 2012


Before DUNCAN and DAVIS, Circuit Judges, and Timothy M. CAIN,
United States District Judge for the District of South Carolina,
sitting by designation.


Affirmed by unpublished opinion. Judge Davis wrote the opinion,
in which Judge Duncan and Judge Cain joined.


ARGUED: David G. Barger, GREENBERG TRAURIG, LLP, McLean,
Virginia, for Appellant.   Joseph Brian Syverson, UNITED STATES
DEPARTMENT OF JUSTICE, Washington, D.C., for Appellee.       ON
BRIEF: Lee W. Kilduff, LAW OFFICE OF LEE W. KILDUFF, Richmond,
Virginia, for Appellant.   Kathryn Keneally, Assistant Attorney
General, Frank P. Cihlar, Chief, Criminal Appeals & Tax
Enforcement Policy Section, Gregory Victor Davis, UNITED STATES
DEPARTMENT OF JUSTICE, Washington, D.C.; Neil H. MacBride,
United States Attorney, Alexandria, Virginia, for Appellee.


Unpublished opinions are not binding precedent in this circuit.




                                2
DAVIS, Circuit Judge:

     Appellant        Samuel       J.T.    Moore,    III   (“Moore”),         owned   and

operated    Club      Velvet   (“the       Club”),   a   strip   club    in     downtown

Richmond,     Virginia.        A    jury    convicted      him   of     tax    offenses

relating    to   tax    years      2005,    2006,    and   2007.   He    appeals      his

convictions      on    various      grounds,     including   sufficiency         of   the

evidence, as well as the district court’s denial of his motion

to suppress evidence seized during a search of the Club. He also

challenges his sentence. For the following reasons, we affirm.



                                            I.

                                            A.

     In 2000, Moore opened Club Velvet as a sole proprietorship

(i.e., a Schedule C corporation), and registered the business as

L.A. Diner. The Club (and thereby Moore) received income from

various sources. For purposes of this case, 1 the Club’s income

fell into six main categories:

     The first income category comprised cover charges, which

were tracked by “doorwatchers.”




     1
        The overarching question at trial was whether the
government proved that the Club’s gross receipts were in fact
substantially higher than the amount Moore reported on Schedule
C of his Form 1040 tax returns.



                                             3
     The second income category comprised dancer fees and fines.

These were payments by dancers of the Club’s share of payments

(by patrons to the dancers) for lap dances (ranging from $20 to

$30), and fines for “violations” of Club rules, such as failing

to perform a minimum number of dances. The amount the dancers

owed in fees and fines was tracked by a “dancewatcher.” Several

dancewatcher     notebooks,    which    tallied   dances   and   fines,   were

recovered during the search of the Club.

     The third income category comprised disc jockey payments.

Under the procedures implemented by Moore, each of the dancers

paid the DJ $40 per night, and the DJ turned over half of those

payments to the Club.

     The fourth income category comprised fees, ranging from $10

to $20, the Club received on cash advances to customers on their

credit cards.

     The fifth income category comprised fees the Club received

beginning   on   August   5,    2005,   when   three   ATMs   installed     the

previous    month   became     operational.    These   were   fees   paid   by

patrons withdrawing cash from the ATMs.

     The sixth and final category comprised income from the sale

of food, drinks (including $250 bottles of champagne, which gave




                                        4
patrons access to the Club’s third-floor “champagne room”), and

tobacco products, as well as from pool table rentals. 2

      Moore relied on his accountant, Greg Jonson (“Jonson”), to

prepare his individual tax returns, which included the Club’s

income on Schedule C. To the extent Moore reported the Club’s

income     to   Jonson    he     did   so    using     hand-written     forms   called

“daily     sheets,”      which    listed     the     Club’s   revenue    in    each    of

several categories: food, drinks, and cigars; cover charges; lap

dances; pool table rentals; and fines. Moore also used the daily

sheets     to   report    to     Jonson     the    amounts    he   deposited    in    the

Club’s bank account. Some deposits were from the minority of

patrons who used credit cards, and were deposited directly into

the L.A. Diner account. Most patrons, however, paid with cash.

On   the   daily   sheets,       Moore      reported    the   amount    deposited     as

“cash to bank.”

      But the credit card revenue and “cash to bank” totals did

not account for the full amount of the Club’s revenue, because

Moore was using another avenue to, in effect, deposit cash in


      2
       The Club also received money that Moore invested from his
own savings. Because the Club was a sole proprietorship, those
funds did not constitute taxable income for the Club (since
Moore was effectively transferring his own funds among his own
accounts). Thus, any of Moore’s own funds that he contributed to
the Club (either in cash or to the Club’s Bank of America
account in the name of L.A. Diner) did not constitute taxable
income.



                                             5
the bank; that is, on a nightly basis, Moore replenished the

cash held in the three ATMs he had installed in July 2005. Each

time a patron withdrew cash from an ATM, the funds were debited

from the patron’s bank account and credited, along with a fee,

to   the    L.A.   Diner    account.      The   sums    Moore    deposited          in   the

Club’s account in this manner equaled $256,660 in 2005, $776,260

in 2006, and $693,980 in 2007.

       To summarize, there were three ways the Club’s revenue was

deposited     in   the     L.A.    Diner    bank     account:     (1)    credit          card

payment transfers; (2) cash deposited directly into the bank;

and (3) cash used to replenish the ATMs, which was indirectly

deposited in the bank when a customer withdrew the cash from the

ATM.

                                           B.

       In    August    2007,      the     Virginia     Department       of    Alcoholic

Beverage     Control     (“ABC”)        began   investigating      the       Club    after

receiving complaints that it was serving alcoholic beverages to

underage customers, serving alcohol after hours, and allowing

fully nude lap dances, any one of which would have constituted

violations of Virginia law. Undercover ABC agents visited the

Club several times in late 2007 and observed the violations that

were   the    subject      of   the     complaints.    Meanwhile,       the    Richmond

Police Department (“RPD”) had also begun investigating the Club,

although     for   different          alleged   offenses.       Detective      Sergeant

                                            6
Steve Ownby (“Ownby”) had learned from a confidential informant,

a former dancer at the Club who was Moore’s ex-girlfriend, that

Moore   was   engaged     in   illegal      narcotics   and   prostitution

activities. See United States v. Moore, 775 F. Supp. 2d 882, 886

(E.D. Va. 2011) (“Moore I”).

      Ownby’s investigation led him to seek the assistance of

Robin Rager (“Rager”), a Special Agent at the federal Internal

Revenue Service. Ownby and Rager had worked together previously

during other investigations. Id. Ownby contacted Rager on August

31, 2007, because he knew that Rager “had expertise that would

be helpful in analyzing financial aspects of the investigation.”

Id.

      Sometime in September or October 2007, Ownby contacted a

state   prosecutor,     Shannon   Taylor,    about   the   possibility   of

convening a grand jury investigation into the suspected illegal

activities at the Club. Around the same time, the ABC agents

also separately contacted Taylor about the evidence they had

gathered. The ABC and RPD then continued a joint investigation

and conducted additional undercover visits to the Club. Around

this same time, in November 2007, Rager opened an IRS “Primary

Investigation.” Id. In connection with Moore’s later motion to

suppress, the district court found that the purpose of opening

the investigation was to “provide assistance and resources to



                                     7
Sgt. Ownby’s state investigation” and to “account for her time

for administrative purposes.” Id.

     In February 2008, Ownby began to prepare an application for

a   search    warrant.      The     execution     date        for    the    warrant     was

accelerated after the RPD received a report from a woman who

alleged      that     Moore       was    having    an     “inappropriate             sexual

relationship” with her underage daughter. Id. at 887. A state

judge    issued     the    warrant      on   February     22,       2008,    and   it   was

executed early the next day. The warrant authorized the police

to search for evidence of prostitution (Va. Code §§ 18.2-346,

18.2-347, 18.2-348, 18.2-357), bestiality (Va. Code § 18.2-361),

public    nudity       (Richmond        City     Code    §      66-249),       and      drug

distribution        (Va.   Code    §    18.2-248).      The    police       officers    who

conducted the search were accompanied by ten IRS agents and four

agents from the federal Bureau of Alcohol, Tobacco, and Firearms

(ATF). Ownby sought the assistance of the federal agents for two

reasons: (1) “it was expected that the search would yield a

substantial volume of documentary evidence to be catalogued,”

and “the RPD lacked sufficient staff to conduct the document-

intensive     search       and    to    manage    the    search        in    an    orderly

fashion”; and (2) “Sgt. Ownby decided that it was necessary to

keep search preparation completely secret, even from other RPD

sections.” Moore I, 775 F. Supp. 2d at 887. The state officers,



                                             8
assisted by the federal agents, executed the search warrant and

seized documents and money from the Club.

