Source: http://ronaldweinland.info/falseprophet/2012/11/
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False Prophet Ronald Weinland » 2012 » November
Posted in Criminal Trial, Personal | 96 Comments »
Posted in Criminal Trial | 123 Comments »
Posted in Criminal Trial | 67 Comments »
The Defense Against Levels
The defense team for False Prophet Ronald Weinland made court filings regarding his sentencing. The pre-sentencing report from the probation office put Ron at an offense level of 18 based on taxes evaded of $245,000, an additional 2 levels for sophisticated means (his Swiss bank accounts) and 2 more levels for obstruction of justice. The US attorneys have asked for 2 more levels either based on aggravated role as the leader of a criminal enterprise or for abuse of trust.
The defense filing argues relative to the Swiss bank account:
Any funds or property that a taxpayer holds in trust for another are not included in the taxpayer’s gross income (i.e., 26 U.S.C. § 61). See 26 U.S.C. § 671. This is true even where, as a result of the taxpayer’s role as trustee, the taxpayer has dominion and control over the trust assets. Id. Accordingly, if Mr. Weinland held or received money or property in trust for the church, such amounts should not be included in Mr. Weinland’s gross income.
My response: Ron posted on his blog: “As it was stated in that sermon, those funds were placed in my name, yet there was also another name on the account, as an additional representative (an evangelist) of the Church, who had full access and legal right to those Church funds at any time.” Yet Johnny Harrell did not explain this to the IRS Special Agent when asked about it. And the “full access” was only a power of attorney executed a year-and-a-half after opening the account. The jury was not impressed with Johnny’s testimony. The money became legally Ron Weinland’s when put into a personal account. If he had died during the year-and-a-half before executing the power of attorney for Harrell, it would have become part of his estate. Some trust.
Here, it is undisputed that Mr. Weinland transferred approximately $290,000 of church funds in 2007 through his personal account into certain foreign accounts with a foreign financial institution in Switzerland. It is also undisputed that Mr. Weinland established the foreign accounts in 2003 shortly after Mr. Weinland delivered a sermon to church members in late 2002 informing them that, consistent with their beliefs, he was going to open an account in Switzerland in his personal name using approximately $200,000 of church funds. After opening the account, Mr. Weinland traveled to Switzerland with a COG-PKG representative so that the representative could be added as a power of attorney on the account. In late 2008 and early 2009, all of the funds in the foreign accounts were transferred from the foreign accounts back to church accounts in the United States. It is clear that these funds remained church funds while on deposit in the foreign accounts and the funds were eventually returned to the church accounts. There was no attempt by Mr. Weinland to hide from church members the existence of the foreign accounts, the transfer of church funds to the foreign accounts, the reasons for the transfers to the foreign accounts, or the fact that the foreign accounts were opened in his personal name.
Actually, Ron did not send out cassette tapes of the sermon. Nor did he send out tapes of a sermon a few months later during May of 2003 in which he mentioned the Swiss bank accounts. The recording of the December 2002 sermon did not appear on the church website until 2010. As pointed out by the government following their investigation, his members and even Johnny Harrell did not know how much money was in the accounts.
Then the issue of Laura’s globe trotting with Ron was discussed.
At trial, Mr. Weinland and other church members testified as to the vital role that Mrs. Weinland’s played in the church and to Mr. Weinland’s ministry. It is undisputed that most of the Weinlands’ airfare costs involved visiting and worshipping with church members and congregations across the world. The testimony clearly supported a determination that Mrs. Weinland performed a bona fide business purpose on behalf of the COG-PKG when she traveled with Mr. Weinland to visit, counsel and worship with these members and congregations. The total airfare costs for Mrs. Weinland over the time periods covered by the indictment totaled approximately $95,000.
Actually, Special Agent Palmisano mentioned quite a bit of other activity by Laura, such as shopping.
Then the defense addressed the 2-level enhancement for sophisticated means:
At the heart of the conduct at issue was a very unsophisticated reimbursement process wherein Mr. and Mrs. Weinland reimbursed themselves with church funds for expenses that were incurred on personal credit cards. Although the government disagreed with how certain expenses were characterized (i.e., church vs. personal), the evidence at trial supported a reimbursement process through which the Weinlands reimbursed themselves for substantial legitimate church expenses that they had incurred on their personal credit cards. For example, the government’s investigation determined that the Weinlands incurred legitimate church expenses on their personal credit cards totaling $2,979,417.57 (or, approximately 84% of the $3,567,236.35 in total credit card transactions) during the time period covered by the indictment. Mr. Weinland did nothing to hide this reimbursement process or the related transfers.
Did nothing to hide? He did nothing to make it public. Even Audra didn’t understand it.
All transfers were made through accounts either held in the name of Mr. and Mrs. Weinland and the church. Most of the purchases at issue were made using credit cards held in the name of Mr. and Mrs. Weinland. The Weinlands kept a significant amount of expense receipts during the five year period and created a significant paper trail that permitted the government to completely reconstruct five years of financial activity.
This “significant amount of expense receipts” was dumped on the government almost 4 years after being asked for them, just 3 weeks before trial. Hardly much time for the government to “completely reconstruct” 5 years of financial activity.
