United States v. William Beavers

In the

United States Court of Appeals

For the Seventh Circuit

____________________

No. 13-3198

UNITED STATES OF AMERICA,

Plaintiff-Appellee,

v.

WILLIAM BEAVERS,

Defendant-Appellant.

____________________

Appeal from the United States District Court for the

Northern District of Illinois, Eastern Division.

No. 12 CR 124 — James B. Zagel, Judge.

____________________

ARGUED APRIL 3, 2014 — DECIDED JUNE 30, 2014

____________________

Before POSNER, FLAUM, and ROVNER, Circuit Judges.

FLAUM, Circuit Judge. William Beavers, a former Chicago

alderman and Cook County Commissioner, was convicted of

multiple counts of tax fraud. He appeals his conviction on

several grounds. Beavers challenges many of the district

court’s evidentiary rulings and jury instructions, and he also

contends that his right to a jury composed of a fair cross-

section of the community was violated. We affirm.

2 No. 13-3198

I. Background

William Beavers was a Chicago alderman from 1983 until

November 2006. In December 2006, he began serving as a

Cook County Commissioner. Beavers had three political

campaign committees: Citizens for Beavers, Friends of Wil-

liam Beavers, and the 7th Ward Democratic Organization.

He was the chairman of each campaign committee as well as

the only authorized signor for each committee’s bank ac-

count. There is no dispute that Beavers’ federal tax returns

from 2005 to 2008 exhibited various inaccuracies; the parties

disagree, however, as to whether these inaccuracies were

honest mistakes or deliberate misrepresentations.

The first inaccuracy was Beavers’ underreporting of his

2005 income. Each of Beavers’ campaign committees was re-

quired to file semi-annual disclosure reports (called “D-2s”)

listing its expenditures. In its D-2 for the first half of 2005,

Citizens for Beavers reported a payment of $56,149 to Bea-

vers. This payment was legal under Illinois law. However,

Beavers had given his tax preparer a letter, addressed to the

IRS and signed by Beavers, stating that he had received only

$43,000 in campaign funds from Citizens for Beavers. Thus,

Beavers’ tax return listed $43,000—rather than $56,149—as

“additional income.”

The second inaccuracy concerned Beavers’ undeclared

use of campaign funds to increase his pension annuity.

Shortly before Beavers left his position as a Chicago alder-

man in November 2006, the Municipal Employees Annuity

and Benefit Fund of Chicago informed Beavers about his op-

tions for his aldermanic pension. To take advantage of the

option that maximized his pension benefits, Beavers provid-

ed the Annuity Fund with a check for $68,763, which was

No. 13-3198 3

drawn on the account of Citizens for Beavers. Beavers did

not report the $68,763 as income on his tax return for 2006,

nor did Citizens for Beavers report the expenditure on its

D-2s for 2006, 2007, or 2008. Additionally, when Beavers lat-

er applied to a bank for a personal loan, his financial state-

ments did not include the $68,763 as an outstanding loan

from his campaign. From the time he took the funds in No-

vember 2006 until April 2009, Beavers did not repay any of

the $68,763 to his campaign.

The third inaccuracy concerned the monthly stipends

that Beavers took as a Cook County Commissioner. Cook

County paid its Commissioners not only an annual salary,

but also a monthly stipend of $1,200 from the Cook County

Contingency Account. Beavers cashed (or deposited in his

personal bank account) every monthly check from December

2006 through November 2008. Beavers informed the County

(through forms that he submitted) that he would claim these

$1,200 stipends as income. However, he did not report these

monthly checks on his tax returns for 2006, 2007, or 2008.

The fourth problem was that, between 2006 and 2008,

Beavers wrote himself 100 checks totaling $226,300 from his

three campaign-committee accounts. At trial, the govern-

ment demonstrated that Beavers often wrote these checks in

order to finance his gambling trips to the Horseshoe Casino

in Hammond, Indiana. Beavers cashed 93 of the 100 checks

the day before, the day of, or the day after he used his “play-

er’s card” at the Horseshoe. An IRS agent who examined

these checks and the campaigns’ bank accounts testified that

Beavers often repaid his campaigns in some amount, but he

never repaid the full $226,300. The agent further testified

4 No. 13-3198

that there were no loan agreements or formal documentation

for any of these “advances.”

The fifth problem concerned Beavers’ efforts to obstruct

the IRS. The government says that the fact that Beavers

“made the 100 campaign checks payable to himself made it

more difficult to determine what he did with the proceeds.”

Beavers’ campaign-committees’ records said nothing of

gambling or personal use. Indeed, some check stubs had no

explanation of the check’s purpose, while others indicated

that checks were used for campaign-related expenses even

though the timing suggested that they were used to fund

Beavers’ gambling. Beavers and his campaign committees

did not document when he repaid the funds.

