Case: 19-50830 Document: 00515852310 Page: 1 Date Filed: 05/06/2021 United States Court of Appeals for the Fifth Circuit United States Court of Appeals Fifth Circuit FILED May 6, 2021 No. 19-50830 Lyle W. Cayce Clerk United States of America, Plaintiff—Appellee, versus Michael Herman; Cynthia Herman, Defendants—Appellants. Appeal from the United States District Court for the Western District of Texas USDC No. 1:17-CR-301 Before Dennis, Higginson, and Willett, Circuit Judges. Stephen A. Higginson, Circuit Judge: Appellants Michael and Cynthia Herman owned and operated three restaurants in Texas. In early 2013, the Internal Revenue Service initiated an undercover operation to determine whether the Hermans’ business tax returns understated gross receipts and whether the Hermans claimed personal expenses as business expenses on those returns. Following a four- day trial, a jury convicted the Hermans on one count of conspiracy to defraud the United States. The jury also convicted Michael of five counts and Cynthia of two counts of willfully filing false tax returns. The Hermans timely appealed. Case: 19-50830 Document: 00515852310 Page: 2 Date Filed: 05/06/2021 No. 19-50830 On appeal, the Hermans argue that the district court erred when it excluded defense exhibits, excluded the Hermans’ expert witness’s testimony, and limited the Hermans’ cross-examination of two Government witnesses. In addition, they argue that the district court’s cumulative errors deprived them of a fair trial. Separately, Cynthia also argues that Count One of the indictment was legally insufficient. For the reasons articulated below, we AFFIRM. I. Michael and Cynthia Herman, husband and wife, owned and operated three restaurants in Bastrop County, Texas: Cindy’s Gone Hog Wild, Cindy’s Downtown, and Hassler Brothers Steakhouse. Michael is a retired medic from the Houston Fire Department with an M.B.A. in marketing, and Cynthia is a former secretary with a high school degree. Both worked in and actively managed the restaurants. A. IRS Investigation The Internal Revenue Service (“IRS”) has a program called the Business Opportunity Project, which is designed to identify businesses that underreport income. Through this program, the IRS initiated an undercover investigation of the Hermans in early 2013. The IRS investigated the Hermans because they had listed one of their restaurants, Cindy’s Gone Hog Wild, for sale at an asking price that appeared high compared to its reported gross receipts. IRS Special Agent Daniel Vela assumed the identity of “Daniel Ramirez” and posed as an interested buyer. Over the course of the investigation, Agent Vela had three in-person meetings with the Hermans on May 9, 2013; May 30, 2013; and August 8, 2013. He also had phone conversations and exchanged text messages with Michael. Agent Vela was “wired” for all the meetings and phone conversations, and he recorded 10 hours and 14 minutes of video and audio clips. 2 Case: 19-50830 Document: 00515852310 Page: 3 Date Filed: 05/06/2021 No. 19-50830 During the undercover investigation, Michael and Cynthia made various statements to Agent Vela that suggested they did not include all the cash receipts generated by their restaurants on their financial reports and tax returns. For example, …
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