The defense argues that after excluding the $290,000 deposited in the Swiss bank account and $95,000 of Laura’s airfare from unreported income that the recalculated tax loss would be less than $200,000 for an offense level of 16 instead of 18 for a sentencing range of 21 to 27 months.
To counter the probation officer’s recommendation for a two-level enhancement for obstruction, the defense argues:
Moreover, the Sixth Circuit has recognized that “not every false statement made by a criminal defendant at trial necessarily qualifies as perjury.” United States v. Bazazpour, 690 F.3d 796 (6th Cir. 2012) (citations omitted). As a result, in applying Section 3C1.1 to alleged false testimony by the defendant, “the court should be cognizant that inaccurate testimony or statements sometimes may result from confusion, mistake, or faulty memory and, thus, not all inaccurate testimony or statements necessarily reflect a willful attempt to obstruct justice.”….. In determining what constitutes perjury, courts are to rely upon the definition of perjury set forth under the federal criminal perjury statute, 18 U.S.C. § 1621. Id. (quoting United States v. Dunnigan, 507 U.S. 87, 94 (1993). A witness violates the federal criminal perjury statute if he or she “gives false testimony concerning a material matter with the willful intent to provide false testimony, rather than as a result of confusion, mistake or faulty memory.”
So it seems that not only is Ron a False Witness but he was also a false witness at his trial.
Additionally, the Section 3C1.1 enhancement only applies where a defendant “engages in obstructive conduct with knowledge that he or she is the subject of an investigation or with the correct belief that an investigation of the defendant is probably underway.” Bazazpour, 690 F.3d 796. Thus, a defendant “who engages in obstructive conduct prior to the investigation, prosecution, or sentencing of the instant offense is not subject to the enhancement.”
In 2009, Agent Palmisano issued a summons to Audra to provide information. Audra resisted the summons, refusing to comply and a lawyer was hired to represent her. Audra had to be compelled to provide evidence. Do we believe that Ron had absolutely nothing to do with this? I doubt it. I rather believe he was involved in this obstructive behavior.
Regarding the government’s request for a two-level enhancement for Aggravated Role, the defense argues.
Section 3B1.1(c) provides for a two-level enhancement “[i]f the defendant was an organizer, leader, manager, or supervisor in any criminal activity.” U.S.S.G. § 3B1.1(c). For the enhancement under Section 3B1.1(c) to be warranted, “a defendant must have exerted control over at least one individual within a criminal organization….” United States v. Lalonde, 509 F.3d 750, 765 (6th Cir. 2007) (quoting United States v. Vandeberg, 201 F.3d 805, 811 (6th Cir. 2000)). In arguing for the aggravated role enhancement under Section 3B1.1(c), the government seems to be taking the position that the COG-PKG is a criminal organization. Such an allegation is unfortunate.
I don’t see that the government is calling PKG a criminal organization. PKG members are sincere though deluded. A criminal organization is not typically legally incorporated. The criminal organization would be the Weinland family itself, not the church.
In response to the two-level enhancement for Abuse of Position of Trust, the defense argues that the victim of the charges for which Ron was convicted was the IRS for which Ron did not technically hold a position of trust. My response is that as a leader of a church not required to make annual filings that he did hold a position of trust with respect to the IRS.
The defense made arguments for a downward variance.
The offenses of which Mr. Weinland stands convicted—five separate counts of tax evasion—are unquestionably serious. But the “circumstances of the offense[s]” suggest that the conduct at issue was primarily the result of the substantial growth of The Church of God – Preparing for the Kingdom of God (“COG-PKG”) during the time period covered by the indictment coupled with Mr. Weinland’s admitted failure to ensure that appropriate recordkeeping and accounting measures were in place to accommodate the church’s rapid growth and properly account for the church’s expenses, rather than any affirmative acts of Mr. Weinland to evade the payment of tax.
Mr. Weinland has spent the majority of his life in service to various church congregations as a minister. During the time period covered by the indictment, Mr. Weinland spent most of his time traveling to counsel, worship, and study with numerous COG-PKG congregations and church members across the world, preparing and delivering sermons, updating website materials, and writing a book. To be clear, Mr. Weinland’s significant daily efforts on behalf of COG-PKG are not offered as an excuse to any tax deficiency owed to the government or any failure to oversee the church’s finances. They simply confirm that Mr. Weinland was overwhelmed by the extensive growth of COG-PKG and his constant efforts to reach out to members across the world and did not have the appropriate expertise or assistance to properly address the substantial accounting and tax issues inherent to the operation of a religious or nonprofit organization.
I wonder what significant efforts Ron made for the church on the days on which he was on his Total Resolve Cruise, while on a 2-day layover in Hawaii and another 2-day layover at the Venetian Resort Hotel Casino which was in addition to his other stays there for elders conferences. Ron’s profligate spending habits relative to his stated income overwhelm the argument that he was overwhelmed by the growth in his church.
