                NOT RECOMMENDED FOR FULL TEXT PUBLICATION
                           File Name: 06a0139n.06
                           Filed: February 21, 2006

                                            No. 05-3250


                           UNITED STATES COURT OF APPEALS
                                FOR THE SIXTH CIRCUIT

UNITED STATES OF AMERICA,

       Plaintiff-Appellee,

v.                                                       ON APPEAL FROM THE UNITED
                                                         STATES DISTRICT COURT FOR THE
SAMUEL E. JOHNSON,                                       NORTHERN DISTRICT OF OHIO

       Defendant-Appellant.

                                                /




BEFORE:        COLE, CLAY and GIBBONS, Circuit Judges.

       CLAY, Circuit Judge. Defendant, Samuel Johnson, appeals his conviction for aiding and

assisting in the preparation of false tax returns in violation of 26 U.S.C. § 7206(2), arguing that the

government’s remarks at trial were improper and constituted reversible error. For the reasons set

forth below, we AFFIRM Defendant’s conviction.

                                                    I.

       Federal & State Corporate Advisors, Inc. (“F&S”) was a business organized for the purpose

of administering job tax credit programs for large corporations. These are federal government

programs that offer corporations incentives to reduce their tax burden. The Work Opportunity Tax

Credit Program (“WOTC”), authorized by the Small Business Job Protection Act of 1996, is one
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such program that enables a large corporation to receive a tax credit for each of its employees who

had a disadvantaged employment history prior to being hired by the corporation.

       On April 25, 1996, Fabrey-Centers of America, operating as Jo-Ann Stores, Inc. (“Jo-Ann

Fabrics”), headquartered in Hudson, Ohio, contracted with F&S to have F&S administer the WOTC

program on its behalf. F&S’s responsibilities included identifying potential employee candidates

for the WOTC program, obtaining written state certifications verifying employees’ eligibility for

the WOTC program, and tabulating monthly WOTC figures. Jo-Ann Fabrics agreed to pay F&S a

fee of 15% of the WOTC tax credits taken by Jo-Ann Fabrics. These commissions were paid by Jo-

Ann Fabrics to F&S on a monthly basis. The contract between F&S and Jo-Ann Fabrics began in

April 1996 and continued until August 1999 when Jo-Ann Fabrics terminated the relationship.

       As a result of fraudulent information provided by F&S, Jo-Ann Fabrics claimed WOTC tax

credits in the amount of $858, 623.00 on its tax return for tax filing year 1997, fiscal year end 1998;

and $1,581,545.00 on the return for tax filing year 1998, fiscal year end 1999. An investigation

initiated by a suspicious Jo-Ann Fabrics revealed the fraud, and Jo-Ann Fabrics eventually corrected

those tax returns by filing amended returns with the IRS and reducing its claimed WOTC credits to

about $100,858 and $175,000, respectively, for the two years in question.

       Defendant was one of several F&S employees who was indicted for his involvement in the

fraudulent tax credit scheme. Defendant was charged in the United States District Court for the

Northern District of Ohio with two counts of aiding and assisting in the preparation of false tax

returns in violation of 26 U.S.C. § 7206(2). Defendant pled not guilty and proceeded to a jury trial.

Six F&S employees testified at Defendant’s trial on behalf of the government, including Brian Eden,



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owner of F&S, and Paul Friedlander, vice-president of F&S, both of whom had previously been

indicted for the WOTC tax credit fraud, and who were already serving sentences for these crimes.

Four other former F&S employees also testified, including Deborah Kiniry and Elizabeth Benavides,

two telephone operators, and Jon Martin and Eugene Rosenfeld, information technology (“IT”)

specialists.

        All of the employees testified about their involvement in the production of false WOTC

statements and implicated themselves, each other, and Defendant in the scheme. Both Friedlander

and Eden testified that Defendant was the vice-president of WOTC, responsible for overseeing the

operators who determined which people were eligible for WOTC credits, processing the paperwork,

and coordinating with the state. Friedlander also testified that Defendant was directly involved in

cutting and pasting names and social security numbers on tax credit certification forms in order to

make “the forms look real.” (J.A. at 70.) According to Friedlander, Defendant also directed his

subordinates to fraudulently prepare the credits.

        The telephone operators also testified that Defendant participated in the fraud, and that

Defendant, as supervisor of the telephone operators, directed the operators to do so as well. One

operator, Kiniry, testified that Defendant would regularly instruct her to duplicate and forge an

individual’s signature on certification forms. Another operator, Benavides, also testified that

Defendant asked her to forge signatures. IT specialist Martin testified that he observed Defendant

asking operators to forge signatures on certification forms.

