Source: http://federaltaxcrimes.blogspot.co.uk/
Timestamp: 2016-09-24 20:52:30
Document Index: 465058379

Matched Legal Cases: ['§ 3', '§ 7206', '§2', '§2', '§3', '§3', '§3', '§3', '§ 7202', '§ 7201', '§ 922', '§ 921', '§ 921', '§ 922', '§ 922', '§ 922', '§ 922', '§ 922']

Adeolu's tax preparation company employed approximately fifteen people and prepared fraudulent tax returns in two ways: by selling the taxpayer an individual's personal information to fraudulently claim as the taxpayer's dependent; or, by suggesting that the taxpayer fraudulently claim a dependent that the taxpayer personally knew. According to the District Court, the individuals who were fraudulently claimed as dependents ranged in age from one to eighteen years old, including a thirteen-year-old, nine-year-old, six-year-old, and five-year-old child. (App. 1111.) The issue was whether that conduct justified the 2-level vulnerable victim enhancement under Sentencing Guideline § 3A1.1(b)(1), here.
France's financial prosecutor on Wednesday sought a three-year jail term for former budget minister Jerome Cahuzac, who was forced to quit government three years ago over the discovery that he owned a secret bank account abroad. Cahuzac, 64, a plastic surgeon by profession who was appointed budget minister when Socialist President Francois Hollande took power in 2012, stands accused of tax fraud and money laundering. "You have tarnished this country's honor," Prosecutor Eliane Houlette said. "What has not been repaired, and will never be, is the harm done to our country, which became a laughing stock." * * * * The ex-minister, who had presented government proposals to clamp down on tax evasion in December 2013, quit three months later and admitted that he had indeed placed 600,000 euros ($667,000) abroad. Judicial investigators later unearthed an account opened at Swiss bank UBS in the early 1990s that was later transferred to Singapore under the codename "Birdie". * * * * The prosecutor also sought a 1.875 million euro ($2.10 million) fine from the Reyl bank of Geneva, which in 2009 allegedly helped Cahuzac transfer funds to Singapore to avoid detection by French tax authorities, and an 18-month suspended jail term for its director, Francois Reyl. The bank denies any wrongdoing. Francois Reyl told the court he had only played a technical role in the confidential request from the former minister, which appeared to have no tax evasion motive to him at the time.
Their hidden wealth in foreign bank accounts in Switzerland, Singapore and the British tax haven of the Isle of Man was estimated at 3.5 million euros ($3.9 million) in 2013, assistant prosecutor Jean-Marc Toublanc said. The value of their concealed assets likely was much higher because the money helped the couple finance a lavish lifestyle over the years, Toublanc said. Branding tax evasion as a "world plague" and citing the Panama Papers scandal as a recent example, Toublanc called the Cahuzac spouses "among the biggest fraudsters" of whom French tax authorities are aware. On trial in Paris alongside Cahuzac and his ex-wife were a banker, a legal adviser, and bank Reyl, a respectable but little-known Swiss establishment, all charged with money laundering. During the trial, the former budget minister argued for the first time that he originally opened his Swiss account in 1992 to collect funds from drug companies. He said the money was to be used for illegal financing of a branch of the Socialist Party led by Michel Rocard, the former French prime minister who died in July. However, Cahuzac did not provide any evidence for those claims. After the first press reports that Cahuzac had a hidden foreign bank account surfaced in late 2012, Cahuzac publicly denied the allegations for months. He eventually admitted to the fraud in April 2013, saying he had been "trapped in a lying spiral." French law does not sanction perjury.
According to the Swiss Federal Supreme Court’s interpretation of the DTT NL, it is sufficient if the group request contains sufficient information that will allow an identification of the person in question to be able to provide administrative assistance. That specifically naming a client is not mandatory is due to the purpose of the DTT NL, which according to the relevant protocol consists of, “an exchange of tax information to the maximum extent without allowing the states partial to the agreement to go on “fishing expeditions”. Finally, the Swiss Federal Supreme Court also checked whether this could be considered a legitimate group request or indeed a fishing expedition, which would not have been permitted. Despite the fact that the definition of group in the present request for administrative assistance goes quite far, the Swiss Federal Supreme Court judged that it is not an inadmissible fishing expedition.
