Opinion ID: 563204
Heading Depth: 2
Heading Rank: 2

Heading: The Indictment's Allegations of Unlawful Conduct in Counts 1 through 6

Text: 36 Again, some aspects not illegal--the possessing of three non-tax business purposes--regardless of the illegality of others, have been claimed to render the counts fatally defective. 37 Thus, because the indictment itself states that the appellants 1) encouraged UBO investors to place all of their assets into the UBOs and outside the reach of potential creditors, including the IRS; 2) represented to potential investors that the UBOs would assure total privacy; and 3) told potential investors that they would receive 23% interest from the purchase of certificates of deposit, the counts should be dismissed. 3 See, e.g., Current v. United States, 287 F.2d 268, 269-70 (9th Cir.1961). 38 Appellants' contentions to that effect are of no merit. Counts 2 through 6 of the indictment did not refer to sham status nor did they refer to Count 1. Counts 2 through 6, therefore, did not recite any of the business purposes allegedly mentioned in Count 1. Therefore, appellants' assertion of fatal defect is not to be considered with respect to Counts 2 through 6. United States v. Duncan, 598 F.2d 839, 849 n. 5 (4th Cir.), cert. denied, 444 U.S. 871, 100 S.Ct. 148, 62 L.Ed.2d 96 (1979) (each count of indictment must stand or fall alone, except insofar as the allegations of another count are incorporated by reference). 39 The conspiracy count, Count 1, on the other hand, was not defective even assuming it did allege that the UBOs had some business purpose. As we have previously pointed out, an agreement to conceal income and assets from the IRS constitutes a conspiracy to defraud the United States whether or not the entities used are shams. 40 The indictment alleged that the appellants represented to potential investors that a legitimate business purpose existed. Such representations could not be characterized as an objective determination that a valid business purpose existed. United States v. Lewis, 730 F.Supp. 691, 695 (W.D.N.C.1990). Thus we find no fatal flaw in the language of the indictment as to Counts 1 through 6. 41