        Defendant testified on his own behalf and denied any involvement in the false certification

process, but Defendant was convicted of both counts on February 14, 2005, and was sentenced on



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February 16, 2005, to thirty months imprisonment and one year of supervised release. Defendant

filed his timely notice of appeal on February 22, 2005.

                                                  II.

        Whether remarks by a prosecutor amount to prosecutorial misconduct and whether they

render a trial fundamentally unfair are mixed questions of law and fact that are reviewed de novo.

United States v. Francis, 170 F.3d 546, 549 (6th Cir. 1999). We review only for plain error,

however, “[w]here, as here, a criminal defendant has failed to object below.” U.S. v. Emuegbunam,

268 F.3d 377, 406 (6th Cir. 2001). “Plain errors or defects affecting substantial rights may be

noticed although they were not brought to the attention of the court.” Id. (quoting Fed. R. Crim. P.

52(b)). To establish plain error, a defendant must show that: (1) an error occurred in the district

court; (2) the error was obvious or clear; (3) the error affected defendant’s substantial rights; and

(4) this adverse impact seriously affected the fairness, integrity, or public reputation of the judicial

proceedings. United States v. Kingsley, 241 F.3d 828, 835-36 (6th Cir. 2001). The plain error

doctrine mandates reversal in exceptional circumstances and only where the error is so plain that the

trial judge and prosecutor were derelict in countenancing it. United States v. Carroll, 26 F.3d 1380,

1383 (6th Cir. 1994).

                                                  III.

        Defendant claims that the government, during its closing statement, made numerous

improper remarks which deprived him of a fair trial in violation of his due process rights. We

believe, however, that even if some of the alleged remarks were arguably improper, they were not




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flagrant and were unlikely to have affected Defendant’s substantial rights when viewed in the

context of overwhelming evidence of Defendant’s guilt.

        When reviewing claims of prosecutorial misconduct, we must first determine whether the

statements were improper. Carroll, 26 F.3d at 1387; see also United States v. Carter, 236 F.3d 777,

783 (6th Cir. 2001). If they were improper, then we look to see if they were flagrant and warrant

appeal. Carroll, 26 F.3d at 1389-90; Francis, 170 F.3d at 549.

        To determine flagrancy, the standard set by this Court is: 1) whether the statement
        tended to mislead the jury or prejudice the defendant; 2) whether the statements were
        isolated or among a series of improper statements; 3) whether the statements were
        deliberately or accidentally before the jury; and 4) the total strength of the evidence
        against the accused.

 Francis, 170 F.3d at 549-50 (citations omitted).

        We can find no impropriety in most of the statements made by the government during the

closing argument about which Defendant complains. In particular, it was not improper for the

government to make statements regarding the likelihood that Eden, the owner of F&S who was

already indicted and incarcerated, would receive a Rule 35 sentence reduction for testifying against

Defendant. This Court has held with respect to plea agreements that “[t]he prosecutor may elicit

testimony about its terms, attack the credibility of the witness because of it and even refer to the plea

agreement of a government witness in an attempt to deflect defense counsel’s uses of the agreement

to attack the witness’s credibility.” Francis, 170 F.3d at 550 (citing United States v. Monroe, 943

F.2d 1007 (9th Cir. 1991)). “The potential for impropriety emerges, however, when a prosecutor

explains that there is to be a recommendation to the witness’s sentencing court whether the terms

of the plea agreement have been adhered to.” Id.



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       In the present case, the government’s attorney had asked Eden during direct examination

whether or not Eden received any sentencing reduction for testifying, to which Eden replied “no.”

On cross examination, defense counsel sought to challenge this assertion by asking Eden whether

it was his understanding that “even after all that, with no deals on the table, with no promises being

made . . . that the government . . . after your testimony today, can still come before the judge that

sentenced you and say, hey, judge, we think that Mr. Eden should get a reduction in sentence.” (J.A.

at 88.) In response to that question, Eden conceded that he would like to get out of prison. During

its closing, the government attorney rebutted this testimony and sought to affirm Eden’s credibility

as a witness to the jury by stating,

       Do you think for a minute he’s going to get up there now and lie and subject himself
       to a potential perjury charge? For what? Because he hopes to get a Rule 35? That’s
       the sentence reduction. He hopes the government and his sentencing Judge will
       somehow find it in their hearts that he deserves to get a sentence reduction. He said
       himself, yeah, he wants it. Well, I want to win the lottery, but I don’t think that’s
       going to happen any more than anything else around here.

