United States Court of Appeals, District of Columbia Circuit
February 3, 2017
from the United States District Court for the District of
Columbia Nos. 1:14-cr-00037-1, 1:14-cr-00037-2
B. Wright, Assistant Federal Public Defender, argued the
cause for appellant Andre Davis.
H. Kurland, appointed by the court, argued the cause for
appellant Sherri Davis. With them on the briefs were A.J.
Kramer, Federal Public Defender, and Beverly G. Dyer,
Assistant Federal Public Defender.
Axam Jr. and David W. Bos, Assistant Federal Public
Defenders, entered appearances.
Alexander P. Robbins, Attorney, U.S. Department of Justice,
argued the cause for appellee. With him on the brief was
Gregory Victor Davis, Attorney. Frank P. Cihlar, Attorney,
entered an appearance.
Before: Rogers and Srinivasan, Circuit Judges, and Ginsburg,
Senior Circuit Judge.
Rogers, Circuit Judge.
Davis and her son, Andre Davis, appeal from their convictions
of conspiracy to commit tax fraud and related offenses.
Sherri owned a tax preparation business, which the Internal
Revenue Service determined was filing returns that falsely
reported charitable and business deductions. A key government
witness, LaDonna Davis, who was Sherri's niece and
employee, described at trial how the business operated
generally, and specifically how Sherri had taught her to
prepare false returns. Andre worked with his mother later on.
Both Sherri and Andre challenge their convictions on the
grounds of prosecutorial misconduct during closing arguments
to the jury and various evidentiary errors by the district
court. Andre also contends that there was insufficient
evidence to demonstrate his guilt beyond a reasonable doubt
and suggests that the verdict against him on two counts is
explained, among other reasons, by the government's
mischaracterizations of the evidence during closing
arguments. Upon consideration of the weakness of the evidence
offered against Andre and its centrality to the issue of his
mens rea, we conclude that the prosecutor's
blatant misstatements of key evidence during closing
arguments, in the absence of any steps to mitigate the
resulting prejudice, require reversal of Andre's
convictions. Further, we conclude that the evidence against
Andre was insufficient and consequently he is not subject to
retrial. Finally, finding no such prejudice from the closing
arguments as to Sherri, and concluding her evidentiary
challenges are unpersuasive, we affirm Sherri's
convictions but remand her case for resentencing and for
consideration of her claims of ineffective assistance of
2003, Sherri Davis registered 2FT Fast Facts Tax Service with
the Internal Revenue Service ("IRS"). 2FT was a tax
preparation business aimed at recovering its clients' tax
withholdings and maximizing their tax refunds. Sherri's
niece, LaDonna Davis, began working for 2FT in 2006, first
doing clerical work but later preparing and filing tax
returns herself. LaDonna would work during the day and into
the evenings, and Sherri, who was a public school teacher,
would join her once the school day ended and sometimes work
on returns until midnight. 2FT also employed other
individuals to help around the office, but only Sherri and
LaDonna prepared tax returns. Clients were charged between
$99 and $500 for each return, often taken as a deduction from
the client's refund without the client knowing the
specific amount. During tax season, 2FT would prepare twenty
to thirty returns a day, seven days a week. Fees, annually
totaling hundreds of thousands of dollars, were deposited in
Sherri's bank account; employees were paid in cash.
investigation of 2FT led to an interview with Sherri about
the responsibilities of tax preparers. Subsequent undercover
investigations in 2010 and 2011 captured LaDonna on videotape
preparing false returns for undercover IRS agents. In April
2011, the IRS executed a search warrant for 2FT's
business location at 1841 Burke Street, SE, Washington, DC,
where Sherri and LaDonna also lived, and seized computers and
files. At the time, IRS agents also interviewed LaDonna and
she agreed to cooperate with their investigation. In October
2011, LaDonna entered into a plea agreement admitting
conspiring to defraud the United States of more than $14
million. She pled guilty to conspiracy to defraud the United
States, in violation of 18 U.S.C. §§ 2, 371, and
aiding and abetting first degree theft, in violation of D.C.
Code §§ 22-3211, 22-3212, 22-1805. That same month,
the IRS expelled Sherri from its electronic filing program
and suspended 2FT's electronic filing numbers
("EFINs"). Sherri continued her tax preparation
business under a new name, Davis Financial Services. Instead
of identifying Sherri as owner, however, Davis Financial
Services' February 2012 IRS EFIN application listed Andre
as the principal and the primary contact.
was indicted for federal tax violations two years later, in
February 2014. A superseding indictment filed in July 2014
named Sherri and Andre as defendants and LaDonna as an
unindicted co-conspirator. Count 1 charged Sherri and Andre
with conspiracy to defraud the United States by preparing and
filing fraudulent and false individual income tax returns, in
violation of 18 U.S.C. §§ 2, 371. Counts 2 through
33 charged Sherri with willfully aiding and assisting in the
preparation of false returns, in violation of 26 U.S.C.