As stated above, Mr. Weinland understands the seriousness of the offenses and does not take them lightly. As the leader of COG-PKG, Mr. Weinland has acknowledged that he made mistakes in overseeing the financial matters of the church. To that end, Mr. Weinland has taken steps to engage a reputable accounting firm, with significant experience in working with religious organizations, nonprofits and ministers, to assist the church with handling financial and accounting matters. Further, Mr. Weinland accepts full responsibility for his actions and recognizes that there is likely tax due and owing for the tax years at issue. Mr. Weinland is prepared to cooperate fully with the IRS to determine what his appropriate civil tax liability is for the years at issue and work with the IRS to address payment of any outstanding liability.
It appears to me that Ron did not mend his ways after finding out about the investigation. He even stated on his blog that the church was paying for his legal defense. Don’t worry — the IRS will get their money on a civil basis. Too bad it will come from the pockets of Ron’s followers.
The numerous sentencing letters in support of Mr. Weinland that were submitted to the Court under seal offer more detail. The letters come from individuals throughout the world that Mr. Weinland has touched in deep and meaningful ways throughout his years in service as a minister. They portray Mr. Weinland as a compassionate counselor that has helped many families traverse difficult times ranging from marriage troubles to severe health issues; as a dedicated teacher that has helped lead and nurture numerous people in their daily religious studies and devotions; as a devoted husband and parent that serves as a role model and mentor to church members; as a trusted advisor that has helped guide several individuals through the darkness and despair of addiction and depression; as a kind and generous friend; and as a man of integrity.
I think the letters portray his followers as easily bought off by promotions to elder and partial refunds of their tithes in the form of travel expenses for their duties as elders, or trinkets for children.
Then the defense goes on to cite average sentence lengths in recent years of around 16 months. It also cited:
In United States v. Shehan, No. 2:10-CR-72 (E.D.Ky. Jan. 6, 2012), an individual taxpayer pleaded guilty to one count of attempted income tax evasion under 26 U.S.C. § 7201. The district court determined that the amount of tax due and owing to the IRS was $2,256,819.96 and sentenced the defendant to 24 months.
In United States v. Rozin, et al, No. 1:05-CR-139 (S.D.Ohio Feb. 9, 2011), taxpayer Rozin, along with other defendants, took business and individual tax deductions for the cost of so-called “Loss of Income” insurance policies, although the insurance aspect of the policies was questionable and the policies allegedly permitted Rozin to get back or maintain control of the premium funds. Rozin was convicted by a jury on three counts of tax-related crimes: subscribing a false tax return under 26 U.S.C. § 7206(1); attempting to evade taxes under 26 U.S.C. § 7201; and conspiracy to defraud the Government under 18 U.S.C. § 371. Following Rozin’s conviction, the district court determined the tax loss to be $775,294 and sentenced Rozin to 12 months and 1 day, and the court of appeals affirmed.
I would point out that Shehan pleaded guilty. As far as Rozin, there were other defendants to share the blame. I think the judge should consider the length of time that Agent Palmisano needed to investigate Ron including overcoming motions to quash requests for information and the non-cooperation of Ron’s daughter Audra which was no doubt totally her idea.
Next the defense turned to the notion of deterrence:
Weinland does not require any further deterrence. He has no prior criminal record and, as the sentencing letters reflect, has lived an exemplary life. Even with a sentence at the low end of the appropriate advisory sentencing range, he will be almost 65 years old upon release from prison. Weinland has worked to correct accounting and record keeping practices within COGPKG, and he has engaged a reputable CPA firm experienced in representing churches and nonprofits, in order to ensure that there are no tax issues in the future and all income is appropriately reported. There is no chance of recidivism.
No change of recidivism? Really? Ron returns to control the purse strings of a church with no oversight. No chance, huh?
The letters to the Court make clear that the public needs no protection from Mr. Weinland. In no way is Mr. Weinland a “danger to society.” Imprisonment is thus not necessary to further this sentencing goal.
It’s clear that the easily deluded public needs protection from financial piranhas like Ron Weinland.
No restitution should be ordered against Mr. Weinland. Restitution is not mandatory in this matter. See United States v. Frith, 461 F.3d 914, at 919 n.2 (7th Cir. 2006) (after Booker, 543 U.S. at 246, 259-60, § 5E1.1 is advisory). Section 5E1.1(b)(2), provides that restitution need not be ordered if the district court finds that “determining complex issues of fact related to the cause or amount of the victim’s losses would complicate or prolong the sentencing process to a degree that the need to provide restitution to any victim is outweighed by the burden on the sentencing process.” Here, any loss related to Mr. Weinland’s specific conduct would be limited to any unpaid taxes due and owing to the government. The appropriate avenue to determine Mr. Weinland’s potential tax deficiency for the years at issue would be through an IRS civil audit that is sure to follow. This will ensure that all of the complex tax issues involved in this matter can be addressed in a meaningful manner and that they will be appropriately resolved.
Restitution should be considered. There was a considerable cost to perform the investigation which went above and beyond Agent Palmisano’s time. Then there was the cost of the trial, 8 days of having 14 jurors is over $4000 in daily juror fees alone. Which hardly recompenses them for their lost income. Then there’s the cost of operating the court, and the cost of prosecution.
Posted in Criminal Trial | 46 Comments »
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