                                                                                                                           Opinions of the United
2009 Decisions                                                                                                             States Court of Appeals
                                                                                                                              for the Third Circuit


6-5-2009

USA v. Platts
Precedential or Non-Precedential: Non-Precedential

Docket No. 08-2911




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"USA v. Platts" (2009). 2009 Decisions. Paper 1226.
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                                                    NOT PRECEDENTIAL
                       UNITED STATES COURT OF APPEALS
                            FOR THE THIRD CIRCUIT
                                 _____________

                                      No. 08-2911
                                     _____________

                           UNITED STATES OF AMERICA

                                            v.

                                  JAMES C. PLATTS,

                                                Appellant.
                                   _______________

                    On Appeal from the United States District Court
                       for the Western District of Pennsylvania
                                 (D. C. No. 07-cr-021)
                     District Judge: Honorable Donetta Ambrose
                                  _______________

                       Submitted Under Third Circuit LAR 34.1(a)
                                    May 20, 2009

            Before: FUENTES, JORDAN, and NYGAARD, Circuit Judges.

                                  (Filed: June 5, 2009)
                                   _______________

                              OPINION OF THE COURT
                                  _______________

JORDAN, Circuit Judge.

      James C. Platts appeals from the Judgment of Conviction entered against him by

the United States District Court for the Western District of Pennsylvania. He argues that
his conviction on five counts of attempted tax evasion is not supported by sufficient

evidence. For the reasons that follow, we will affirm.

I.       Background

         Because we write solely for the parties, who are familiar with the factual

background of this case, we recite only those facts necessary to our disposition. On

January 16, 2007, a grand jury in the Western District of Pennsylvania indicted Platts on

five counts of attempted tax evasion, in violation of 26 U.S.C. § 7201. Count One of the

indictment charged Platts with attempting to evade payment of his personal income taxes,

and Counts Two through Five charged him, in his capacity as sole shareholder and

president of Pinnacle Building Company (“Pinnacle”), with the company’s attempted

evasion of its tax obligations under the Federal Insurance Contribution Act and for its

employee wage withholdings for the first, third, and fourth quarters of 1998 and the first

quarter of 1999.1

         Platts’s trial commenced on March 17, 2008. The government proffered testimony

from Internal Revenue Service (“IRS”) investigators and corresponding documentary

evidence that Pinnacle had underpaid its withholding taxes in 1998 and 1999, that Platts

(who, by establishing Pinnacle’s inability to pay its back taxes and by virtue of his status

as the company’s sole shareholder, had assumed its tax burden) had under-represented his




     1
   Each of Counts Two through Five charged Platts with attempted tax evasion during a
separate quarter of 1998 or 1999.

                                               2
personal assets, and that Platts had mischaracterized salary from Pinnacle as a loan

repayment from Pinnacle on his 1999 personal income tax forms. The government also

provided testimony from Pinnacle’s bookkeeper, along with corresponding documentary

evidence, that Platts had instructed her to omit his salary for the first quarter of 1999 from

Pinnacle’s tax documentation.

       Platts testified on his own behalf. He contended that he had been unaware that

Pinnacle was delinquent on its withholding taxes until the IRS contacted him and that,

once he learned of the deficiency, he attempted to cooperate fully with investigators. He

also claimed the testimony of Pinnacle’s bookkeeper had not been truthful.

       On March 20, 2008, the jury found Platts guilty on all five counts. He was

sentenced, on June 17, 2008, to concurrent terms of 30 months’ imprisonment. The

District Court entered judgment on June 27, and Platts filed a timely notice of appeal.

II.    Discussion 2

       Platts’s sole argument on appeal is that his conviction is not supported by

sufficient evidence. Because he did not preserve that challenge by making a timely

motion for judgment of acquittal at the close of evidence or by filing a post-trial motion

for acquittal under Fed. R. Crim. P. 29(c), we review the sufficiency of the evidence for

plain error. United States v. Miller, 527 F.3d 54, 62 (3d Cir. 2008). “In conducting plain




  2
   The District Court had jurisdiction over this matter pursuant to 18 U.S.C. § 3231. We
have jurisdiction under 28 U.S.C. § 1291.