(J.A. at 148-49.) Although the government’s remarks here may have been melodramatic, they were

a permissible response to defense counsel’s attempts to use the potential for a Rule 35 sentence

reduction to attack Eden’s credibility, and were not improper.

       There was also no impropriety in the government’s statement that Defendant was lying to

the jury, assuming there was a reasonable evidentiary basis for the government to make such a

statement. The government told the jury that Defendant was “the only person not admitting what

he did is wrong. He continues to lie, just as he lied to the agents a couple years ago. Now he’s lying

to you.” (J.A. at 147.) If a defendant testifies, a prosecutor may attack his credibility to the same

extent as any other witness. Francis, 170 F.3d at 551. “This court has held that a prosecutor may

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assert that a defendant is lying during her closing argument when emphasizing discrepancies

between the evidence and that defendant’s testimony.” Id. (citing United States v. Veal, 23 F.3d

985, 989 (6th Cir. 1994)). “To avoid improprieties, however, such comments must ‘reflect

reasonable inferences from the evidence adduced at trial.’” Id. (quoting United States v. Goodapple,

958 F.2d 1402, 1409-10 (7th Cir. 1992)) (finding that because the defendant took the stand, it was

not improper for the prosecutor to question his credibility, but it was improper for the prosecutor to

utter personal sentiments in front of the jury with no explanation or indication of evidentiary bases).

“Misconduct occurs when a jury could reasonably believe that the prosecutor was, instead,

expressing a personal opinion as to the witness’s credibility.” Id.

       In the present case, Defendant testified on his own behalf; therefore the government was

permitted to suggest to the jury that Defendant was lying so long as the government referred to

evidentiary bases for this assertion. The record reveals that the government made these comments

regarding Defendant’s truthfulness in reference to extensive comments about witness testimony, in

which all of the former F&S employees who testified admitted that they had been involved in the

fraud, and also all testified that they had either witnessed Defendant engage in alleged illegal

activity, or had been directed to engage in alleged illegal activity by Defendant. Based upon such

testimony and because Defendant testified, the government’s remarks arguably reflect reasonable

inferences from evidence adduced at trial, and it was not improper for the government to suggest that

Defendant was lying.

       We do have some reservations, however, about some of the government’s remarks to the

jury, especially the government’s comment that the decision had been made “to charge only the



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three top people in that company, all of whom were intimately involved or intimately directed this

massive fraud.” (J.A. at 142.) This remark may have come too close to the line of suggesting that

Defendant is guilty merely because he is being prosecuted, and may have constituted improper

vouching in a testimonial way by the government attorney. We have previously found that the

“transgressions of the prosecutor were egregious” where the prosecutor remarked, “[i]f the United

States did not believe the defendant was guilty of committing these charges in the indictment . . .

this case, of course, would never have been presented to you in the first place.” United States v.

Bess, 593 F.2d 749, 754-55 (6th Cir. 1979).

       In the case before us, the government’s statement about having charged only the three top

people in the company may have been appropriate in order to present the jury with the government’s

explanation as to why all the employees who were implicated in the fraudulent activities were not

also indicted. On the other hand, however, we believe that the government could have made its

point without referencing the fact that Defendant and the other managers were specifically charged

because they were “intimately involved in the fraud.” Regardless of whether this statement was

improper, however, we would still find, on plain error review, that the remark was not flagrant or

repetitive and did not violate Defendant’s substantial rights, in light of the overwhelming evidence

of Defendant’s guilt which was presented to the jury. See Carroll, 26 F.3d at 1383.

       We are similarly troubled by the potential impropriety of the government’s reference to the

fact that there were tax frauds involving other clients, and the statement, “Imagine what might have

happened with the other clients.” (J.A. at 146.) Even though Eden testified hat he had been indicted

in Pennsylvania for a fraud involving Rite Aid, there was no evidence presented at trial that



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Defendant was involved in tax frauds involving Rite Aid or any other clients. The only allegations

against Defendant in this trial were those involving Jo-Ann Fabrics, so it may have been somewhat

improper for the government to make the comment. Again, however, on plain error review where

Defendant failed to object below, we do not find that this remark was flagrant or that it affected

Defendant’s substantial rights.

                                               IV.

       In conclusion, we find that the government’s remarks during closing arguments did not

constitute reversible error that affected Defendant’s substantial rights, and we therefore AFFIRM

Defendant’s conviction.




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