      Ultimately, Moore was not charged with the state offenses

underlying the search warrant. Instead, on September 7, 2010, he

was indicted by a federal grand jury in the Eastern District of

Virginia on two charges of tax fraud. On October 6, 2010, the

grand jury returned a three-count superseding indictment. Counts

One and Two charged Moore with making and subscribing a false

tax   return    for    tax    years   2005   and     2006,   respectively,   in

violation of 26 U.S.C. § 7206(1). 3 Count Three charged Moore with

tax evasion for tax year 2007, in violation of 26 U.S.C. § 7201.

      Moore    was    tried   from    February   7   through   15,   2011,   and

convicted on all three counts. The district court sentenced him

to 78 months’ imprisonment followed by three years of supervised

release, and imposed a $250,000 fine. Moore filed a motion for a

new trial and a motion for a judgment of acquittal on Count One.

The district court denied each in separate memorandum opinions.

Moore timely appealed.




      3
       Because the Club was a sole proprietorship, Moore reported
the business’s receipts or sales on Schedule C of his individual
Form 1040 tax return. Counts One and Two therefore alleged that
the amounts Moore reported as gross receipts or sales on his
Schedule C returns were less than the actual gross receipts or
sales.



                                        9
                                            II.

        Moore first argues that the evidence produced at trial was

insufficient to support his conviction on Count One, relating to

tax year 2005. This alleged insufficiency also, in Moore’s view,

entitles him to a new trial on Counts Two and Three.

        We begin by explaining a bit more about the charges Moore

faced. Count One charged Moore with making and subscribing a

false tax return, in violation of 26 U.S.C. § 7206(1), for tax

year 2005. Moore’s tax return for 2005 reported gross business

receipts        of    $546,887.    The     government     argues    that    the   trial

evidence        showed    that    Moore    willfully      understated      the    Club’s

gross      receipts      for   2005   by    $34,400. 4    Count    Two   also    charged

fraudulent underreporting of income, for tax year 2006. For that

year Moore reported gross Club receipts of $688,304, which the

government argues understated his actual income by $354,050.

       Count Three was somewhat different, because Moore did not

file a tax return for tax year 2007. He did, however, report

some       of   the   Club’s     income    to     his   accountant,      although   the

government sought to prove that the reported amount understated

his actual income for 2007, just as the reported income was

understated for 2005 and 2006. The amount Moore reported to his

       4
        At   trial   the   government                    argued   that  the  2005
understatement was $101,953, but by                      sentencing decreased the
estimated understatement to $34,400.



                                             10
accountant       as    the   Club’s     gross     receipts       was   $808,470.     The

government       argues       the     evidence        shows     that    this       number

understated the Club’s 2007 receipts by $255,506. 5 The statute

under    which    Moore      was    charged     for   tax     year   2007   was    not    §

7206(1), because he did not actually file a return, but rather

26 U.S.C. § 7201.

     “We review the sufficiency of the evidence to support a

conviction by determining whether there is substantial evidence

in the record, when viewed in the light most favorable to the

government,       to    support      the      conviction.”       United     States       v.

Palacios, 677 F.3d 234, 248 (4th Cir. 2012) (quotation marks

omitted). “[I]n the context of a criminal action, substantial

evidence   is     evidence     that    a   reasonable         finder   of   fact   could

accept as adequate and sufficient to support a conclusion of a

defendant’s guilt beyond a reasonable doubt.” United States v.

Burgos, 94 F.3d 849, 862 (4th Cir. 1996) (en banc).

     To prove a violation of 26 U.S.C. § 7206(1), the government

must prove that “(1) the defendant made and subscribed to a tax

return containing a written declaration; (2) the tax return was

     5
        There is some confusion as to the amount that the
government argues the 2007 receipts were understated. In its
brief, the government asserts that unreported cash receipts for
2007 were $237,621, Gov’t Br. 16, but the sentencing exhibit it
cites for the figure lists unreported receipts for 2007 as
totaling $255,506, J.A. 1560. For purposes of this appeal, we
assume the sentencing exhibit figure is the correct one.



                                           11
made   under    penalties    of   perjury;   (3)    the    defendant    did   not

believe the return to be true and correct as to every material

matter; and (4) the defendant acted willfully.” United States v.

Aramony, 88 F.3d 1369, 1382 (4th Cir. 1996). As to Count Three,

in order to obtain a conviction for income tax evasion under 26

U.S.C. § 7201, the government must prove “[1] willfulness, [2] a

substantial      tax   deficiency,     and    [3]     an    affirmative       act

constituting an attempted evasion of the tax.” United States v.

Goodyear, 649 F.2d 226, 227-28 (4th Cir. 1981). “In order to

prove a tax deficiency, the government must show first that the

taxpayer had unreported income, and second, that the income was

taxable.” United States v. Abodeely, 801 F.2d 1020, 1023 (8th

Cir. 1986) (internal quotation marks omitted).

       One way to prove a defendant’s actual income is through

direct evidence. As the Eighth Circuit has explained, however,

such evidence is rare:

       Proof of unreported taxable income by direct means is
       extremely difficult and often impossible. By the very
       fact that a taxpayer has failed to report the income,
       it behooves him to obscure any trace of its existence.
       Therefore, direct methods of proof, which depend on
       the taxpayer’s voluntary retention of records of the
       income, fail. Accordingly, the government has armed
       itself with an arsenal of indirect methods of proof
       which rely on circumstantial evidence to disclose
       unreported taxable income.

Id.    Nonetheless,    the    government     here     did     present    direct

evidence,      which   it    called   “specific-items         evidence.”      The


                                      12
specific-items      evidence   mainly        consisted       of   documents   seized

from   the   Club   that,   the   government       argued,        showed   the   Club

received significantly more income than was reported on Moore’s

tax returns.

       The government did not rely solely on the specific-items

evidence,    however.   Rather,    as    in     many     §    7206(1)   cases,    the

government also sought to prove that the Club’s receipts were

higher than those reported through a circumstantial method of

proof: here, a modified version of the “bank-deposits” method.

       Under [the bank-deposits] method, all deposits to the
       taxpayer’s bank and similar accounts in a single year
       are added together to determine the gross deposits. An
       effort is made to identify amounts deposited that are
       non-taxable, such as gifts, transfers of money between
       accounts, repayment of loans and cash that the
       taxpayer had in his possession prior to that year that
       was deposited in a bank during that year. This process
       is called “purification.” It results in a figure
       called net taxable bank deposits.

       The   government  agent   then  adds   the amount of
       expenditures made in cash . . . . The total of this
       amount and net taxable bank deposits is deemed to
       equal gross income. This is in turn reduced by the
       applicable deductions and exemptions. The figure
       arrived at is considered to be “corrected taxable
       income.” It is then compared with the taxable income
       reported by the taxpayer on his return.

United States v. Boulet, 577 F.2d 1165, 1167 (5th Cir. 1978)

(footnote    omitted)    (quoted    in        United     States     Department     of

Justice Criminal Tax Manual, § 33.01 (2008)).




                                        13
     The   government      presented    its    specific-items       evidence   and

its bank-deposits evidence as independent, alternative methods

of proof. 6 As the district court instructed the jury:

     Both of [these] methods are acceptable methods of
     proving unreported income. They should be viewed by
     you independently, and you can use either one of them,
     or you can use both of them for any and all tax years
     in deciding whether the government has proved the
     elements of the crimes charged beyond a reasonable
     doubt.

J.A. 1320.

     As we describe below, each of the government's methods of

proof is independently sufficient to support the verdict here.

                                        A.

     We    first    examine    the     sufficiency       of   the   government’s

specific-items     evidence.     The    specific-items        evidence   did   not

account for all of Moore’s alleged unreported income, but it did

not need to; to convict Moore, the jury needed to find only that

Moore willfully understated the Club’s gross receipts by some

“material”    amount.      Aramony,    88    F.3d   at   1382.   The   government

relied on the following specific-items evidence.

     First,        Moore      employed         a     “dancewatcher,”       whose

responsibility was to tally the number of lap dances each dancer

     6
       The specific-items evidence was also relevant to the bank-
deposits method of proof, because the specific-items evidence
(such as ledgers tallying lap dances) corroborated that the
funds deposited in the L.A. Diner account constituted income the
Club received in the course of its business.



                                        14
performed      each   night.    With    this     information   Moore     sought    to

ensure that each dancer turned over Moore’s cut of each lap

dance fee, and also to enforce his minimum-dance requirement,

under which a dancer who failed to perform a certain number of

dances paid him a “fine.” During the February 2008 raid of the

Club,    the    RPD    seized   (and     later     turned   over    to   the     IRS)

dancewatcher notebooks for July and August 2005, and December

2007 through February 2008. Some pages tallied the number of

dances performed, some showed dancers’ hours, and others tracked

fines the dancers owed and/or paid.