Impact of this decision Switzerland has already concluded more than 60 double taxation treaties and tax information agreements, which permit administrative assistance based on group requests. Moreover, under the OECD administrative assistance convention concerning Switzerland, group requests will be possible in any case as of 2017. The administrative assistance convention foresees retroactive effect to 1 January 2014. We expect a number of other states to follow the example set by the Netherlands and to address Switzerland with similar group requests. At this time, it remains to be seen which countries will place a similar request.
Swiss Court Sets Precedent With Release of UBS Client Data (Fiunews.com 9/12/16), here. Joshua Franklin and Angelika Gruber, Swiss Supreme Court rules bank data can be sent to Dutch (Reuters 9/13/16), here. Swiss noose tightens around suspected Dutch tax evaders (Swissinfo.ch 9/12/16), here.
In the plea agreement, Stern agrees to plead to Counts Five and Seven, two counts of aiding and assisting, § 7206(2), here. Aiding and assisting is a three-year maximum felony, so the maximum incarceration period permitted under the plea agreement is six-years. I won't get into the details of how Stern committed the crime, but it appears that he and an associate in his firm took the key steps necessary to create a structure purporting to transfer energy tax credits otherwise unusuable by one corporation through a series of transactions to two trusts which claimed the credits on their tax return and allocated $5,337,103 in improper credits to persons investing in the scheme. Through those actions, defendant aided and assisted in the preparation and presentation of the trust tax returns that resulting in the claiming of credits by perhaps 55 taxpayers.
As is often the case, the plea agreement addresses the Sentencing Guidelines calculations. (See ¶¶ 8 ff, pp. 10 ff.) i. The base offense level 1s 24 pursuant to Guidelines §§2T1.4(a)(1) and 2T4.1(J), because the intended tax loss, $5,337,103, was more than $3,500,000 and not more than $9,500,000. ii. Pursuant to Guideline §2T1.4(b)(2), the offense level is increased two levels because the offense involved sophisticated means. iii. Pursuant to Guideline §3Bl.l(c), the offense level is increased two levels because the defendant was a supervisor of a participant in the criminal activity. iv. Defendant has clearly demonstrated a recognition and affirmative acceptance of personal responsibility for his criminal conduct. If the government does not receive additional evidence in conflict with this provision, and if defendant continues to accept responsibility for his actions within the meaning of Guideline §3El.1(a), including by furnishing the United States Attorney's Office and the Probation Office with all requested financial information relevant to his ability to satisfy any fine that may be imposed in this case, a two-level reduction in the offense level is appropriate. v. In accord with Guideline §3El.1(b), defendant has timely notified the government of his intention to enter a plea of guilty, thereby permitting the government to avoid preparing for trial and permitting the Court to allocate its resources efficiently. Therefore, as provided by Guideline §3E1.1(b), if the Court determines the offense level to be 16 or greater prior to determining that defendant is entitled to a two-level reduction for acceptance of responsibility, the government will move for an additional one-level reduction in the offense level. c. Criminal History Category. With regard to determining defendant's criminal history points and criminal history category, based on the facts now known to the government, defendant's criminal history points equal zero and defendant's criminal history category is I. d. Anticipated Advisory Sentencing Guidelines Range. Therefore, based on the facts now known to the government, the anticipated offense level is 25, which, when combined with the anticipated criminal history category of I, results in an anticipated advisory sentencing guidelines range of 57 to 71 months' imprisonment, in addition to any supervised release and fine the Court may impose.