In April 2009, federal agents approached Beavers and

said they wanted to interview him in connection with a

grand jury investigation into his unreported conversion of

campaign funds for personal use. Beavers then took several

corrective actions. One week after agents contacted him, he

filed amended tax returns for 2007 and 2008. He reported

nearly $20,000 in additional income for each year, explaining

that “[c]ampaign funds deemed reportable was [sic] inad-

vertently omitted from the original return.” The following

month, Beavers wrote a $68,000 check—drawn on the ac-

count of one of his campaign funds, Friends for Beavers—to

repay another campaign fund, Citizens for Beavers. (He later

wrote several checks from his personal account in an effort

to repay Friends for Beavers.) In fall 2010, the media report-

ed that a grand jury had issued a subpoena for Cook County

records about Beavers and the contingency-fund stipends.

Later, in April 2011, Beavers filed a second amended tax re-

turn for 2008 in which he reported an additional $11,000 in

No. 13-3198 5

income. This newly amended return included the explana-

tion that “[a]dvances for expenses by the employer were not

included on the W2 and were not accounted for on the origi-

nal return.”

In 2012, the government charged Beavers with three

counts of violating 26 U.S.C. § 7206(1), which prohibits wil-

fully making a material false statement on a tax return, and

with one count of violating 26 U.S.C. § 7212(a), which pro-

hibits corruptly obstructing the IRS in its administration of

the tax laws. The jury convicted Beavers on all counts. Bea-

vers was sentenced to six months’ imprisonment and was

ordered to pay about $31,000 in restitution and a $10,000 fi-

ne. He appeals.

II. Discussion

A. Evidentiary rulings

Beavers raises several evidentiary challenges. He also ar-

gues that the district court’s rulings violated his constitu-

tional right to present a meaningful defense and impermis-

sibly burdened his right against self-incrimination. We typi-

cally review evidentiary rulings for an abuse of discretion,

but we review de novo whether an evidentiary ruling violat-

ed Beavers’ constitutional rights. United States v. Alayeto, 628

F.3d 917, 920–21 (7th Cir. 2010).

i. The evidence of Beavers’ remedial actions

Beavers first argues that the district court erred by ex-

cluding evidence of his conduct after federal agents ap-

proached him—namely his amended tax returns and pay-

ments to reimburse his campaign committees. The govern-

ment moved in limine to exclude all of this evidence. Rely-

ing on Federal Rules of Evidence 401 and 403, the govern-

6 No. 13-3198

ment argued that Beavers’ actions were not probative of his

state of mind at the time he filed the original returns, and

that the jury would be confused by the admission of evi-

dence of remedial actions. Beavers, on the other hand, ar-

gued that such evidence was probative of his good faith and

lack of intent to file fraudulent returns in the first place. He

also said that the fact that he repaid (with campaign funds)

the $68,763 that he used to increase his pension shows that

he considered the amount a loan, rather than income.

The district court ruled that the evidence would be ad-

missible if Beavers could establish that each remedial action

was relevant to his state of mind at the time he filed the orig-

inal tax returns. Beavers ultimately elected not to testify, and

he did not otherwise succeed in establishing the required ev-

identiary foundation. Thus, the evidence of his remedial ac-

tions was not presented at trial. Beavers argues that (1) the

evidence of his remedial actions was relevant under Rule

401; (2) the district court’s conditional admission impermis-

sibly burdened Beavers’ Fifth Amendment right against self-

incrimination; and (3) the court’s rulings deprived him of his

constitutional right to present a meaningful defense.

First, the district court conditioned the admission of evi-

dence of Beavers’ corrective actions upon a showing that

these actions had a connection to Beavers’ state of mind at

the time he filed his incorrect returns. The logic of the ruling

was that, in the absence of a foundation establishing this

link, the amended tax returns (and evidence of other reme-

dial actions) did not make it more likely that Beavers be-

lieved his original returns were accurate when he filed them.

District judges making relevancy determinations in this

type of situation should proceed on a case-by-case basis. Cf.

No. 13-3198 7

United States v. Tishberg, 854 F.2d 1070, 1073 (7th Cir. 1988)

(reasoning, in the sufficiency context, that the defendant’s

amended return “may demonstrate a good faith effort to

correct his previous mistakes,” but also noting that the re-

turn “does not negate the import of his previous action”).

Nevertheless, courts have repeatedly affirmed the exclusion

of evidence of remedial action taken after the taxpayer

knows he is under investigation. See United States v. McClain,

934 F.2d 822, 834–35 (7th Cir. 1991) (finding “no reason” to

disturb the district court’s ruling that defendant’s 1985 tax

return was not probative of his state of mind at the time he

filed his 1984 return, given his indictment in the intervening

year); United States v. Radtke, 415 F.3d 826, 840–41 (8th Cir.

2005); United States v. Ross, 626 F.2d 77, 81 (9th Cir. 1980); Post

v. United States, 407 F.2d 319, 325 (D.C. Cir. 1968); United

States v. Stoehr, 196 F.2d 276, 282 (3d Cir. 1952); see also United

States v. Philpot, 733 F.3d 734, 748 (7th Cir. 2013) (explaining,

in political corruption case, that defendant’s remedial “ac-

tions after his bonuses were reported in the press shed little

or no light on his state of mind two years earlier” when he

received those bonuses). A common thread in many of these

cases is that subsequent remedial actions may not be proba-

tive of the defendant’s prior state of mind because such ac-

tions are equally consistent with (1) promptly correcting a

genuine mistake and (2) trying to cover up a purposeful lie

in the hope of avoiding prosecution. Cf. Fed. R. Evid. 407

(barring evidence of subsequent remedial action to prove an

admission of fault).