       Rager analyzed these notebooks to determine how much the

Club likely earned from lap dance fees and fines during the

periods covered by the notebooks. She then compared those totals

with     the   revenue    numbers       Moore    reported   to     Jonson.     Rager

testified that, according to her analysis, Moore substantially

understated the Club’s revenue for the periods covered by the

notebooks.      In    particular,      the   evidence   showed     at    least    the

following:

Period          Receipts per           Receipts per     Amount understated,
                dancewatcher’s         daily sheets     including unreported
                notebook                                fines (other than
                                                        minimum dance) and
                                                        lap dance fees
July 2005       $13,950                $5,280           $8,670
August 1-       $4,495                 $1,640           $2,855
10, 2005
December        $40,851                $15,418          $25,433
2007
January         $36,130                $12,510          $23,620

                                          15
2008
February         $30,895               $2,910            $27,985
1-22, 2008

She also testified that Moore received additional income during

those periods, such as minimum-dance fines. Minimum-dance fines,

she testified, increased the unreported income by $17,190 for

July 1, 2005 through August 10, 2005, and $24,300 for December

1, 2007 through February 22, 2008. The government argues that

the jury could reasonably extrapolate from that evidence, and

thereby infer from Rager’s testimony, that Moore understated the

Club’s gross receipts for each of tax years 2005 through 2007.

       Second,    the    three    dancewatchers       who    testified   at   trial

examined a summary of the receipts reported from 2005 through

2007 for Thursdays, Fridays, and Saturdays, the Club’s busiest

nights. All of them testified that the fines, lap dance fees,

and cover charges reported on the daily sheets for the periods

they    worked    at     the    Club   were     too   low.   They   reached    this

conclusion because, for example, lap dance fees reported were

lower   than     the    cover   charges    reported,    even    though   in   their

experience the Club took in more revenue from lap dances than

from cover charges, and because the reports showed many nights

when no fines were reported, even though fines were collected

nearly every night.




                                          16
     Third, the government showed that although Moore collected

cash advance fees from patrons, he never told his accountant he

collected such fees.

     Fourth, the government showed that Moore altered records to

conceal his under-reporting. In one instance, when an employee

completed a daily sheet reporting cover charges of $2,395, Moore

crossed out that figure and replaced it with $890; but $890 in

cover charges was too low for that day, which was a busy weekend

day. Moore also instructed Jonson to increase the fines and lap

dance fees he had reported on the daily sheets for January 2008

after the dancewatcher notebook covering that month was seized

during the search of the Club. On February 29, 2008, one week

after the search, the amounts of gross receipts shown on the

Club’s January 2008 books for fines and lap dance fees, and

cover   charges   were   increased    by   $35,520   and   $5,280,

respectively.

     Fifth, in a will Moore signed on March 14, 2007, Moore

attested that if the Club were run by a “competent manager,” it

would net over $1 million per year. J.A. 1932. The government

argued that because this number was far higher than the $546,887

and $688,304 he reported as gross receipts for 2005 and 2006

(and higher than the $808,470 on his unfiled draft 2007 return),

Moore’s admission in his will was further evidence that Moore

was underreporting his income.

                                 17
      Based on these specific items of evidence, the government

argues that the evidence was sufficient for the jury to find

that Moore willfully understated the Club’s gross receipts from

2005 to 2007 in two ways: (1) by understating the amount the

Club received in the form of cover charges, lap dance fees, and

dancer fines; and (2) by failing to report income at all in

certain categories, such as cash advance fees, even though on

the daily sheets there were blank spaces for Moore to include

additional revenue sources.

      We agree that the specific-items evidence, standing alone,

was sufficient to support the verdicts on each count. From that

evidence, the jury could reasonably infer that Moore willfully

understated the Club’s gross receipts for 2005, 2006, and 2007.

Nevertheless, because a primary focus of the trial was on the

government’s bank-deposits evidence, we proceed to examine the

sufficiency of that evidence, as well.

                                   B.

      The government also relied on a modified version of the

bank-deposits method of proof, supplemented and corroborated by

the   specific-items   evidence.   The   object   of   the   bank-deposits

method is to sum the deposits to a taxpayer’s account in a

particular year, ascertain the portion of those deposits that

constitutes taxable income, and then show that actual taxable

income was higher than the reported taxable income.

                                   18
       The     government’s         burden      under       the       bank-deposits         method

encompasses three elements: “(1) that, during the tax years in

question,       the        taxpayer     was    engaged       in       an    income    producing

business or calling; (2) that he made regular deposits of funds

into     bank        accounts;      and       (3)    that       an     adequate       and     full

investigation          of     those     accounts      was       conducted       in    order    to

distinguish between income and non-income deposits.” Abodeely,

801    F.2d     at    1023.    Once     the    government         has       established      these

elements, “the jury is entitled to infer that the difference

between       the     balance      of   deposited       items         and    reported       income

constitutes unreported income.” Id.

       On the “adequate and full investigation” prong, which the

Boulet court referred to as the “purification” prong, 577 F.2d

at    1167,     the        government’s       burden       is    to     show    that    it    did

“everything that is reasonable and fair [in] the circumstance to

identify any non-income transactions and deduct them from total

deposits,”           Abodeely,      801       F.2d    at        1024-25       (alteration       in

original).       “[T]he       government        is   not        required       to    negate   all

possible non-income sources of the deposits, particularly where

the source of the income is uniquely within the knowledge of the

taxpayer.”          United States v. Slutsky, 487 F.2d 832, 841 (2d Cir.

1973).    “At        the    same   time,       however,         the    government      may    not

disregard explanations of the defendant reasonably susceptible

of being checked.” Id. (internal quotation marks omitted). “The

                                                19
critical question is whether the government’s investigation has

been sufficiently adequate to support the inference that the

unexplained      excess    in    receipts     was    in    fact    attributable      to

currently taxable income.” Id.

       If a particular deposit is from a non-taxable source (e.g.,

a transfer from another of the taxpayer’s bank accounts), then

the government must deduct the amount of the deposit from the

gross deposit figure. If (1) the government cannot identify the

source    despite    all     reasonable       efforts      to     do   so,   (2)    the

defendant does not explain why the deposit did not constitute

taxable income, and (3) the government proves that the failure

to report the income was willful, then the jury may infer that

the defendant willfully understated his income. See Slutsky, 487

F.2d at 840.

       In this case, the government made three modifications to

the    typical     bank-deposits       analysis.       First,      ordinarily       the

government seeks to prove both the amount of unreported income

that a defendant deposited in a bank and the amount of cash the

defendant spent without ever depositing. See Boulet, 577 F.2d at

1167 (describing the latter as “the amount of expenditures made

in    cash”);    Abodeely,      801   F.2d    at    1023   (explaining       that   the

phrase “cash expenditure” as an “adjunct to ‘bank deposits’” is

a misnomer, and is more accurately described as “non-deposits”).

Here, apparently for simplicity’s sake (and because it resulted

                                         20
in a more conservative estimate), the government limited its

estimate    of     Moore’s      unreported    income        to    funds    that     were

deposited, in one way or another, in the Club’s bank account.

     Second, ordinarily in a bank-deposits case, the government

seeks to show the total deposits for a full tax year in order to

capture the defendant’s full actual income for that year. Here,

as   to    2005,     again      apparently    for     simplicity’s         sake,     the

government limited its analysis to the period beginning July 28,

2005, the date Moore had the three ATMs installed in the Club.

     Third,      the      government   modified       how    it    used    the     bank-

deposits method. Ordinarily, the object of applying this method

is to determine a taxpayer’s total corrected taxable income.

Here, the existence of the ATMs in the Club, and the fact that

the cash used to fund the ATMs consisted solely of cash earned

from operations at the Club, allowed the government to use the

bank-deposits evidence in a different way. The government’s goal

was to show that the Club must have received significantly more

cash revenue than Moore reported as part of the Club’s gross

receipts. At trial, the government alleged that in order to fund

the ATMs, the Club must have received additional cash from an

“unknown source” in the amounts of $104,953 in 2005, $497,095 in

2006, and $364,934 in 2007.

     By    the     time    of   sentencing,     the    government         conceded    an

error,    and    reduced     the   unreported    gross      receipts       number    for

                                        21
sentencing purposes to $34,400 for 2005, $368,457 for 2006, and

$255,508       for    2007.    Setting        aside    those        recalculations         for

sentencing, Moore argues there was a significant flaw in the

government’s         proof    at   trial     such     that    he    is   entitled      to   a

judgment of acquittal on Count One and a new trial on Counts Two

and Three.

     As part of the government’s proof at trial, one element of

its case was to show it had undertaken an “adequate and full

investigation,” Abodeely, 801 F.2d at 1023, to determine Moore’s

July 29, 2005 cash on hand. The July 2005 cash-on-hand figure

was crucial because if Moore had substantial cash on hand as of

the date the ATMs began operation, then the jury could not find

that the cash used to fund the ATMs came from cash generated by

operations at the Club.