b. Peters' claim that the plea was coerced by the threat of prosecution of his wife lacks merit The Fifth Circuit has explained: [G]uilty pleas made in consideration of lenient treatment as against third parties pose a greater danger of coercion than purely bilateral plea bargaining." United States v. Nuckols, 569 (5th Cir.1979). Even so, there is no "intrinsic constitutional infirmity" in promising leniency to a third party in exchange for a guilty plea. Id. A prosecutor has discretion to "inform an accused that an implicated third person will be brought to book if he does not plead guilty." Id. The prosecutor has a duty of good faith in making such a representation, which duty is satisfied where he has probable cause to believe the third person has committed a crime. Id.; United States v. Diaz, 733 F.2d 371, 375 (5th Cir. 1984). McElhaney, 469 F.3d at 385 [McElhaney v. United States, 469 F.3d 382 (5th Cir. 2006)]. Thus, so long as the Government has probable cause to bring charges against a defendant's relative, the "defendant's plea 'would not be involuntary by reason of a desire to extricate his relatives from such a possible good faith prosecution.'" Id. (quoting Diaz, 733 F.2d at 375). Peters does not allege that the Government lacked probable cause to bring charges against his wife in the underlying criminal case or otherwise acted in bad faith during the plea bargaining process. Rather, he asserts that defense counsel threatened that his wife would be subject to indictment should Peters proceed to trial. See Brief in Support of Motion, Exhibit B. However, it is evident from the record that defense counsel reasonably concluded the Government had probable cause to bring an indictment against Peters' wife, since she was a signatory on the tax and bankruptcy filings at issue in the case. See Arrambide Affidavit at 1-6. Under the circumstances, the Court cannot find fault with counsel's advice regarding the potential exposure of his clients' spouse. Moreover, Peters' decision to enter a guilty plea in order to prevent such a good faith prosecution cannot be deemed involuntary.
Guilty Pleas - Withdrawal,
Tax Attorney Convicted of Employment Tax Fraud (9/8/16; 9/10/96)
According to the evidence presented at trial, between 2004 and 2015, Steven Lynch, a tax attorney, co-owned and operated the Iceoplex at Southpointe, a recreational sports facility located in Washington County, Pennsylvania. The Iceoplex included a fitness center, ice rink, soccer court, restaurant and bar. Lynch controlled the finances for these businesses and was responsible for collecting income and employment taxes withheld from employee wages, accounting for these taxes and filing Forms 941, payroll tax returns, and paying these taxes over to the Internal Revenue Service (IRS). The jury found that between 2012 through 2015, Lynch failed to timely pay over to the IRS more than $790,000 in taxes withheld from the wages of the employees for these businesses. JAT Comments:
2. Failure to collect and pay over, § 7202 (28 counts, one per employer per quarter, presented as Counts ___ - ___, with one in that series dismissed): NOT GUILTY ON 11 COUNTS, GUILTY ON 16 COUNTS. Most importantly for the present discussion, the jury verdict does not find any amount of tax involved. But, the jury verdict does find the defendant guilty of 16 counts and the counts, as alleged in the superseding indictment, here, does contain the approximate numbers for each quarter. So, the jury verdict although not explicit as to amounts might make the finding by incorporation from the superseding indictment. Since, however, the amount of tax involved is not an element of the crime, I presume that the authority for § 7201 might be applicable here as well/
Federal law generally prohibits the possession of firearms by any person convicted in any court of a “crime punishable by imprisonment for a term exceeding one year.” 18 U.S.C. § 922(g)(1). Excluded from the prohibition is “any State offense classified by the laws of the State as a misdemeanor and punishable by a term of imprisonment of two years or less.” Id. § 921(a)(20)(B). And there is also an exemption for “[a]ny conviction which has been expunged, or set aside or for which a person has been pardoned or has had civil rights restored,” where the grant of relief does not expressly preserve the firearms bar. Id. § 921(a)(20). In United States v. Marzzarella we adopted a framework for deciding facial and as-applied Second Amendment challenges. 614 F.3d 85 (3d Cir. 2010). Then in United States v. Barton we held that the prohibition of § 922(g)(1) does not violate the Second Amendment on its face, but we stated that it remains subject to as-applied constitutional challenges. 