§ 7206(2); Andre was charged with the same violation in
Counts 6, 15, 19, and 22. Counts 34 through 36 charged Sherri
with filing false individual returns, in violation of 26
U.S.C. § 7206(1) and 18 U.S.C. § 2. The district
court granted the government's pretrial motion to dismiss
Counts 2 through 6.
trial, eleven of Sherri's clients testified. According to
all t[old] essentially the same story: each worked for an
employer that withheld federal income taxes from the wages it
paid, each went to Sherri's house between 2007 and 2013
to file a tax return for the prior year, and each (with a
single exception) used Sherri to prepare returns for multiple
tax years. Most of the clients specifically identified Sherri
as either the only person who prepared their returns or one
of two people who prepared them. All of the returns reported
huge false deductions . . . .
Appellee Br. 11 (footnote omitted).
was the government's star witness. She had come to live
with Sherri when she was sixteen years old. She testified
that Sherri taught her how to prepare tax returns, which
primarily meant getting clients back what was withheld from
their paychecks, usually by inventing or exaggerating
charitable deductions and business losses and expenses. She
described in some detail how Sherri operated her tax
preparation business. For example, Sherri had instructed her
to assign values for charitable donations up to several
thousands of dollars on blank receipts provided either by 2FT
or the clients. Eventually, LaDonna testified, "it all
became like a routine" and she began filling in
charitable deductions without even asking clients if they had
receipts. Trial Tr. 95 (Jan. 20, 2015 (pm)).
also testified that Sherri would sometimes come in and finish
returns when LaDonna had been logged into the e-filing
system, so returns completed by Sherri "would come in
under my name" - that is, returns finished by Sherri
listed LaDonna as the preparer. Id. at 92. As
another example of how Sherri operated, LaDonna recounted how
she had prepared a return showing a client owed money and,
after the client became upset, Sherri made changes to the
return, "put[ting] some stuff in, " so that the
client would no longer owe anything. Id. at 18.
Subsequently a number of clients were audited after LaDonna
misinterpreted Sherri's instructions and included the
total mileage, not the annual mileage, on vehicles owned by
clients as part of their business deduction calculation.
Sherri told LaDonna to stop reporting total mileage and
introduced the clients to a woman who could create fake
mileage logs for them to provide to the auditors.
testified at trial that once she had learned about the audits
and that an IRS representative had spoken with Sherri, she
began to suspect something was wrong and stopped filing
"Schedule C" forms showing business profits and
losses. Her concerns were heightened, she claimed, when IRS
agents executed the search warrant in April 2011. At the
time, LaDonna telephoned Sherri, who was in Las Vegas, to
alert her to what was happening, and Sherri told her to tell
the agents that she had learned how to prepare tax returns on
her own and to "go get [her]self committed so that [the
agents] would think that [she] was crazy." Trial Tr. 12
(Jan. 20, 2015 (pm)). LaDonna did not take Sherri's
advice and relations between the two women became strained.
(On cross examination, LaDonna conceded that she never told
the IRS agents during their interviews of her that Sherri had
told her to say something that she knew was untrue.) LaDonna
testified that they subsequently had "a falling
out" because she kept asking Sherri if anything was
wrong and, while Sherri kept trying to reassure her that
nothing was wrong she also wanted LaDonna "to lie about
the fact that she . . . [had] taught [LaDonna] how to do
taxes." Trial Tr. 69 (Jan. 20, 2015 (pm)). LaDonna
stopped working for 2FT and moved out of 1841 Burke Street,
SE; Sherri continued preparing tax returns, telling LaDonna
"no one told her that she had to stop."
Id. at 14.
Andre, LaDonna testified that he would come home during his
spring and summer breaks from Lincoln University in
Pennsylvania, but that he was neither an employee of 2FT nor
prepared tax returns. Sometime after the search warrant was
executed in April 2011, however, LaDonna learned Andre was
planning to help Sherri prepare tax returns after his
graduation. She told him not to get involved in view of
"everything else that was going on, " and Andre
responded that the investigation "wasn't a big deal,
and that it was just going to go away." Id.