     To prove that Moore did not have a significant cash hoard

as   of    July      2005,     the       government    relied       on   the      following

evidence.      On    December        6,   2004,     Moore    generated       a    financial

statement that listed his assets and liabilities, including cash

on hand. In that financial statement, Moore represented that his

cash on hand and in banks was $385,000. Rager corroborated this

figure    by    examining       bank      records,     real    estate     transactions,

loans,     safe      deposit       box     records,    and     currency        transaction

reports    (“CTRs”).         She     then   subtracted        the    total       balance    in

Moore’s bank accounts as of that date, which left $223,869 as

                                             22
the amount of actual cash Moore had on hand on December 6, 2004.

From    that   amount,      she    subtracted        the   total    in   cash    deposits

Moore made to the bank between December 6, 2004, and July 28,

2005, which resulted in $96,803 in cash on hand as of July 28,

2005. This amount was less than $2,000 shy of the amount of cash

Moore    was   discovered         to   have    when    the   Club   was    searched     in

February 2008. Accordingly, the government's evidence tended to

show that although Moore had some cash on hand as of July 25,

2005, in effect he did not use any of it to fund the ATMs

because he possessed virtually the identical sum of cash seven

months later.

       In the course of establishing Moore’s July 2005 cash-on-

hand figure, the government presented evidence of funds that

Moore    withdrew         from    several      safe    deposit      boxes,      and   then

deposited      in    the   L.A.    Diner      bank    account.     Moore   argues,     and

apparently          the    government         does     not    dispute,       that      the

government’s evidence showed that from 1999 through the first

half of 2005, he withdrew $359,000 in cash from safe deposit

boxes and deposited it in the L.A. Diner account.

       As the centerpiece of his appeal, Moore argues that this

$359,000 represents capital contributions to the Club. That is,

the money in the safe deposit boxes constituted Moore's savings

(either from pre-2005 income or from a substantial inheritance

he received when his parents died), and thus did not constitute

                                              23
income taxable between 2005 and 2007. When (during the period

before August 2007) he took that cash from safe deposit boxes

and deposited it in the L.A. Diner account, Moore argues, he was

making loans to the business. Thus, Moore essentially argues

that because he loaned the business $359,000 prior to August

2005, and because the Club was a sole proprietorship, when the

Club started generating profit after July 2005, he was entitled

to offset the first $359,000 in income as a kind of credit.

       This     $359,000    offset,    Moore    argues,      entitles    him   to   a

judgment of acquittal on Count One, because $359,000 is larger

than the amount of alleged unreported income for 2005. He argues

further that the government’s failure of proof also entitles him

to a new trial on Counts Two and Three, because “errors of such

magnitude would have materially aided the defendant’s argument

that the government made hundreds of thousands of dollars in

mistakes . . . and that the defendant was not willful.” Moore

Br. 26.

       Moore’s argument is singularly unpersuasive. An owner of a

sole     proprietorship         has     no     duty     to    document     capital

contributions to the business because such contributions have no

tax consequences. Instead, the owner contributes whatever funds

might be necessary to run the business, and the business and the

owner are treated as a single entity for tax purposes and are

liable    for    taxes     on   net   income   (i.e.,    gross   receipts      minus

                                         24
deductible business expenses). See Schedule C, IRS Form 2040;

Littriello v. United States, 484 F.3d 372, 375 (6th Cir. 2007)

(noting that in a sole proprietorship, “a single individual owns

all the assets, is liable for all debts, and operates in an

individual capacity”). But Moore does not argue that he claimed

(or    would    have      claimed)     the      $359,000    as    deductible         business

expenses, or that the money should be viewed as such. Rather, in

Moore’s        view,       any      capital          contributions           to      a        sole

proprietorship, no matter how long ago they were made, can be

used    to     offset     a   future      tax    liability       from    current         income

produced by the sole proprietorship. That is not the law, and

Moore    cites       no   authority       to    support     his    view      that        a    sole

proprietor can make loans to himself in this way and deduct

future “loan repayments” whenever doing so suits the taxpayer.

       In short, the amount Moore contributed to the business from

1999 through July 2005 is irrelevant to whether income the Club

received after July 2005 constitutes taxable income to Moore.

The evidence was thus sufficient for a jury to convict Moore

based   on     the    bank-deposits          method    of   proof,      as    well       as    the

specific items method of proof.



                                             III.

       Moore    also      seeks    a   new     trial   based      on    newly     discovered

evidence.       He   argues       that,    at    trial,     the    government’s              bank-

                                                25
deposits analysis overstated his taxable income for 2005 through

2007 by $191,236 because he had paid that amount in local and

state taxes but did not deduct that amount from gross receipts.

By    the   time    of     sentencing       the   government        agreed   that     Moore

should be credited with these payments, but at trial it had

admitted     only    that     the    number       should   be   decreased       by   about

$92,000. Moore argues that Agent Rager’s eventual concession at

sentencing that the original calculation of Moore’s unpaid tax

liability was incorrect constituted newly discovered evidence,

entitling him to a new trial. We disagree that this development

merited a new trial.

       Federal      Rule     of     Criminal      Procedure     33     states    that    a

district court “may vacate any judgment and grant a new trial if

the    interest     of     justice     so    requires,”       and    describes       “newly

discovered evidence” as a potential reason for a new trial. “We

review      the    district       court’s    Rule    33    decision     for     abuse   of

discretion.” United States v. Robinson, 627 F.3d 941, 948 (4th

Cir.    2010).      In   analyzing      whether       newly     discovered      evidence

requires a new trial, we look to five factors:

       (a) the evidence must be, in fact, newly discovered,
       i.e., discovered since the trial; (b) facts must be
       alleged from which the court may infer diligence on
       the part of the movant; (c) the evidence relied on
       must not be merely cumulative or impeaching; (d) it
       must be material to the issues involved; and (e) it
       must be such, and of such nature, as that, on a new
       trial, the newly discovered evidence would probably
       produce an acquittal.

                                             26
Id. (quoting United States v. Custis, 988 F.2d 1355, 1359 (4th

Cir. 1993)).

      Moore argues that Rager’s failure to concede her erroneous

failure to credit Moore with the unclaimed deductions for state

and local taxes was newly discovered evidence, because she did

not make the concession until after Moore was convicted. Moore

argues he was diligent in pursuing this “evidence” because his

counsel    vigorously      cross-examined       Rager,    and    recalled    Jonson

(who had testified for the government but then agreed that the

government’s calculation was off by $191,236). Moore argues that

had Rager admitted the error earlier, “there is a substantial

likelihood    that   the    jury   would     have   viewed      the     government’s

evidence     differently,      would     have     viewed       the    IRS   agent’s

testimony differently, and [would have] found that reasonable

doubt existed on the tax counts.” Moore Br. 21.

      The government responds that Moore’s claim fails because

the   concession     at    sentencing    (1)     was     not    newly    discovered

evidence; (2) was merely cumulative or impeaching; and (3) would

not have impacted the verdict.

      We need not decide whether Rager’s testimonial admission at

sentencing constitutes “newly discovered evidence” for purposes

of Rule 33 because Rager’s concession was “merely cumulative or

impeaching,” and we cannot say that had the jury heard it, the

testimony    would   have    “probably       produce[d]    an    acquittal.”     See

                                        27
Custis, 988 F.2d at 1359. First, the jury heard testimony that

Rager’s calculation was erroneous from one of the government’s

own   witnesses:     Moore’s        accountant,        Jonson.     Thus,   Rager’s

concession would have been cumulative. Second, even accounting

for the adjustment for local and state taxes, Moore still under-

reported his gross income for each of the years in question.

Third, the government’s bank-deposits analysis was conservative;

it assumed that cash on hand of any denomination was available

to fund the ATMs, even though the ATMs only dispensed $20 bills,

and it did not attribute any income to Moore for personal cash

expenditures,    though     the      bank-deposits        method     permits   the

government to include such expenditures. See, e.g., Boulet, 577

F.2d at 1167.

      We thus reject Moore’s argument that the district court

abused its discretion in denying the motion for a new trial

based on Rager’s delayed concession that Moore should have been

credited with $191,236.



                                       IV.

      Moore   next   argues    that,     even     if    there    was   sufficient

evidence to support the verdicts, the district court committed

reversible error in instructing the jury on how to apply the

bank-deposits   analysis.      As    explained    above,     the    bank-deposits

method requires that the government prove, among other things,

                                        28
how much cash Moore had on hand at the beginning of the relevant

time period. Here, the time period the government used began on

August   5,    2005,    the   date         the    ATMs       became    operational.        Moore

argues this was error. If the government wanted to use the bank-

deposits method, he argues, the jury still had to be instructed

“that the starting point for a cash-on-hand analysis was January

1,   2005.”    Moore    Br.      38.       By    shifting       the    starting       date,     he

argues, the government inflated his unreported income by over

$100,000. We disagree.