633 F.3d 168 (3d Cir. 2011). Before us are two such challenges. In deciding them, we determine how a criminal law offender may rebut the presumption that he lacks Second Amendment rights. In particular, a majority of the Court concludes that Marzzarella, whose two-step test we reaffirm today, drives the analysis. Meanwhile, a separate majority holds that the two as-applied challenges before us succeed. Part IV of this opinion sets out how, for purposes of future cases, to make sense of our fractured vote. * * * * IV. Conclusion When sorting out a fractured decision of the Court, the goal is “to find a single legal standard” that “produce[s] results with which a majority of the [Court] in the case articulating the standard would agree.” United States v. Donovan, 661 F.3d 174, 182 (3d Cir. 2011) (quoting Planned Parenthood of Southeastern Pa. v. Casey, 947 F.2d 682, 693 (3d Cir. 1991), modified on other grounds, 505 U.S. 833 (1992)). We have at times “looked to the votes of dissenting [judges] if they, combined with votes from plurality or concurring opinions, establish a majority view on the relevant issue.” Id. And when no single rationale explaining the result enjoys the support of a majority of the Court, its holding “may be viewed as that position taken by those Members who concurred in the judgments on the narrowest grounds.” Marks v. United States, 430 U.S. 188, 193 (1977) (quoting Gregg v. Georgia, 428 U.S. 153, 69 n.15 (1976) (plurality opinion)). Applying those interpretive tools here, the following is the law of our Circuit: (1) the two-step Marzzarella framework controls all Second Amendment challenges, including as-applied challenges to § 922(g)(1); (2) a challenger will satisfy the first step of that framework only if he proves that the law or regulation at issue burdens conduct protected by the Second Amendment; (3) to satisfy step one in the context of an as-applied challenge to § 922(g)(1), a challenger must prove that he was not previously convicted of a serious crime; (4) evidence of a challenger’s rehabilitation or his likelihood of recidivism is not relevant to the step-one analysis; (5) as the narrowest ground supporting the Court’s judgments for Binderup and Suarez, the considerations discussed above will determine whether crimes are serious (i.e., disqualifying) at step one; and (6) if a challenger makes the necessary step-one showing, the burden shifts to the Government at step two to prove that the regulation at issue survives intermediate scrutiny. In the cases before us, though Binderup and Suarez fail to show that their misdemeanor offenses are not subject to § 922(g)(1), they have rebutted the presumption that they lack Second Amendment rights by distinguishing their crimes of conviction from those that historically led to exclusion from Second Amendment protections. This meets the first-step test of Marzzarella. At step two, the Government has failed to present sufficient evidence to demonstrate under even intermediate scrutiny that it may, consistent with the Second Amendment, apply § 922(g)(1) to bar Binderup and Suarez from possessing a firearm in their homes. Accordingly, we affirm the judgments of the District Courts.
Third Circuit Rejects Media's Right to Names of Unindicted Co-Conspirators (9/7/16)
As Judge Easterbrook famously lamented in United States v . Reynolds, 919 F.2d 435, 439 (7th Cir. 1990), a tax case, conspiracy charges in criminal cases are “inevitable because prosecutors seem to have conspiracy on their word processors as Count I; rare is the case omitting such a charge.” That is hyperbole, but not much. One favorite trick of prosecutors charging conspiracy counts is to allege that there are unindicted co-conspirators who are unnamed. For example, in the Enron prosecution, the Government asserted that there were up to 114 unindicted co-conspirators not named in the indictment. See Mary Flood, Names of Some Enron Co-Conspirators Can be Released (Houston Chronicle 12/10/2004), here. Also, in the large scale tax shelter prosecutions in the Southern District of New York beginning in 2005, unindicted co-conspirators were ubiquitous. The naming of unindicted co-conspirators in large cases with many culpable actors reflects the truism that all of the potential co-conspirators could not be indicted, at least in the early rounds of indictments, if ever. (Perhaps the naming of some or even legions of unindicted and unnamed co-conspirators adds some appearance of gravitas to the case that it might not otherwise have.)