In any event, the district court did not exclude the evi-

dence entirely—it simply conditioned the evidence’s admis-

sion on some kind of showing of its relevance to Beavers’

state of mind at the time he filed his original returns several

8 No. 13-3198

years earlier. Beavers did not make this showing. In fact, his

theory of defense is at odds with his argument that the re-

medial evidence was relevant. Beavers’ argument in defense

(which he maintains on appeal) was that all of the transfers

from his campaign committees were loans, not income.

Thus, evidence that Beavers declared some of the campaign-

fund transfers as income on his amended tax returns after he

was under investigation has little bearing on whether he

considered the transfers to be loans at the time he took the

funds. In sum, the district court’s sensible approach to the

remedial evidence was within its discretion.

Beavers next argues that the district court’s handling of

this issue impermissibly burdened his Fifth Amendment

right against self-incrimination, see generally Griffin v. Califor-

nia, 380 U.S. 609 (1965), because it forced him either to testify

(in order to lay the appropriate foundation) or to forgo the

opportunity to get evidence before the jury. Beavers’ argu-

ment misunderstands the nature of this right, however.

Criminal defendants often face difficult choices in weighing

the costs and benefits of testifying. And the rules of evidence

sometimes prevent defendants from getting their story—or

evidence of their state of mind—before the jury in the par-

ticular manner they would prefer. Cf. U.S. ex rel. Harris v. Illi-

nois, 457 F.2d 191, 197–98 (7th Cir. 1972) (“The State presently

contends, and we agree, that a defendant in a criminal trial

may not introduce evidence in his defense without laying a

proper foundation therefor.”). For instance, the general rule

against hearsay, see Fed. R. Evid. 802, would typically pre-

vent a defendant from calling a friend to the stand to relay

an exculpatory statement the defendant said to her, in lieu of

the defendant testifying himself. Thus, the rule against hear-

say may burden the defendant’s right to testify in the same

No. 13-3198 9

way Beavers argues that his right was burdened here, since

it puts him to the choice of taking the stand (and exposing

himself to potentially damaging cross-examination) or losing

the chance to get evidence before the jury. That sort of bur-

den is not impermissible, however; it is simply part of a larger

system in which “[t]he accused does not have an unfettered

right to offer testimony that is … inadmissible under stand-

ard rules of evidence.” Taylor v. Illinois, 484 U.S. 400, 410

(1988). We see no meaningful difference between the hearsay

situation and the burden Beavers faced here—both burdens

are ordinary, well-established, and permissible. Indeed, we

have previously approved the exclusion of purported state-

of-mind evidence offered by a defendant where the defend-

ant could have, but did not, supply the requisite foundation

of relevance through his own testimony. See United States v.

Scott, 660 F.2d 1145, 1165–67 (7th Cir. 1981). Accordingly, we

reject Beavers’ argument on this score.

ii. Evidence of Cook County’s alleged obligation to

report the $1,200 monthly stipends on Beavers’

W-2s

Beavers next argues that the district court improperly ex-

cluded evidence about Cook County’s alleged mistakes on

Beavers’ W-2s. Recall that, when Beavers was a Cook County

Commissioner, the county paid him not only a salary but al-

so a monthly stipend of $1,200. Beavers cashed or deposited

in his personal bank account every monthly check from De-

cember 2006 through November 2008. He informed the

county that he would claim these stipends as income, but he

did not report the $1,200 monthly stipends as income on his

2006, 2007, or 2008 tax returns. The county also did not in-

clude Beavers’ monthly stipends in Beavers’ W-2s.

10 No. 13-3198

Beavers’ tax expert, Barry Gershinzon, was prepared to

testify that in his opinion, the county should have known

that Beavers was taking these stipend payments as income

and should therefore have included these payments as in-

come on Beavers’ W-2s. As with the evidence of Beavers’ cor-

rective actions, the district court ruled that the evidence of

the county’s supposed obligation with respect to these sti-

pends was relevant (and thus admissible) only upon a show-

ing that Beavers knew of that obligation at the time he com-

pleted his tax returns and relied on his W-2s as an accurate

statement of his income. Beavers contends that, just as the

government was allowed to introduce circumstantial evi-

dence of his intent to lie to the IRS, so too should he have

been able to offer circumstantial evidence that his failure to

include these stipends on his tax returns was simply a mis-

take.

