United States v. Elaine Martin

Elaine Martin appeals her convictions for subscribing false federal tax returns and her sentence for those convictions and several fraud-related convictions. First, we address Martin’s contention that the district court abused its discretion in admitting evidence that, years before the conduct underlying this case, she had submitted Idahp state tax returns on which she improperly characterized several thousand dollars in personal expenses as deductible farm expenses and had been audited by Idaho tax authorities. Second, we address whether the district court misapplied the Sentencing Guidelines in calculating the losses that resulted from Martin’s fraud, where her company was awarded government contracts under programs meant to aid disadvantaged businesses, for which Martin’s company did not legitimately qualify. We have jurisdiction under 28 U.S.C. § 1291 . For the reasons that follow, we vacate Martin’s tax convictions, vacate her sentence, and remand for further proceedings.

I

Martin owned a construction company, MarCon, which specialized in installing steel guardrails and concrete barriers on public highways. MarCon also earned revenue by selling used materials the…