                            NOT FOR PUBLICATION

                     UNITED STATES COURT OF APPEALS                          FILED
                            FOR THE NINTH CIRCUIT                             JUN 17 2014

                                                                          MOLLY C. DWYER, CLERK
                                                                           U.S. COURT OF APPEALS

UNITED STATES OF AMERICA,                       No. 13-50103

               Plaintiff - Appellee,            D.C. No. 2:11-cr-00955-GAF-1

          v.
                                                MEMORANDUM*
STEVEN MARK PYBRUM,

               Defendant - Appellant.

                    Appeal from the United States District Court
                       for the Central District of California
                     Gary A. Feess, District Judge, Presiding

                        Argued and Submitted May 13, 2014
                               Pasadena, California

Before: WARDLAW and FISHER, Circuit Judges, and DAWSON, District
        Judge.**

      Steven Pybrum appeals his jury conviction and sentence on four counts of

willfully subscribing to false income tax returns under 26 U.S.C. § 7206(1). We

affirm.


           *
        This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
          **
         The Honorable Kent J. Dawson, United States District Judge for the
District of Nevada, sitting by designation.
      1. Sufficient evidence supported Pybrum’s convictions for willfully

subscribing, under penalty of perjury, four IRS Form 1040s that he knew were

materially false as to the gross receipts from his accounting practice, his royalty

income, and his income from the Foundation for Harmony and Happiness (FFHH).

See United States v. Boulware, 384 F.3d 794, 810-12 (9th Cir. 2004). Considering

the evidence in the light most favorable to the prosecution, a rational jury could

find that Pybrum’s accounting business remained materially unchanged both

before and after the formation of FFHH, and that, as a trained CPA, Pybrum knew

he had to report gross receipts from his accounting business on his Schedule C but

failed to do so. See United States v. Stone, 770 F.2d 842, 845 (9th Cir. 1985) (“[A

defendant’s] consistent pattern of unreporting . . . income is sufficient to infer

willfulness.”); United States v. Marabelles, 724 F.2d 1374, 1379 (9th Cir. 1984)

(“[W]illfulness may be inferred by the trier of fact from all the facts and

circumstances of the attempted understatement of tax”). Moreover, a rational jury

could find that Pybrum willfully failed to report expenditures that FFHH made on

his behalf as income on his Form 1040, and that, of the income Pybrum did report,

he willfully and falsely characterized nearly all of this income as “royalty” income.

      2. The district court’s “assignment of income” instruction was not

erroneous. See United States v. Garcia-Rivera, 353 F.3d 788, 791-92 (9th Cir.


                                           2
2003). The instruction did not impermissibly presuppose that Pybrum assigned

any income nor did it misstate the law. Rather, it described the legal principles that

would apply if the jury found that the evidence supported the government’s theory.

By its terms, the instruction applied only to “[a] person engaged as a sole

proprietor in a business or profession.” The following instruction accurately stated

how a nonprofit like FFHH was required to report receipts generated by its

activities, consonant with Pybrum’s defense theory. The assignment of income

instruction did not relieve the government of the need to prove willfulness beyond

a reasonable doubt, because it did not rest on a debatable proposition of tax law,

see Lucas v. Earl, 281 U.S. 111 (1930), and the instructions as a whole confirmed

the government’s burden, see Garcia-Rivera, 353 F.3d at 792. Pybrum’s

remaining contentions of instructional error are without merit.

      3. The district court did not abuse its discretion by admitting evidence of (1)

alleged false statements Pybrum made during an interview with an IRS agent; (2)

individuals whose names were used in FFHH’s incorporation documents; and (3) a

car loan application. Pybrum made his lack of intent to violate the tax laws a

centerpiece of his defense, and FFHH played a central role in the alleged illegal

scheme. The admitted evidence, which “came in the course of the conduct with

which [Pybrum] was charged,” was “probative of his consciousness that his


                                          3
conduct was illegal.” United States v. Ramirez-Jiminez, 967 F.2d 1321, 1327 (9th

Cir. 1992). The statements in the loan application were directly relevant to proving

that Pybrum was receiving income from his accounting business even after the

formation of FFHH.

      4. Pybrum waived any argument that the prosecution was time-barred by

failing to raise it below. See United States v. Lo, 231 F.3d 471, 480-81 (9th Cir.