Beavers’ argument is unconvincing. In an ordinary case,

it may well be that an individual can reasonably rely on a

W-2 from his employer as an accurate statement of his in-

come. In this case, however, the government explained at

oral argument—and Beavers did not dispute—that Beavers

received his 2007 and 2008 W-2s from the county before he

advised the county each year that he would take the $1,200

monthly stipends as income. This timeline strongly suggests

that Beavers could not have reasonably relied on a document

that he knew understated his income. (And even putting the

timeline aside, it is reasonable for a district court to rule that

a defendant in an “intent” case should not be able to take

advantage of a fact that helps his case if the defendant did

not actually know of the fact at the relevant time. See, e.g.,

United States v. Harris, 942 F.2d 1125, 1132 n.6 (7th Cir. 1991)

(noting that testimony on the ambiguity of tax law on which

No. 13-3198 11

defendant did not actually rely would be irrelevant if the de-

fendant’s subjective belief were at issue).) Nonetheless, here

too the court did not exclude this evidence, but instead con-

ditioned its admission upon a showing of its relevance to

Beavers’ knowledge and reliance. This ruling was well with-

in the court’s “considerable discretion.” United States v. Mar-

shall, 75 F.3d 1097, 1109 (7th Cir. 1996) (citation omitted).

iii. Right to present a meaningful defense

Finally, Beavers contends that the district court’s eviden-

tiary rulings deprived him of his constitutional right to pre-

sent a meaningful defense. “Whether rooted directly in the

Due Process Clause of the Fourteenth Amendment or in the

Compulsory Process or Confrontation clauses of the Sixth

Amendment, the Constitution guarantees criminal defend-

ants a meaningful opportunity to present a complete de-

fense.” Crane v. Kentucky, 476 U.S. 683, 690 (1986) (citations

and internal quotation marks omitted)). But while the Con-

stitution “prohibits the exclusion of defense evidence under

rules that serve no legitimate purpose or that are dispropor-

tionate to the ends that they are asserted to promote,”

Holmes v. S. Carolina, 547 U.S. 319, 326 (2006), the Constitu-

tion does not require the admission of irrelevant evidence

(or other types of evidence whose relevance is outweighed

by other important considerations), see Crane, 476 U.S. at

689–90; Delaware v. Van Arsdall, 475 U.S. 673, 679 (1986). As

established above, the district court’s repeated invocation of

the relevance rule was reasonable and amply supported by

precedent. We therefore find no infringement of Beavers’

right to present a meaningful defense.

12 No. 13-3198

B. The district court’s handling of Beavers’ tax expert

Beavers next argues that the district court erred in multi-

ple respects in its handling of his tax expert (and sole wit-

ness), Barry Gershinzon. First, Beavers contends that the

court permitted the government to conduct an overly exten-

sive voir dire of Gershinzon, when the court should have ac-

cepted Beavers’ written disclosure as sufficient. Second, Bea-

vers argues that the court improperly limited Gershinzon’s

testimony—most importantly, his opinion as to whether the

checks from Beavers’ campaign fund were loans—because

the court determined that Gershinzon was unreliable. Third,

Beavers maintains that the court erred by instructing the jury

to partly disregard Gershinzon’s opinion. We review the dis-

trict court’s actions for an abuse of discretion. See United

States v. Lee, 502 F.3d 691, 698 (7th Cir. 2007); United States v.

Koopmans, 757 F.2d 901, 906 (7th Cir. 1985).

i. Background

We will provide more detailed information below, but a

brief summary of the overall proceedings may be useful. Be-

fore trial, the defense repeatedly provided insufficiently de-

tailed summaries of Gershinzon’s opinions as well as the ba-

ses for his views. These summaries provided lists of general

topics and noted that the defense tax expert would opine

that Beavers complied with the tax code, but did not disclose

further required information. These insufficient disclosures

led the court to allow the government to conduct a voir dire

examination of Gershinzon. In the voir dire, Gershinzon tes-

tified that in his opinion, the $68,763 check from Beavers’

campaign committee to his pension fund was a loan, not in-

No. 13-3198 13

come to Beavers. He also explained that in his opinion, the

100 campaign checks to Beavers were loans and advances.

Gershinzon explained that, in reaching both conclusions, he

relied heavily on Beavers’ statements that he (Beavers) con-

sidered the transactions to be loans. The district court ruled

that Gershinzon could not base his expert opinions on what

Beavers had told him about his (Beavers’) state of mind at

the time of the charged offenses.

Gershinzon then testified before the jury, where he ini-

tially offered his opinions about whether the pension pay-

ment and 100 checks were loans. However, when Ger-

shinzon’s testimony then veered into topics that were argua-

bly irrelevant, the district court ordered a second voir dire

examination—conducted outside the jury’s presence—to de-

termine the relevance of those statements.

At this second voir dire, Gershinzon testified that Bea-

vers’ W-2 from Cook County incorrectly omitted the $1,200

monthly stipend from his gross income. He also testified that

he believed Beavers’ W-2 from the City of Chicago was in-

correct because it did not reflect the $68,763 campaign check

to the pension fund “as a reduction of taxable wages.” When

questioned by the government as to whether Beavers’

$68,763 contribution to the pension was “voluntary”—an is-

sue that had tax implications—Gershinzon said the payment

was not mandatory, but he did not feel comfortable opining

whether it was “voluntary” on Beavers’ part.