      This      argument      reflects                a     misunderstanding          of      the

government’s method of proof. By choosing August 5 as a starting

point    for    2005,      the     government               sought     to     prove    Moore’s

unreported income only for the latter five months of 2005, not

the full year. Because the government was starting its analysis

of Moore’s bank deposits in August, that was the date it had to

determine (and the jury had to find) Moore’s cash on hand. The

reason for requiring proof of a beginning cash-on-hand figure is

to   determine      whether      and       to    what       extent    cash    already      in   a

defendant’s possession (rather than cash from taxable income)

explains      the   source    of       a    cash          deposit    during    the    relevant

period. See, e.g., United States v. Mounkes, 204 F.3d 1024, 1028

(10th Cir. 2000) (noting that proof of cash on hand is required

to   “distinguish      between     unreported,               taxable    income       and   those

deposits and expenditures not derived from taxable income”).

                                                 29
       As the government explains, because Rager’s bank-deposits

analysis “relied exclusively on bank deposits attributable to

ATM withdrawals to calculate the gross income defendant failed

to report[,] . . . only cash that defendant possessed on the

date    the     ATMs   were    installed      could      offer      an     alternative

explanation      for    the    deposits      to    defendant’s         bank     account

attributable to ATM withdrawals.” Gov’t Br. 34. In other words,

Moore “could not have used any cash that he had on hand on

December 31, 2004, to fund the ATMs unless he still had that

cash on hand when the ATMs were installed.” Id.

       The district court thus did not err in instructing the jury

to determine Moore’s cash on hand as of August 5, 2005.



                                        V.

       Moore next argues that the district court erred in denying

his    motion    to    suppress.     Before       August    2007,        the   RPD   was

investigating      Moore      on   suspicion      that     he    was      involved   in

narcotics and prostitution. The investigating officers came to

suspect that Moore may have also been engaging in tax fraud, and

in August 2007 contacted the IRS, asking it to assist in the

investigation of Moore. On or about February 20, 2008, Ownby

drafted a state search warrant. The City of Richmond Circuit

Court issued the warrant on February 22, 2008. The government



                                        30
obtained the documentary evidence it introduced at trial during

the execution of that warrant.

       Moore argues that the search was unlawful for two reasons.

First, he argues that the true purpose of obtaining a search

warrant was to seize evidence that Moore was violating federal

law, not state law; in his view, the state-law allegations in

the warrant application were a pretext to allow the IRS to avoid

obtaining       a   federal       warrant,        and    the   government        therefore

violated      Federal      Rule    of   Criminal         Procedure    41.     Second,   he

argues       that   the    state    warrant        was    overbroad     and      therefore

violated the Fourth Amendment.

                                             A.

       We first examine whether the search violated Federal Rule

of     Criminal     Procedure       41.    The      Federal     Rules       of    Criminal

Procedure govern “criminal proceedings” in the federal courts.

Fed.    R.    Crim.   P.    1(a)(1).      Rule      41    governs    the    process     for

applying for, obtaining, and executing a federal search warrant.

Unless an exception to the warrant requirement applies, Rule 41

requires that investigating officers obtain a warrant issued by

a federal magistrate judge, “or if none is reasonably available,

a judge of a state court of record in the district.” Fed. R.

Crim. P. 41(b)(1).

       The evidence in this case was obtained during the execution

of a state search warrant, in the context of an investigation

                                             31
that involved both state and federal agents. Moore argues that

because federal agents were involved in preparing the search

warrant       application        and   in    executing        the    search,         Rule     41

applied. Because the Rule requires either that officers have

obtained a federal warrant or that a federal magistrate judge

have    not       been    “reasonably        available,”       and    because          neither

condition was met here, he argues the government violated Rule

41.    Finally,      he    argues,     the    violation       of    Rule       41    justifies

suppressing the evidence obtained during the execution of the

warrant.

       We    addressed      the    applicability         of   Rule        41    to    a     joint

federal-state investigation most recently in United States v.

Claridy, 601 F.3d 276 (4th Cir. 2010). There, the search was

conducted pursuant to a state search warrant obtained by a state

police officer who was part of a formal federal-state joint task

force       and   had     been    federally       deputized.        Id.        at    278.     The

defendant argued that the officer “violated Fed. R. Crim. P. 41

by applying to a state judge for a warrant, despite the fact

that he was conducting a federal narcotics investigation and

despite the fact that there was no indication that a federal

magistrate        was     unavailable.”       Id.   at    279.       We    rejected          that

argument and devised the following test:

       [T]he triggering condition for application of Rule 41
       is not a finding that the investigation was federal in
       nature but a determination that the proceeding was a

                                             32
       federal proceeding. . . . When . . . federal and state
       agencies cooperate and form a joint law-enforcement
       effort, investigating violations of both federal and
       state law, an application for a search warrant cannot
       categorically be deemed a “proceeding” governed by the
       Federal Rules of Criminal Procedure, based simply on
       the role that federal law-enforcement officers played
       in the investigation. See, e.g., [United States v.
       Smith, 914 F.2d 565, 569 (4th Cir. 1990)] (observing
       that mere involvement of federal officers in the
       execution of the search warrants does not trigger
       application of Rule 41). Such an investigation is
       conducted on behalf of both sovereigns, and its object
       is to reveal evidence of crime--be it federal crime or
       state crime. . . .

       [W]hen a member of a joint task force initiates a
       proceeding in state court to obtain a search warrant
       in furtherance of the joint investigation, it is not
       only relevant to understand the role of federal
       officers in obtaining the warrant and conducting the
       search, but it is also necessary to review the details
       of the proceeding itself to determine what law the
       warrant will serve and the scope of the warrant.

Id. at    281-82      (emphasis      in   original).      The    facts    the   Claridy

court    deemed      material   to    finding      that    the    “proceeding”     for

obtaining the search warrant was a state proceeding (governed by

state law) rather than a federal proceeding (governed by Rule

41) were (1) the warrant application alleged violations of state

law;    (2)    the   officers   authorized        to   execute     the    search   were

state officers; and (3) the warrant was returnable to the state

court.

       Here,    it    is   undisputed      that    the    same    three    facts   are

present. Nonetheless, Moore argues that the federal agents’ role

in obtaining and executing the search warrant here was greater


                                           33
than in Claridy, for these reasons: (1) Rager opened a “primary”

IRS investigation of Moore into money laundering to assist Ownby

and track her time; (2) Rager analyzed Moore’s bank records to

help Ownby prepare the search warrant application; (3) Rager’s

time records showed that on February 20, 2008, she recorded six

hours    as   “draft       SW”;    (4)     in    the   warrant     application,        Ownby

stated he had experience investigating violations of the federal

Money Laundering Control Act, not any state money laundering

statutes;     (5)     in   an     internal      IRS    form    Rager    prepared     before

executing the search, she referred to Moore’s income as “legal

income,” which Moore argues suggests a federal tax case despite

Rager’s testimony that she had simply made an error filling out

her form; (6) the majority of the officers present during the

execution of the search warrant were federal (including 10 IRS

agents    and       four    other        federal       agents),     and     Rager’s       IRS

supervisor      was    listed      on     a     “preop”   report       as   a   supervisor

(though   Rager       indicated      that       this    merely     referred     to    a   job

classification rather than a role in the search); (7) after the

search, although city agents reviewed seized videotapes, only

IRS agents reviewed seized financial records; and (8) the local

special prosecutor testified that the focus of her investigation

was narcotics and prostitution, not money laundering.

     Because          Rager        later        opened        an    official         federal

investigation of Moore, and the financial records seized during

                                                34
the search were admitted at trial, Moore argues that the state

money    laundering         offense     was      listed    in    the   search    warrant

application “as a pretext to allow the IRS agent access to the

financial records without seeking a federal search warrant under

Rule 41.” Moore Br. 45.

       The government responds that the district court did not

clearly err in finding that the state law allegations were not a

pretext for avoiding having to obtain a federal warrant, and

therefore no federal warrant was required and Rule 41 did not

apply.       The   government       relies    on    the    following     countervailing

evidence: (1) Rager testified that Ownby, a state officer, asked

Rager to examine Moore’s bank records because of her expertise

in financial investigations; (2) both Rager and Ownby testified

that although Rager assisted with some analysis of Moore’s bank

records for inclusion in the search warrant application, Rager

did not otherwise assist in drafting or reviewing the warrant;

(3)    the    warrant      itself    was     issued   to    investigate      only     state

crimes (narcotics, prostitution, public nudity, bestiality, and

money    laundering);         (4)    Ownby       testified      that   he    decided    to

include the state money laundering charge in the application

because he wanted to investigate further what Moore was doing

with     the       proceeds      from      the     suspected      drug      dealing    and

prostitution,        not    to   gather       evidence     of   tax    fraud;   (5)     the

affidavit attached to the warrant application provided evidence

                                              35
of state crimes, not federal crimes; 7 (6) Ownby, not Rager, was

responsible for planning and executing the search of the Club;

and (7) a member of Ownby’s unit took custody of the items

seized in the search.