Why are unindicted co-conspirators not named? DOJ's policy, here, is:
9-11.130 - Limitation on Naming Persons as Unindicted Co-Conspirators In the absence of some significant justification, federal prosecutors generally should not identify unindicted co-conspirators in conspiracy indictments. The practice of naming individuals as unindicted co-conspirators in an indictment charging a criminal conspiracy has been severely criticized in United States v. Briggs, 514 F.2d 794 (5th Cir. 1975). Ordinarily, there is no need to name a person as an unindicted co-conspirator in an indictment in order to fulfill any legitimate prosecutorial interest or duty. For purposes of indictment itself, it is sufficient, for example, to allege that the defendant conspired with "another person or persons known." In any indictment where an allegation that the defendant conspired with "another person or persons known" is insufficient, some other generic reference should be used, such as "Employee 1" or "Company 2". The use of non-generic descriptors, like a person's actual initials, is usually an unnecessarily-specific description and should not be used. If identification of the person is required, it can be supplied, upon request, in a bill of particulars. See USAM 9-27.760. With respect to the trial, the person's identity and status as a co-conspirator can be established, for evidentiary purposes, through the introduction of proof sufficient to invoke the co-conspirator hearsay exception without subjecting the person to the burden of a formal accusation by a grand jury. In the absence of some significant justification, federal prosecutors generally should not identify unindicted co-conspirators in conspiracy indictments. See USAM 9-16.500; 9-27.760.
With that background, the Third Circuit today issued an interesting decision in a case involving media access to the names of unindicted co-conspirators in the so-called Bridgegate scandal involving the prosecution of Chris Christie's cronies appointed to positions at the Port Authority of New York where they could take out political retribution. North Jersey Media Group Inc. v. United States, ___ F.3d ___ (3d Cir. 2016), here. As usual, the conspiracy count in the indictment named unindicted co-conspirators. The prosecutors identified the unindicted co-conspirators to the defense in a letter that was not part of the public record. The media wanted to know access to the list naming the unindicted co-conspirators. The media intervened and moved for disclosure. One of the unindicted co-conspirators -- identified as "John Doe" -- intervened and objected to disclosure. The district court ordered disclosure. John Doe appealed. The Court of Appeals reversed.
Essentially, the holding is that list of the names of the co-conspirators was disclosed by the prosecutors to the defense as part of the discovery obligations rather than as a bill of particulars that normally would be part of the public record. Criminal discovery is generally not on the public record. Hence, there is no right to access to that list at this stage of the case. Of course, those names may "out" during some later public part of the criminal proceeding, but they are not publicly available at this stage.
Although the appeal arises out of a matter of high public interest, the issue presented is basic and undramatic. We must decide whether the letter is more akin to a bill of particulars or to a discovery disclosure in a criminal case. That distinction is dispositive, because the former is subject to a recognized right of public access while the latter has historically been kept from public view. See United States v. Smith, 776 F.2d 1104 (3d Cir. 1985). Because we conclude that the letter in question is a part of the general discovery process, it is not subject to any First Amendment or common law right of public access, and we will vacate the District Court’s order insofar as it requires the letter to be publicly disclosed. Then, after analysis, the Court concludes:
III. CONCLUSION Public access to judicial documents and court proceedings is a respected tradition and important legal principle, but it has bounds. “[D]iscovery traditionally has been conducted by the parties in private and has not been publically available.” Wecht, 484 F.3d at 208. That is so even in a case affected by heightened public interest. The time may come, perhaps at trial, when the information in the Conspirator Letter ought to be made public, but that time is not here yet. Because neither the First Amendment right of access nor the common law right of access applies to the Conspirator Letter, we will vacate the District Court’s order insofar as it requires disclosure of the Letter.
Co-Conspirators - Unindicted,