At the end of this voir dire, the district court said that it

was “deeply concerned” about Gershinzon’s reliability. The

court noted that Gershinzon could not testify about the basis

for his conclusions without reliance on Beavers’ statements

to him about Beavers’ subjective intent. The court also stated

14 No. 13-3198

that Gershinzon could not “follow the rules” and was not

“careful with his assumptions.” As an example, the court cit-

ed Gershinzon’s testimony that many of his clients do not

understand their W-2s, but said that Gershinzon did not

consider the possibility that a former alderman and Cook

County Commissioner could “get a detailed explanation

from high ranking City and County officials as to what was

in his W-2 and how it was arrived at.”

The court ultimately struck Gershinzon’s conclusions

about whether the transactions were loans, but it still al-

lowed the jury to consider Gershinzon’s testimony with re-

spect to the objective characteristics Gershinzon would look

for in determining whether a transfer was a loan, an ad-

vance, or income.

ii. The first voir dire of Gershinzon

Beavers argues that the court should have accepted his

written disclosures as sufficient and that the court thus erred

in permitting the government to conduct an extensive voir

dire of Gershinzon before trial. Federal Rule of Criminal

Procedure 16 required Beavers to provide the government

with a written summary of any expert testimony that he in-

tended to use as evidence at trial. Fed. R. Crim. Pro.

16(b)(1)(C). This summary must “describe the witness’s

opinions, the bases and reasons for those opinions, and the

witness’s qualifications.” Id.

Before trial, the defense repeatedly gave the government

insufficiently detailed summaries. These summaries provid-

ed a general list of examination topics (e.g., “general ac-

counting principles,” “general tax reporting and bookkeep-

ing”) and one letter noted—in one sentence—that Ger-

No. 13-3198 15

shinzon would testify that in his opinion Beavers complied

with the tax code. The summaries did not provide any more

specific information about Gershinzon’s opinions or the ba-

ses therefore. We agree with the district court that the sum-

maries were “sketchy on details” and that the voir dire was

an appropriate remedy. In fact, Beavers arguably chose that

course. (During a break in the voir dire, defense counsel

said, “Your Honor gave us a choice of either submitting

documents or voir dire. I think we chose – we chose the voir

dire… .”) And in any event, Beavers must—but cannot—

show prejudice from the court’s decision to allow the voir

dire, see United States v. White, 582 F.3d 787, 804 (7th Cir.

2009), because he was not entitled to surprise the govern-

ment with ill-defined expert testimony, see United States v.

Hoffecker, 530 F.3d 137, 185 (3d Cir. 2008) (noting that Rule 16

seeks “to minimize surprise that often results from unex-

pected expert testimony, reduce the need for continuances,

and to provide the opponent with a fair opportunity to test

the merit of the expert’s testimony through focused cross-

examination.” (quoting Rule 16 Advisory Committee Notes

(1993 Amendment))). We therefore reject Beavers’ argument

that the court abused its discretion on this score.

iii. Limits on Gershinzon’s testimony

Beavers next disputes the district court’s various limita-

tions on Gershinzon’s testimony. “We review a district

court’s decision to admit or exclude expert testimony for

abuse of discretion,” keeping in mind that screening evi-

dence “is a function squarely within the purview of the trial

judge.” Lapsley v. Xtek, Inc., 689 F.3d 802, 809 (7th Cir. 2012).

We can conceptualize some of the limitations as state-of-

16 No. 13-3198

mind limitations, others as relevance limitations, and still

others as reliability limitations.

We begin with state-of-mind limitations. First, the district

court ruled that Gershinzon could not base his expert opin-

ions on what Beavers had told him about his (Beavers’) state

of mind at the time of the charged offenses. This limitation

was proper. Otherwise, Beavers could have gotten highly se-

lective and favorable statements of his before the jury with-

out having to face cross-examination. Later, the district court

also ruled that Gershinzon could not testify as to whether he

(Gershinzon) believed the 100 checks were loans. The court

reasoned that such testimony would violate Rule 704(b) of

the Federal Rules of Evidence, which prohibits expert wit-

nesses in a criminal case from opining as to whether the de-

fendant had the mental state necessary for the charged

crime. As the judge explained, “[t]he relevant state of mind

is whether defendant intended to treat withdrawals from his

campaign coffers as income or as loans. The expert cannot

state an opinion on this issue.” For Gershinzon to have ad-

dressed this issue would have been the equivalent of opining

on whether Beavers had the “willfulness” necessary for a tax

offense. See United States v. Windfelder, 790 F.2d 576, 582 (7th

Cir. 1986). We accordingly find no abuse of discretion in this

limitation.

Next, the relevance limitations prohibited Gershinzon

from testifying about issues that were not relevant absent

testimony or other evidence connecting them to Beavers’

state of mind at the time of the charged offenses. For exam-

ple, the court barred Gershinzon from offering his opinion

that Cook County erred by omitting the $1,200 monthly sti-

pend payments to Beavers. As explained above, this testi-

No. 13-3198 17

mony was irrelevant absent evidence that Beavers knew of

and relied on the county’s alleged obligation. Similarly, the

defense sought to ask Gershinzon about a form that Beavers

received from the pension fund in early 2008, as part of the

defense’s attempt to show that Beavers’ $68,763 pension

payment was not income. The court prohibited Gershinzon

from testifying about this form because Beavers received it

in 2008, so it was irrelevant to Beavers’ state of mind in 2007

when he filed his 2006 tax return. The court’s relevance limi-

tations were therefore appropriate. (And where Gershinzon’s

testimony was relevant, the court permitted it. For instance,

Gershinzon testified about accounting principles; about the

purpose of certain tax forms; about how tax professionals

disagree on the proper tax treatment of certain transactions;

about the differences between income, loans, and advances;

and about which records he would consider in determining

whether a transfer was income, a loan, or an advance.)