                                              3
error review, we ‘view the evidence in the light most favorable to the government and

must sustain a jury’s verdict if a reasonable jury believing the government’s evidence

could find beyond a reasonable doubt that the government proved all the elements of the

offenses.’” United States v. Mornan, 413 F.3d 372, 382 (3d Cir. 2005) (quoting United

States v. Rosario, 118 F.3d 160, 163 (3d Cir. 1997)).

       The elements of attempted tax evasion under 26 U.S.C. § 7201 are: (1) the

existence of a tax deficiency, (2) an affirmative act constituting an attempt to evade or

defeat payment of the tax, and (3) willfulness. United States v. McGill, 964 F.2d 222, 229

(3d Cir. 1992). When subjected to plain error review, the evidence against Platts is

sufficient to establish all three elements on each count.

       Indeed, Platts’s conviction finds ample support in the record. As to Count One,

which charged Platts with personal tax evasion, a reasonable jury could conclude that he

was responsible for a tax deficiency from the combination of his 1999 tax return, which

shows a loan repayment but no salary from Pinnacle and claims a capital loss deduction

based on the loan; the IRS’s examination of Pinnacle’s corporate tax returns from the

1990s, which reflected that Pinnacle had repaid its loan from Platts long before 1999; and

IRS Agent Whitmore’s testimony that, based on the mischaracterized income from

Pinnacle and the unsubstantiated capital loss deduction, Platts’s tax liability for 1999 was

greater than what he paid. A reasonable jury certainly could find an affirmative act and

willfulness, based on the testimony and corresponding emails indicating that Platts



                                              4
recruited Pinnacle’s bookkeeper to make the company’s tax documentation reflect that

Platts did not receive a salary in the first quarter of 1999. See United States v. McKee,

506 F.3d 225, 236-37 (3d Cir. 2007) (citing Swallow v. United States, 307 F.2d 81, 83

(10th Cir. 1962)).

       As to Counts Two through Five, which charged Platts with attempting to evade tax

payments owed by Pinnacle, the government and Platts agreed that a deficiency existed.

Specifically, testimony from both sides established that Pinnacle was deficient in paying

its withholding taxes throughout 1998 and in the first quarter of 1999.3 In response to an

IRS investigation, Platts provided paperwork establishing that Pinnacle was unable to pay

the outstanding balance; thus, the deficiency fell on Platts, who, as the company’s sole

shareholder and president, and pursuant to 26 U.S.C. § 6672, was responsible for the

taxes due. See Quattrone Accountants, Inc. v. IRS, 895 F.2d 921, 927 (3d Cir. 1990)

(“Section 6672 imposes liability on ‘[a]ny person required to collect, truthfully account

for, and pay over’ taxes who willfully fails to do so. ... Thus, under Section 6672, Philip

Quattrone's liability to the IRS is entirely separate and distinct from debtor's liability to

the IRS under Section 6672, even though such potential liability stems from the same

withholding taxes.”). Platts, however, under-represented his assets. At trial, the

government offered testimony from IRS investigators and corresponding documentation




  3
   While the parties disagreed about how much Pinnacle owed, there was no dispute that
a substantial deficiency existed.

                                               5
demonstrating that Platts failed to disclose income from other business ventures, the true

value of his home, and a mortgage receivable that he had obtained, among other assets.

From that evidence, a reasonable jury could conclude that Platts affirmatively and

willfully attempted to evade his tax obligations on Counts Two through Five.

III.   Conclusion

       Because the evidence, viewed in the light most favorable to the government, was

sufficient for a reasonable jury to conclude that Platts is, beyond a reasonable doubt,

guilty of the charged offenses, we will affirm his conviction on all counts of the

indictment.




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