2000). Even if the argument were preserved, the supplemented record on appeal

demonstrates that the statute of limitations was tolled by mutual agreement of the

parties, making the prosecution timely.

      5. Pybrum did not specifically move to compel the production of the grand

jury transcripts in the district court, but even if he had preserved his request, any

nonstructural error in the grand jury proceedings (like that alleged here) was

rendered harmless by the petit jury’s guilty verdicts at trial. See United States v.

Navarro, 608 F.3d 529, 539-40 (9th Cir. 2010). The district court did not abuse its

discretion by denying Pybrum’s request for the Special Agent’s Report (SAR),

because Pybrum failed to demonstrate why it was discoverable material. See

United States v. Williams, 547 F.3d 1187, 1202 (9th Cir. 2008). He also fails to

demonstrate why the production of the SAR “would have created a ‘reasonable

probability of a different result,’” particularly when he already had in his


                                           4
possession all of the exhibits that constituted the factual information in the report.

United States v. Jernigan, 492 F.3d 1050, 1053 (9th Cir. 2007) (quoting Kyles v.

Whitley, 514 U.S. 419, 434 (1995)).

      6. The district court did not violate Pybrum’s rights under the Confrontation

Clause by restricting the scope of his cross-examination of Agent Wing for bias.

See United States v. Larson, 495 F.3d 1094, 1100-03 (9th Cir. 2007). Wing’s

purportedly inflated calculation of Pybrum’s tax liability and awareness of

Pybrum’s success in challenging prior IRS civil audits was of limited relevance for

demonstrating whether Wing harbored bias, risked confusing the jury and “in no

way went to the heart of why [Wing] was testifying or whether he was lying.”

United States v. Hayat, 710 F.3d 875, 898 (9th Cir. 2013). Defense counsel was

afforded ample opportunity to probe Wing’s propensity for bias through cross-

examination on a host of other subjects.

      7. Pybrum’s challenges to his sentence are without merit. First,

enhancement of Pybrum’s sentence for obstructing justice was not erroneous, see

U.S. Sentencing Guidelines Manual (U.S.S.G.) § 3C1.1, because the district court

explicitly found that Pybrum willfully made false statements to Agent Wing that

had a material impact on Wing’s investigation of FFHH. Although the civil IRS

audit took place before a criminal investigation had begun, “obstruction during an


                                           5
IRS audit justifies enhancing a defendant’s sentence for obstruction ‘during the

course of the investigation.’” United States v. Yip, 592 F.3d 1035, 1042 (9th Cir.

2010) (quoting U.S.S.G. § 3C1.1 (2001)).

      Second, the district court did not plainly err in finding that Pybrum’s use of

FFHH to funnel funds was a sophisticated means of hiding assets and transactions

in a nonprofit shell. U.S.S.G. § 2T1.1(b)(2); see United States v. Jennings, 711

F.3d 1144, 1147-48 (9th Cir. 2013). Relatedly, because Pybrum used his

accounting skills to create FFHH and manipulate his own tax reporting “in a

manner that significantly facilitated the commission or concealment of the

offense,” U.S.S.G. § 3B1.3 & cmt. n.4, the special skill enhancement was

appropriate.

      Third, applying both the sophisticated means and special skill enhancements

to account for similar behavior did not amount to impermissible double counting,

because “each invocation of the behavior serves a unique purpose under the

Guidelines.” United States v. Holt, 510 F.3d 1007, 1011 (9th Cir. 2007) (quotation

omitted); see United States v. Thornton, 511 F.3d 1221, 1227-28 (9th Cir. 2008)

(applying this standard). The special skills enhancement recognizes that persons

who use “their special skills to facilitate significantly the commission or

concealment of a crime . . . generally are viewed as more culpable.” U.S.S.G.


                                          6
§ 3B1.3 cmt. background. The sophisticated means enhancement, in contrast,

addresses “unusually sophisticated efforts” that “decrease the likelihood of

detection and therefore warrant an additional sanction for deterrence purposes.”

U.S.S.G. § 2T1.1 cmt. background. The district court reasonably found that

Pybrum’s conduct fell within the scope of both enhancements.

      AFFIRMED.




                                         7