We turn now to the court’s reliability limitations. Recall,

the court’s determination as to Gershinzon’s reliability ulti-

mately resulted in the court’s finding Gershinzon unreliable

and instructing the jury to partly disregard Gershinzon’s tes-

timony—including, importantly, his opinions as to whether

the $68,763 pension payment and the 100 checks were loans

or income.

The court found Gershinzon unreliable for multiple rea-

sons. Crucially, the court found that Gershinzon “[wa]s not

careful with his assumptions,” and those “assumptions have

overtaken at least the minimum neutrality an expert is sup-

posed to have.” As noted above, one assumption was that,

because many of Gershinzon’s clients do not understand

their W-2s, it apparently followed that a high-ranking public

18 No. 13-3198

official (with access to advisors) was in the same position.

The court also criticized Gershinzon’s assumptions because

Gershinzon relied on his conversations with Beavers in

forming assumptions and ultimately conclusions about the

proper tax treatment of the transactions at issue in this case.

For instance, in concluding that the $68,763 pension pay-

ment was a loan, Gershinzon relied in substantial part on

Beavers’ statement to Gershinzon that Beavers considered it

a loan. Similarly, in opining that the 100 campaign checks to

Beavers were loans and advances, Gershinzon also relied on

Beavers’ statements to him. Even though the court had in-

structed Gershinzon not to rely on Beavers’ statements, Ger-

shinzon explicitly referenced those statements, indicating to

the court that Gershinzon could not get Beavers’ statements

“out of his [own] mind… . He can’t follow the rules.” Ger-

shinzon was also unable to point to portions of the tax code

to support his assertions about the tax treatment of various

payments, including the pension-fund payment. Thus,

stripped of Beavers’ statements, Gershinzon’s most im-

portant opinions lacked meaningful support.

Gershinzon also was unable to answer basic questions

about the topic of his testimony. Specifically, during the sec-

ond voir dire, the government asked Gershinzon about the

basis for his opinion that the City of Chicago should have

deducted Beavers’ lump-sum pension payment from his

gross income for 2006. Gershinzon acknowledged that Bea-

vers’ pension payment was not mandatory, but was unable

to say whether it was “voluntary,” because he could not tes-

tify to Beavers’ state of mind. The prosecutor clarified that

this was not a state-of-mind question; rather, a letter gave

Beavers three options, and Beavers selected the option that

maximized his pension benefits. Nonetheless, Gershinzon

No. 13-3198 19

would not say that Beavers’ choice was “voluntary.” After

considerable back-and-forth between the prosecutor and

Gershinzon, the court eventually said, “[a] step which is not

compelled is a step which is voluntary.”

We “give the district court wide latitude in performing its

gatekeeping function and determining both how to measure

the reliability of expert testimony and whether the testimony

itself is reliable.” Bielskis v. Louisville Ladder, Inc., 663 F.3d 887,

894 (7th Cir. 2011). In light of the foregoing analysis—which

indicates that Beavers’ expert relied on irrelevant considera-

tions, made questionable assumptions, and may have lacked

expertise about certain germane subjects (including relevant

portions of the tax code)—we find that the district court

properly exercised its discretion. Moreover, the court still

allowed Gershinzon to testify as to the objective characteris-

tics he would look for in determining whether a particular

transfer was income, a loan, or an advance. As a result, Ger-

shinzon’s analytical methodology was presented to the jury,

even if his particular conclusions were not.

iv. Jury instruction about Gershinzon’s conclusions

As noted, after Gershinzon testified, the district court in-

structed the jury to disregard his opinions as to whether the

relevant transactions were loans, advances, or income. How-

ever, the court also instructed the jury that it could consider

Gershinzon’s testimony about his methodology in determin-

ing whether a particular transfer is a loan versus income.

Beavers argues that the court’s wording was inappropriate

because it included a reference to the government expert’s

testimony; according to Beavers, this instruction “direct[ed]

the jury to disregard the defense expert but to consider the

government’s expert.” Contrary to Beavers’ argument, the

20 No. 13-3198

instruction expressly told the jurors that they could “consid-

er Mr. Gershinzon’s testimony, as well as the testimony of

the government’s [expert] witness, David Weiner, regarding

facts and circumstances relevant in deciding whether a par-

ticular check is a loan, advance, or income.” Beavers’ argu-

ment is therefore unpersuasive, and the court’s instruction

was well within its discretion.

C. Jury instruction about the definition of a loan

Next, Beavers contends that the district court incorrectly

instructed the jury on the definition of a “loan.” We review

the legal accuracy of a jury instruction de novo, but we eval-

uate the particular phrasing for abuse of discretion. United

States v. Dickerson, 705 F.3d 683, 688 (7th Cir. 2013).