      We agree with the government that the district court did

not clearly err in finding that the IRS only assisted in the

preparation     and   execution     of    the   search      warrant.   There    was

sufficient evidence for the district court to find that, under

Claridy, Rule 41 did not apply and thus the allegations of state

law were not a pretext for avoiding having to obtain a federal

warrant. The district court therefore properly concluded that

the   absence   of    a   federal   warrant     did   not    render    the   search

unlawful. 8

      Moore argues Claridy is distinguishable because the IRS and

the RPD did not have a formal joint investigation arrangement as

existed in Claridy. But that is not a meaningful distinction. In

      7
       The affidavit described grand jury testimony from two
undercover Virginia ABC agents and an informant who worked with
the ABC agents that (1) Moore provided cocaine and heroin to
Club employees; (2) a Club dancer sold cocaine to the second
informant; (3) Ownby’s informant procured prostitutes from the
Club, and Moore received a portion of the fee; (4) Club dancers
regularly provided sexual services to patrons; and (5) Moore
used the Club’s surveillance cameras to videotape sexual acts
performed there.
      8
       We do not reach the question of whether suppression would
have been an appropriate remedy if a Rule 41 violation had in
fact occurred.



                                         36
Claridy,      it    was    not    the    structure     of   the   investigation        that

determined the law that applied to the issuance of the warrant,

but the proceeding the law enforcement officers chose to pursue

to    obtain       the    warrant.       601   F.3d    at   281-82.      Moreover,      the

existence      of    the     task      force   in   Claridy   cuts      against    Moore’s

argument,      because           the     federal      government’s       role     in   the

investigation in Claridy was more extensive than the IRS’s role

here. See also United States v. Williams, 977 F.2d 866, 867,

869-70 (4th Cir. 1992) (holding Rule 41 did not apply because

there was “no evidence suggesting that the warrant obtained by

[a state police officer] was issued in response to a directive

or urging from” a federal agent); United States v. Smith, 914

F.2d 565, 569 (4th Cir. 1990) (holding Rule 41 did not apply

because there was “no evidence that [the state police officer]

applied for the warrant at the direction or urging of a federal

officer”).

                                               B.

       We   next     examine        whether    the    warrant     was   overbroad.      The

Fourth Amendment requires that a search warrant “particularly

describ[e] the . . . things to be seized.” U.S. Const. amend.

IV. The warrant here authorized officers to search and seize a

wide range of materials, including “[a]ny and all bank records”

and     all         “items       evidencing          the    obtaining,          secreting,

transferring, and/or concealment and/or expenditure of money.”

                                               37
J.A. 127. Moore argues that, as to the financial records to be

seized, the warrant was insufficiently particularized because it

“set no temporal limit” on which such records could be seized,

even    though          “the    allegations       that    formed    the     basis     for    the

affidavit described events occurring in 2006 and 2007.” Moore

Br. 45.

       We disagree. When “[t]he dates of specific documents could

not have been known to the Government,” a search warrant need

not    be    limited       by    “specific      time     periods.”       United     States    v.

Shilling,         826    F.2d    1365,     1369    (4th    Cir.     1987)     (abrogated      on

other grounds by Staples v. United States, 511 U.S. 600 (1994)).

Moore       has    pointed       to   no   evidence       showing    that        officers    had

reason to believe his alleged money laundering was limited to

particular         years.       Though     officers       had     Moore’s        general    bank

account information, they could not have known what specific

documents revealing money laundering (or other financial crimes)

Moore possessed, what years they corresponded to, or what years

(if any) would suggest money laundering. Further, where fraud is

concerned, there is leeway to allow for more expansive warrants.

See, e.g., United States v. Oloyede, 982 F.2d 133, 139-140 (4th

Cir. 1992).

       At     bottom,          the    warrant     was     concerned,        in    part,     with

“financial records that, by their nature reveal an attempt to

disguise          and     conceal      the      true     nature     of    a      prostitution

                                                 38
business,” J.A. 127. Consequently, the officers had no way of

knowing the specific time periods of those records. As a result,

we hold that the district court did not err in evaluating the

sufficiency of the warrant’s particularity.



                                          VI.

       Moore next argues that the district court erred when it

excluded      the    following      evidence:     (1)    exhibits      showing    Club

income for 2009 and 2010; (2) impeachment evidence that several

of the Club’s former employees failed to file tax returns; and

(3) evidence that Moore’s accountant advised him not to file a

tax return in 2007. “We review a trial court’s rulings on the

admissibility of evidence for abuse of discretion, and we will

only   overturn       an    evidentiary       ruling    that    is   ‘arbitrary     and

irrational.’ To that end, we ‘look at the evidence in a light

most favorable to its proponent, maximizing its probative value

and minimizing its prejudicial effect.’” United States v. Cole,

631 F.3d 146, 153 (4th Cir. 2011) (citations omitted).

                                          A.

       We turn first to Moore’s argument that the district court

abused its discretion in excluding exhibits showing Club income

for    2009    and        2010.   As   explained       above,    the    government’s

specific-items        method      of   proving     Moore’s      unreported       income

included      use    of    the    recovered     dancewatcher     notebooks,      which

                                          39
contained records for just a few months, to determine a monthly

average from which to extrapolate the yearly unreported income.

At trial, Moore argued that this method overstated his actual

income    because       the    months       for       which    there    were    dancewatcher

notebooks happened to be particularly lucrative.

        One    way    Moore       sought    to    substantiate          his    position      was

through       income    statements         that       Jonson    prepared       for    2009   and

2010, based on the daily sheets Moore provided him during those

years.    He    argued      those        documents       were    relevant      because       they

provided “some probative value in determining whether there was

consistency in the dollars that [Moore] reported” on the daily

sheets. J.A. 1201. In other words, the income Moore reported to

Jonson in 2009 and 2010 would give the jury “a more complete

picture of whether there is, in fact, underreporting or whether

the   reporting        is     consistent.”        J.A.        1203.    This    evidence,      he

argued,       showed    that       the     Club’s       income    averaged       $12,000      to

$17,000 per month both before the February 2008 search and after

–- not the higher amount argued by the government.

        The government objected, on what seems to have been two

grounds.       First,       the     government          argued    the     2009       and     2010

statements were irrelevant to the Club’s income from 2005 to

2007,    the    tax     years      in    question.       Moreover,       even    if    Moore’s

reported income for 2009 and 2010 was similar to his reported

income in 2005 to 2007, that was irrelevant to the amount of his

                                                 40
unreported income in 2005 to 2007. In other words, the amount

Moore put on the daily sheets in any of the years was irrelevant

to how much he failed to include on those sheets. Second, the

government argued that, to the extent the evidence was relevant,

there was no foundation for it. The statements would only have

been relevant to the amount of Moore’s unreported income for

2005 to 2007 if the 2009 to 2010 statements, unlike the daily

sheets from previous years, included all of the Club’s income.

To establish relevance on that basis, Moore had to show that

there was a change in procedure around 2008, such that Moore

began reporting all of the Club’s income on the daily sheets.

Moore sought to lay such a foundation through Jonson, but could

not    do     so   because    Jonson   lacked       firsthand      knowledge    about

Moore’s reporting practices, and his testimony on that point was

thus hearsay.

       The district court sustained the government’s objection on

Rule    403    grounds.      The   court    first   explained      that   Moore   had

failed to lay a foundation for the income statements, and that

in any event the documents had “marginal relevance . . . if

any.”   J.A.       1206.   Moreover,   to    the    extent   the    documents     were

marginally relevant, their relevance was “outweighed by delay

and confusion”: delay because of the time “necessary to deal

with it,” and confusion because “the jury likely would be . . .

having to guess what the foundation for the document was.” Id.

                                           41
     On appeal, Moore argues the court’s foundation ruling was

wrong because one of the government’s own witnesses testified

that “the post-search procedure was to record all dance income

in the cash register (which insured the accountant would pick it

up on the tax return).” Moore Br. 27 (citing J.A. 667-68). Moore

also argues that the statements were admissible “even without

that foundation, since [he] knew, post-search, that he was under

investigation and had an incentive to report his income or risk

more charged offenses.” Moore Br. 27-28 (citing J.A. 682-83).

     We   hold      that   the   district       court   did   not    abuse   its

discretion     in   excluding    the   income    statements   from    2009   and

2010. The court acted well within its discretion in concluding

that their relevance was outweighed by delay and the risk of

confusion. 9

                                       B.

     We next turn to Moore’s argument that the district court

erred in excluding impeachment evidence concerning several of

the government’s witnesses who were former Club employees. At

trial, the government stipulated that three of its witnesses

filed tax returns that were false because they did not report


     9
       Our conclusion is bolstered by the fact that, at trial,
Moore argued simply that Jonson’s testimony provided the
necessary foundation, and failed to make either of the arguments
to the court that he now makes on appeal.



