Motion to sever; FedRCrimP 14; Whether a joint trial resulted in prejudice; Whether felony tax evasion within the limitations period was established; 26 USC § 7201; Whether the district court erred when reading the indictment to the jury; Sentencing; Calculation of the tax loss amount; USSG § 2T1.1; Whether the district court sufficiently articulated its findings on the disputed-loss issue; Rule 32(i)(3)(B); Whether the district court failed to address a defendant’s nonfrivolous arguments; “Sophisticated-means” enhancement (§ 2T1.1(b)(2)); Request for a variance; Issuance of an amended judgment; “Clerical” error correction; Rule 36(a)

The court held that the district court properly denied defendant-DiPietro’s motion to sever his trial from that of defendant-Karasarides. Further, he was properly charged and convicted of felony tax evasion, as “the filing of false tax documentation is the sort of affirmative act necessary to a § 7201 conviction[,]” and no agent relationship with a taxpayer is required. The court also rejected defendants’ sentencing and other challenges. Karasarides (referred to as Christos) and DiPietro operated two gambling businesses that depended on laundering cash. During an IRS civil investigation, DiPietro had “represented Christos as his ‘power of attorney.’” They were convicted “of a series of conspiracies and stand-alone tax-related crimes.” As to the district court’s denial of DiPietro’s motion to sever, the court rejected his argument that Christos would have testified for him if they had separate trials, concluding the alleged testimony would not have been “exculpatory.” It also found no merit in his claims of “spillover” prejudice and that certain evidence that was “admissible against Christos would have been inadmissible against him in a solo trial.” The court held that the district court’s instructions to the jury cured any prejudice where it “repeatedly admonished the jury to consider each defendant’s guilt individually.” DiPietro next argued that the district court should have granted his motion to dismiss where the government failed to allege an “affirmative act” of felony tax evasion within the period of limitations. The court rejected his “novel” interpretation of the affirmative act requirement. “The idea that a fiduciary or agent relationship is necessary to commit an affirmative act has no basis in the text, and he’s offered no reason why we should impose one.” The court also did not find error in the district court’s reading of the indictment to the jury. As to sentencing, it rejected Christos’s challenges to the tax loss calculations. While it determined that the district court failed to comply with Rule 32 by not sufficiently articulating its findings on the disputed-loss issue, it held that Christos did not show how this affected his substantial rights, given “the evidence supporting the $3.5 million loss number.” The court also held that DiPietro could not succeed with his claim that the district court failed to address his nonfrivolous arguments where he “never developed substantive arguments on any of the objections he raised in the PSR, either in his sentencing memo or at the hearing.” Further, the court upheld the imposition of the “sophisticated-means” enhancement in sentencing Christos where he “evaded taxes to launder the cash from his highly sophisticated gambling business. The tax evasion was intertwined with the broader scheme.” Affirmed and remanded.