Beavers wanted the following instruction:

When a taxpayer receives a loan, he incurs an obliga-

tion to repay that loan at some future date. Because of

this obligation, the loan proceeds do not qualify as in-

come to the taxpayer. When he fulfills the obligation,

the repayment of the loan likewise has no effect on his

tax liability.

Beavers’ proposed instruction quotes the Supreme Court’s

language in a tax case, C.I.R. v. Tufts, 461 U.S. 300, 307 (1983).

The district court instead gave the following instruction,

which the government proposed:

When a taxpayer receives a loan, he incurs an obliga-

tion to repay that loan. Because of that obligation to

repay, loan proceeds do not constitute income. The

transfer of money from one party to another consti-

tutes a loan only if, at the time of the transfer, the par-

ties to the transaction intend that the person who re-

No. 13-3198 21

ceives the money actually will be obligated to repay

it.

In determining whether the defendant has received

particular funds as a loan or as income, you should

consider all of the facts and circumstances surround-

ing the defendant’s receipt of the funds.

Both instructions are correct statements of the law. Both con-

vey that loan proceeds are not income because the taxpayer

has incurred a genuine obligation to repay the loan.

Nonetheless, Beavers argues that the district court’s in-

struction was erroneous for two reasons. First, he says that

the court was wrong to include the word “actually” in in-

structing the jury that a transfer of money is a loan only if

“the person who receives the money actually will be obligat-

ed to repay it.” (emphasis added). Beavers states that the

word “actually” is “superfluous” because an obligation to

repay a loan means an actual obligation to repay that loan.

Appellant Br., 28. But superfluity is not error. By pointing out

that an obligation is an actual obligation, Beavers concedes

that the court’s statement of the law is correct. The court’s

inclusion of an additional (perhaps unnecessary) term for

emphasis does not transform a correct statement of the law

into an incorrect one, and it falls well within the court’s dis-

cretion. Relatedly, Beavers argues that the court’s defining a

loan as an “actual obligation” implied that the parties’ sub-

jective intent to repay is not enough, and that some tangible

obligation (like a promissory note) is required. But the in-

struction simply does not say that. Rather, it conveys that the

recipient must actually intend to repay, which is legally ac-

curate and consistent with case law. See, e.g., Tufts, 461 U.S. at

307 (using the phrase “true loan”); Crowley v. C.I.R., 962 F.2d

22 No. 13-3198

1077, 1082 (1st Cir. 1992) (using “bona fide loan”); Frierdich v.

C.I.R., 925 F.2d 180, 185–86 (7th Cir. 1991) (using both “true

loan” and “bona fide loan”); Moore v. United States, 412 F.2d

974, 978 (5th Cir. 1969) (using “bona fide loan”).

Second, Beavers argues that the district court erred by in-

structing the jury that something is a loan only if the parties

intend it as such at the time of the transfer. Beavers raised this

objection after the instruction was given, so we review his

claim only for plain error. See United States v. Natale, 719 F.3d

719, 729 (7th Cir. 2013). We will reverse only if there was an

obvious error that affected Beavers’ substantial rights,

and that error seriously affects the fairness or integrity of ju-

dicial proceedings. United States v. Marcus, 560 U.S. 258, 262

(2010). In this case, it is not “obvious” that any error has oc-

curred, especially because the instruction was probably cor-

rect. See, e.g., Geftman v. C.I.R., 154 F.3d 61, 68 (3d Cir. 1998)

(“For ‘disbursements to constitute true loans there must

have been, at the time the funds were transferred, an uncon-

ditional obligation on the part of the transferee to repay the

money, and an unconditional intention on the part of the

transferor to secure repayment.’”) (quoting Haag v. C.I.R., 88

T.C. 604, 615–16 (T.C. 1987), aff’d, 855 F.2d 855 (8th Cir. 1988)

(table)); Todd v. C.I.R., 101 T.C.M. (CCH) 1603 (T.C. 2011)

(“[T]he Court gives the promissory note little weight. This

factor indicates the parties did not intend to establish a debt-

or-creditor relationship at the time the funds were ad-

vanced.”), aff’d, 486 Fed. App’x 423 (5th Cir. 2012). We there-

fore reject all of Beavers’ challenges to the jury instruction

about the definition of a loan.

No. 13-3198 23

D. Fair cross-section claim

Finally, Beavers alleges that his right to a jury made up of

a fair cross-section of the community was violated because

none of the fifty prospective jurors were African-American

males. Beavers raises both a statutory claim, based on the

Jury Selection and Service Act of 1968, 28 U.S.C. §§ 1861, et

seq., and a constitutional challenge based on the Sixth

Amendment.

i. Background

The panel of potential jurors in this case was drawn pur-

suant to the Plan for Random Selection of Jurors of the Unit-

ed States District Court for the Northern District of Illinois in

effect at the time of trial. The panel was comprised of ap-

proximately fifty potential jurors, four of whom were Afri-

can-American females. Three of the four African-American

prospective jurors were seated, two as jurors, and one as an

alternate. The fourth was excused for cause because she

worked as a tax preparer for H&R Block. After jury selection

commenced, Beavers objected to the fact that no African-

American men were included, and argued that this violated

Batson v. Kentucky, 476 U.S. 79 (1986). Beavers requested that

the panel be dismissed and replaced with a new one or, al-

ternatively, that the panel be supplemented with additional

prospective jurors. The district court declined both requests.