                                       42
cash    tip    income.      The        court   permitted      Moore       to    cross-examine

those    witnesses         about       their    allegedly     false       returns,     on   the

ground that making a false statement on a tax return is evidence

of    untruthfulness,            and    therefore      can    be   used        to   impeach    a

witness under Federal Rule of Evidence 608(b).

       Moore also sought to cross-examine three other former Club

employees about their failure to file tax returns at all. He

argued       that    their        failure       to     file    was        as    relevant      to

truthfulness as the filing of false returns, because “[i]f you

don’t file your tax return, it could be a crime.” J.A. 797. The

district court sustained the government’s objection on Rule 403

grounds. The court explained that a person’s failure to file a

tax     return      is     not     necessarily        evidence       of    untruthfulness,

because      there       might    well    be    an    innocent     explanation        for   the

failure to file. A failure to file serves to impeach a witness

only    if    “the    circumstances            surrounding     the    failure        to    file”

prove that the witness actually owed taxes. J.A. 797. If Moore

were to ask the former employees whether they filed returns,

that question would have “opened the door to testimony about the

reasons why the former employees failed to file returns, thereby

potentially confusing the jury about the issues and delaying the

trial.” J.A. 1351. Accordingly, the court reasoned that “failing

to    file    a     tax    return        was    not    probative      of       character    for

untruthfulness, and, to the extent that it might be minimally

                                                43
relevant, the marginal relevance was substantially outweighed by

the danger of confusion of the issues, misleading the jury, and

considerations of delay and waste of time under Rule 403.” Id.

      On    appeal,       Moore      argues      that     the     court        abused    its

discretion in so concluding. We disagree. Moore is correct that

the witnesses’ conduct could have been not only a misdemeanor

failure to file, but also felony tax evasion. But the witnesses’

failure    to    file    would     have    been    relevant       only    if    they     owed

taxes,     and        establishing        that    fact        would      have     required

substantial time and effort. The court properly exercised its

discretion in finding that to the extent the witnesses’ failure

to file was relevant to their character for truthfulness, the

delay and confusion in establishing that fact outweighed any

impeachment value.

                                            C.

      We turn now to Moore’s argument that the district court

abused its discretion in refusing to admit evidence that Moore’s

accountant advised him not to file a tax return in 2007. Moore’s

tax   return     for    2007   was    originally        due     April    15,    2008,    and

October    15,    2008,     with     extensions.        He    had     made     $60,000    in

estimated       tax     payments     during       2007,       including        $50,000    in

estimated federal income taxes. In October and November 2008, he

made two additional tax payments totaling $95,000 for tax year

2007. But he never filed a return for 2007.

                                            44
      Count Three charged that Moore committed tax evasion in

violation        of    26   U.S.C.    §   7201     because     he    “received    taxable

income      of        approximately       $718,398.54”         and     thus      owed    “a

substantial amount of income tax,” but “willfully attempt[ed] to

evade and defeat a large part of the income tax,” in part by

committing the following “affirmative act[s] of evasion”:

      (a) maintaining a double set of books and records for
      CLUB VELVET;
      (b) self-funding CLUB VELVET’s ATM machines with
      substantial amounts of unreported cash proceeds; and
      (c)   providing    [Jonson]    with   false    financial
      information   regarding   CLUB   VELVET’s   gross   cash
      receipts.

J.A. 150-51.

      As stated above, the three elements of a violation of §

7201 are (1) willfulness, (2) a substantial tax deficiency, and

(3) “an affirmative act constituting an attempted evasion of the

tax.” Goodyear, 649 F.2d at 228. At trial, to prove that his

failure to file a return for 2007 did not constitute a willful

attempt to evade taxes, Moore sought to offer Jonson’s testimony

that Jonson was told by Moore’s attorney not to file the 2007

return, given the pendency of the criminal case.

      Although Moore frames his argument as an evidentiary issue,

it appears more like an argument asserting legal insufficiency.

He   does   not        seem    to   dispute      that   his    failure    to   file     was

“willful”    in       the     sense   that    he   fully      intended   not     to   file.

Rather, he seems to argue that the government must also show

                                              45
that   the   failure      to   file    itself      constituted    an   act     of   tax

evasion. But the government did not allege, or argue at trial,

that the failure to file was an “affirmative act of evasion.”

The statute requires proof of “evasion” only as to those alleged

acts. Accordingly, absent a reliance-on-counsel defense (which

Moore did not raise), the reason he failed to file (i.e., advice

of   counsel)      was   irrelevant      to      the   government’s    case    or   any

cognizable      defense,       and    thus       the   district   court       properly

excluded that evidence.

       Further, to the extent the jury might otherwise have been

confused     and     believed        that     failure     to   file    alone     could

constitute evidence of an affirmative evasive act, the court’s

instruction was adequate to clear up any such confusion. That

instruction included the following:

       [T]he phrase “attempts in any manner to evade or
       defeat any tax” contemplates and charges that Mr.
       Moore knew and understood that during the calendar
       year 2007, he owed a substantial federal income tax,
       and that he tried in some way to evade that tax.

       I instruct you now that merely failing to file a
       return is not sufficient to establish an attempt to
       evade a tax. You may not draw any adverse inference
       from the fact that the defendant did not file an
       income tax return for 2007.

J.A. 1318 (emphasis added). In these circumstances, we cannot

hold that the district court abused its discretion in refusing

to allow Jonson to testify that Moore’s attorney told him not to

file the 2007 return.

                                            46
                                                 VII.

       Moore     also    raises          two     issues      concerning          his     sentence.

First,    he    asserts        that       the    district        court     clearly       erred    in

finding a tax loss greater than $400,000 at sentencing. Next, he

asserts       that    the      district          court      abused       its     discretion      in

imposing a $250,000 fine.

                                                  A.

       We turn first to Moore’s argument concerning the district

court’s       finding    of      a       tax    loss     greater        than     $400,000.       The

applicable       sentencing          guideline          provides        standards        for    “Tax

Evasion; Willful Failure to File Return, Supply Information, or

Pay    Tax;     Fraudulent       or       False       Returns,         Statements,       or    Other

Documents.”      U.S.S.G.        §       2T1.1.       Subsection        (a)     establishes      the

base    level    for     the     offense         according        to    the     amount    of    “tax

loss,” or designates the level as 6 if the crime caused no tax

loss. U.S.S.G. § 2T1.1(a). Subsection (c)(1) explains that “[i]f

the    offense       involved        tax       evasion      or    a    fraudulent        or    false

return, statement, or other document, the tax loss is the total

amount of loss that was the object of the offense (i.e., the

loss that would have resulted had the offense been successfully

completed).”         U.S.S.G.        §    2T1.1(c)(1).           Note     (A)    to    subsection

(c)(1) establishes the following formula for computing tax loss

in cases involving fraudulent filings: “28% of the unreported

gross    income      .   .   .   plus          100%    of   any       false     credits    claimed

                                                  47
against tax, unless a more accurate determination of the tax

loss can be made.” U.S.S.G. § 2T1.1(c)(1) n.(A).

       Under the Guidelines, the government must prove tax loss by

a preponderance of the evidence. United States v. Butner, 277

F.3d 481, 487 (4th Cir. 2002). However, “[t]he amount of tax

loss    is    not    always      a    precise       figure,    and     ‘the    guidelines

contemplate         that   the       court    will    simply        make   a   reasonable

estimate based on the available facts.’” United States v. Mehta,

594 F.3d 277, 282 (4th Cir. 2010) (quoting U.S.S.G. § 2T1.1,

cmt. n.1). “In assessing whether a district court has properly

applied the Guidelines . . . we ‘review the district court’s

legal conclusions de novo and its factual findings for clear

error.’” United States v. Manigan, 592 F.3d 621, 626 (4th Cir.

2010)       (citation      omitted).         “Generally,      the     district    court’s

calculation of the amount of loss for sentencing purposes is a

factual finding reviewed for clear error.” Mehta, 594 F.3d at

281.

       At    sentencing,      the      government      presented       two     alternative

ways to calculate the tax loss: a “conservative” method, which

yielded a loss of $321,000, and an “aggressive” method, which

yielded a loss of $458,606. Moore objected to both, and the

district court adopted the latter.

       The first method, which resulted in the more “conservative”

loss of $321,000, was a reiteration of the government’s modified

                                               48
bank-deposits analysis at trial, although it credited Moore with

sales and admissions taxes the Club had paid from 2005 to 2007.

This analysis, which was modified to limit deposits to those

attributable to ATM withdrawals, yielded a loss of $321,676.

That was the number adopted by the Probation Office in its pre-

sentence         investigation            report.        Moore     argues         that       this

calculation was erroneous because “the IRS[] fail[ed] to credit

Moore with the approximate $359,000 in deposits he made to the

business before 2005.” Moore Br. 47 n.7. This argument fails for

the same reasons the $359,000 in pre-2005 deposits could not

offset taxes due on income the Club received later.

