Opinion ID: 4019312
Heading Depth: 3
Heading Rank: 1

Heading: The Indictments and Pretrial Litigation

Text: A 2009 indictment charged Wanland with tax evasion (26 U.S.C. § 7201). A January 2012 superseding indictment charged Wanland with tax evasion, numerous counts of concealment of property subject to a levy (26 U.S.C. § 7206(4)), and several counts of willful failure to file a tax return (26 U.S.C. § 7203). The superseding indictment alleged that Wanland committed tax evasion by: (1) concealing the nature and extent of his assets; (2) making false statements about his income and ability to pay his taxes; (3) placing funds and property in the name of a nominee; (4) defying a tax levy; and (5) paying creditors other than the United States. As for the levy counts, the superseding indictment tied each count to a particular transaction, including checks, debit card purchases, and cash withdrawals. 8 UNITED STATES V. WANLAND
Wanland moved to dismiss the levy counts, arguing that under 26 U.S.C. § 6331(e), continuous levies are only authorized for “salary or wages,” and his partnership draws did not qualify as such. Therefore, the government could not prove that Wanland’s partnership profits were “property upon which levy is authorized,” as section 7206(4) requires. The district court concluded that the question ultimately was a factual dispute, and reserved it for trial. Wanland renewed this argument when he moved for a judgment of acquittal on the levy counts under Federal Rule of Criminal Procedure 29(a), which the district court again denied. Wanland also moved to dismiss the levy counts on statute of limitations grounds, arguing that the limit for these counts was three years, not six. The district court rejected that motion. It reviewed the language of 26 U.S.C. § 6531 (which governs the statute of limitations for tax crimes) to conclude that the six-year statute of limitations described in section 6531(1) applied to the levy counts, because it applies to “all offenses where fraud is an essential element.” Section 7206(4), titled “Removal or concealment with intent to defraud,” fell “under the umbrella of § 6531(1).”
Wanland filed for bankruptcy in 2007, and listed the IRS as his biggest creditor. The IRS eventually received limited proceeds from the liquidation of Wanland’s assets. In June 2011, Wanland obtained his discharge under 11 U.S.C. § 727. The attached “Explanation Of Bankruptcy Discharge In A Chapter 7 Case,” however, stated that “[d]ebts for most UNITED STATES V. WANLAND 9 taxes” are one of the “common types of debts” that are “not discharged.” After the return of the superseding indictment, Wanland moved to dismiss the charges on res judicata grounds. He argued that “because the Government failed to raise the claims in the indictment during the bankruptcy proceeding to prevent nondischargeability, and failed to stay the bankruptcy proceedings pending the outcome of the current criminal matter,” res judicata prevented the government from “pursuing a criminal action concerning the assets and tax liabilities the bankruptcy court already discharged.” The district court rejected that argument, explaining that res judicata “does not apply where the claim in question could not have been brought in the prior proceeding due to limitations on the prior court’s jurisdiction.”