It noted that the relevant question was how the panel was

assembled by the jury office, and said that if Beavers wished

to make an argument about that office’s methodology, he

could investigate the issue.

24 No. 13-3198

Beavers made no further requests for relief at the time;

the jury was empaneled and the trial commenced. After his

conviction, Beavers raised the fair cross-section issue again

in his post-trial motions, arguing that the absence of African-

American males in the panel was the product of “systematic

exclusion.” The district court denied Beavers’ motion on the

grounds that (1) it was untimely; (2) no claim or evidence of

error in the administration of the plan was presented; (3) Af-

rican-American males are not a recognized distinctive group;

and (4) there was no evidence that the composition of the

venire was brought about by any illegality or unfairness.

ii. Statutory claim

The Jury Selection and Service Act provides, “No citizen

shall be excluded from service as a grand or petit juror in the

district courts of the United States on account of race, color,

religion, sex, national origin, or economic status.” 28 U.S.C.

§ 1862. A statutory challenge must be made by motion “be-

fore the voir dire examination begins, or within seven days

after the defendant discovered or could have discovered, by

the exercise of diligence, the grounds therefor, whichever is

earlier.” 28 U.S.C § 1867(a). The motion must also contain “a

sworn statement of facts which, if true, would constitute a

substantial failure to comply with the provisions of this ti-

tle....” 28 U.S.C § 1867(d). This is “the exclusive means” by

which a violation of the Act may be raised. 28 U.S.C.

§ 1867(e).

It is undisputed that Beavers did not file a motion before

the voir dire examination began, which is the relevant mo-

ment in this case. Instead, Beavers orally objected during the

voir dire examination. He also did not provide the required

“sworn statement of facts.” 28 U.S.C § 1867(d). Thus, he

No. 13-3198 25

waived any statutory challenge. See United States v. Phillips,

239 F.3d 829, 841 (7th Cir. 2001) (“Defendants’ failure to

make a motion in a timely manner and failure to provide ev-

idence, other than oral observations as to the lack of statisti-

cal proportionality, precluded a statutory challenge.”) (cita-

tions omitted).

iii. Constitutional claim

Beavers next raises a constitutional challenge to the com-

position of the jury pool, which we review de novo. United

States v. Neighbors, 590 F.3d 485, 491 (7th Cir. 2009). “The

Sixth Amendment secures to criminal defendants the right to

be tried by an impartial jury drawn from sources reflecting a

fair cross section of the community.” Berghuis v. Smith, 130

S. Ct. 1382, 1387 (2010). To make a prima facie showing that

the fair cross-section requirement has been violated, a de-

fendant must show that: (1) the group allegedly excluded is

a distinctive group in the community, (2) the representation

of this group in venires from which juries are selected is not

fair and reasonable in relation to the number of such persons

in the community, and (3) this underrepresentation is due to

systematic exclusion of the group in the jury selection pro-

cess. Duren v. Missouri, 439 U.S. 357, 364 (1979); Neighbors,

590 F.3d at 491.

Beavers did not develop an argument in his opening brief

as to why African-American men constitute a distinctive

group in the community. Women are a distinctive group, see,

e.g., Duren, 439 U.S. at 364, as are African Americans, see, e.g.,

Neighbors, 590 F.3d at 491. But the parties have cited no cases,

and we have found none, addressing whether African-

American men constitute a distinctive group under Duren.

We have clearly set out the standards by which we decide

26 No. 13-3198

whether a group is “distinctive” for Duren cross-section

claims, see United States v. Raszkiewicz, 169 F.3d 459, 463 (7th

Cir. 1999), but Beavers did not conduct that analysis or even

cite that case until his reply brief.

Beavers waived this issue because he did not address this

question of first impression in detail in his opening brief. See

Mahaffey v. Ramos, 588 F.3d 1142, 1146 (7th Cir. 2009) (“Per-

functory, undeveloped arguments without discussion or cita-

tion to pertinent legal authority are waived.”). His approach

prevented the opposing party from having the opportunity

in its brief to respond and fully air the arguments on the

other side. We express no view on the merits of Beavers’

waived argument.

We also find that if Beavers sought to make a separate

argument under the Equal Protection Clause, he waived this

argument as well. His brief on appeal seems to argue that

the district court committed an equal protection violation in

handling jury selection as it did, because around the time of

Beavers’ trial, another judge in the same district ordered a

new panel when the original jury pool contained only one

African-American male. However, Beavers did not develop

his legal theory and cited no cases in support of it. Again,

this constitutes waiver. E.g., United States v. Holm, 326 F.3d

872, 877 (7th Cir. 2003).

III. Conclusion

We AFFIRM William Beavers’ conviction.