      The    government’s          second    calculation          was    more     aggressive,

and   yielded         a   loss    of   $458,606.     The    government          reached      this

figure      by    extrapolating           from     the     five     months        of     records

contained        in       the    dancewatcher       notebooks.          Leaving        out   some

additional        potential            sources      of     income,        the      government

calculated       that       in    these    five     months,       the    total     unreported

income was $96,988 in lap dance fees and recorded fines, and

$51,030 in minimum dance fines. This produced a monthly average

of $19,416 in unreported lap dance fees and recorded fines, and

$10,206 in unreported minimum dance fines. The government then

multiplied these average numbers by the number of months between

March 2005 and February 2008 for which there was no dancewatcher

data, and added to the unreported income amounts for the five

                                              49
months for which data existed. This produced a 36-month total of

$1,065,742 in unreported income. The government then calculated

the total federal and state tax loss from 2005 to 2007 by adding

the $1,065,742 in unreported income to the income Moore reported

on his 2005, 2006, and draft 2007 returns, and then calculating

the resulting additional tax due. This resulted in a total tax

loss of $458,606.

       Moore argues that this analysis suffered from five flaws,

but we are not persuaded by his arguments. First, Moore argues

that “the data sample was too small.” Id. Moore is correct that

the government relied only on dancewatcher notebook tallies from

July 2005, 10 days in August 2005, December 2007, January 2008

and part of February 2008, and then extrapolated the data from

those five months to the remaining 31 months. But this was a

reasonable     methodology,      especially     because   the    government

expressly excluded several categories of income in order to err

on the side of underestimating Moore’s unreported income.

       Second, Moore finds error in the fact that part of the

sample was from January and February 2008, rather than the years

for    which   Moore   was     prosecuted.    This   argument   erroneously

assumes that there was something about January and February 2008

that rendered the Club’s income non-probative of the Club’s pre-

2008   income.   There   was    nothing   inherently   wrong    about   using



                                     50
dancewatcher tallies from 2008 to estimate the Club’s monthly

income in previous years.

       Third, Moore argues that the income in some of the months

included in the calculation was not representative, and that the

government        should    have    included       data       from   2008    to    2010.   But

Moore has not shown that the district court’s adoption of the

government’s calculation was clearly erroneous. Similarly, the

court       did   not   clearly      err    in    declining          to   consider     income

amounts for the remainder of 2008. As the government explains,

“the    trial      evidence       showed     that       the    change     in      defendant’s

reporting practices was the result of the search of Club Velvet

and,    moreover,       even       though    the        amounts      defendant       reported

increased,        business     volume       actually          declined      following      the

search.” Gov’t Br. 52. 10

       Fourth, Moore argues that the government’s method of proof

erroneously        failed    to     deduct       from    his    gross       income    certain

business expenses, namely cash payments to waitresses, dancers,

cover charge collectors, and doorwatchers. Although he did not


       10
       Moore also argues that by including February 2008 in its
calculations, the government understated his reported income
because the warrant was executed on February 23, 2008, and he
had not yet reported that month’s income to the accountant. But
as the government correctly points out, that fact is irrelevant
because Moore had completed a daily sheet for each day in
February prior to the search. The amounts he intended to report
to his accountant were therefore apparent.



                                             51
claim these as deductions on his tax returns, he argues the

district   court      erred    in    failing         to   deduct     these     expenses       in

calculating his total taxable income for sentencing purposes. 11

The   government      offers       two     arguments      in     response.     First,        the

government      argues    Moore’s          position       is     “unsupported           by    the

record”    because       Moore       “fails          to   point      to      any     evidence

demonstrating      the   timing          or    amount     of   these      purported          cash

expenditures.”        Gov’t    Br.       53.    Second,     in      reliance       on    United

States v. Delfino, 510 F.3d 468 (4th Cir. 2007), the government

argues that “the district court was not required to consider any

deductions attributable to cash expenditures that [Moore] never

claimed on a filed tax return.” Gov’t Br. 53. 12

      If the district court had to take into account potential,

but unclaimed, deductions, the burden is on Moore to prove he

was entitled to those deductions. United States v. Gordon, 291

F.3d 181, 187 (2d Cir. 2002). Thus, Moore is arguing (1) as a

legal matter, tax loss must account for unclaimed but proven

deductions,     and    (2)    he     met       his   burden    to    show     that      he    was

entitled   to    deduct       from       his    gross     income      cash    he     paid     to

employees. The government responds that (1) as a legal matter, a

      11
        Moore claimed deductions only for those payments he made
by check.
      12
        We review de novo whether                         “the      tax     loss     includes
deductions.” Delfino, 510 F.3d at 472.



                                               52
taxpayer convicted of tax evasion or filing a false return is

not entitled to unclaimed deductions in calculating tax loss

under U.S.S.G. § 2T1.1, and (2) even if tax loss should be

reduced by the amount of unclaimed deductions, Moore did not

prove he was entitled to any unclaimed deductions for cash paid

to employees.

       Moore’s argument is mostly, but not entirely, foreclosed by

Delfino. There, however, the defendants did not file any tax

returns, whereas Moore filed tax returns for 2005 and 2006, and

for most purposes the government treated Moore as if he had also

filed a tax return for 2007. We decline to determine whether

this    distinction    renders    Delfino     distinguishable,      because

Moore’s claim fails for another reason: he has not presented any

evidence demonstrating the timing or amount of the expenditures

purportedly giving rise to unclaimed deductions. In other words,

Moore failed to prove he was entitled to a deduction (albeit

unclaimed) for business expenses based on cash expenditures to

dancers and other employees.

       Fifth and finally, Moore argues that the government failed

to   reduce   the   alleged   unreported    income   by   the   $359,000   in

deposits he made from his personal account to the L.A. Diner

account. This argument fails for the reasons discussed above.

       The district court thus did not err in finding a tax loss

greater than $400,000.

                                    53
                                       B.

      Moore    also     challenges     his     fine.    At   sentencing,       the

government sought, and the court adopted, a two-level upward

departure to a guideline level of 24. For this offense level,

the   advisory   fine    range   was   $10,000    to    $100,000.   U.S.S.G.    §

5E1.2(c)(3).     The    district     court    imposed    a   variant    fine   of

$250,000. Moore argues the fine was “excessive and not justified

by the record,” and in any event the district court imposed the

fine “without sufficient explanation.” Moore Br. 54.

      We   disagree     with     Moore.      First,    the   district   court’s

explanation was sufficient. In explaining its decision to vary

upward under 18 U.S.C. § 3553(a), the court stated that the

increased fine was necessary “to reflect the seriousness of the

offense, including the loss here, and to promote respect for the

law and promote just punishment and afford deterrence.” J.A.

1548. The court also noted that Moore’s offense was particularly

serious, justifying an above-Guidelines fine, because (1) Moore

“engaged in a deliberate, calculated scheme”; (2) “he did it in

a way that lasted over a substantial period of time”; (3) “he

tried . . . to imbue [his scheme] with legitimacy by using his

accountant and misleading his accountant into what the income

was”; (4) he “engaged in some of the most obstructive behavior”

that the court had seen; and (5) he engaged in that behavior

“even while the case was proceeding to and during trial.” J.A.

                                       54
1549-50. In the court’s view, Moore, “and anybody else who would

be inclined to commit offenses such as this, need[ed] to be

deterred from” committing such conduct. J.A. 1550. This was a

satisfactory explanation for the upward variance on the fine.

       Second, the evidence supported the district court’s finding

that Moore engaged in “obstructive behavior.” First, Moore tried

to influence Lauren Jennings, a former waitress and bartender at

the Club who was subpoenaed to give grand jury testimony. She

testified that Moore told her to lie to the grand jury and

testify that she was paid by check, not in cash. Second, before

trial    the    government      showed    that    one    of    the    witnesses    the

defense planned (but later declined) to call, Claire Coleman, a

former Club dancer and dancewatcher, was receiving a “pretty

penny”    for    testifying.     Third,    there    was       evidence     that   Moore

tried    to    hide    his   assets.   After     learning      of    the   indictment,

Moore transferred his interests in the Club to a friend, Scott

Staten, who sold the club to a third party but maintained the

proceeds for Moore in an account under Staten’s name. Staten

also    sold    four    of   Moore’s   vehicles    for    him,       maintaining   the

proceeds in the same manner.

        Moreover, the fine was within the statutory maximum. Under

18 U.S.C. § 3571(d), the maximum fine is “twice the gross gain

or twice the gross loss.” As discussed above, the district court

did not clearly err or abuse its discretion in finding that the

                                          55
amount   of   the   tax   loss   was    over   $400,000.   A   $250,000   fine

obviously does not exceed twice that loss.



                                       VIII.

     For the reasons set forth, we affirm the judgment in all

respects.

                                                                    AFFIRMED




                                        56
