Opinion ID: 720571
Heading Depth: 3
Heading Rank: 1

Heading: Count 1, Conspiracy to Impede or Impair the IRS

Text: 10 On this charge, under 18 U.S.C. § 371, the Government bore the burden of proving beyond a reasonable doubt that Aubin agreed with at least one other conspirator to defraud the United States by obstructing the tax collecting function of the IRS, and one overt act in furtherance of the conspiracy. United States v. Chesson, 933 F.2d 298, 306 (5th Cir.), cert. denied, 502 U.S. 981, 112 S.Ct. 583, 116 L.Ed.2d 608 (1991). Because Aubin claimed that the statute of limitations barred this prosecution, the Government was also required to show that an overt act was committed within the six years preceding the date of the indictment. 11 For the evidence to sustain the conviction, it is not necessary that the evidence show an express or formal agreement; evidence of a tacit understanding is sufficient. Iannelli v. United States, 420 U.S. 770, 777 n. 10, 95 S.Ct. 1284, 1289 n. 10, 43 L.Ed.2d 616 (1975); United States v. Hopkins, 916 F.2d 207, 212 (5th Cir.1990). Louis Reese testified that one of the purposes of structuring the transaction as a land flip through Haft, Inc., was to impede the IRS from collecting taxes by making the deals so complicated that ... it was impossible to tell who owed taxes, what taxes might be owed and what the amount was. Reese also testified that he thought it was a part of the plan from the beginning that Haft would disappear. James Hague testified that filing tax returns for Haft would have been inconsistent with the secrecy necessary for the arrangement to succeed. Both Reese and Hague provided ample testimony regarding Aubin's central role in the transaction. This evidence is more than sufficient to allow a reasonable jury to find at least a tacit understanding that the parties would conceal Haft's profit from the IRS. 12 The government also presented sufficient evidence of an overt act in furtherance of the conspiracy within the statute of limitations period. The statute of limitations under the tax code for a conspiracy to defraud the United States in violation of 18 U.S.C. § 371 is six years. 26 U.S.C. § 6531(1). The grand jury returned the indictment in this case on February 24, 1993. Therefore, to sustain the conviction, there must be evidence of an overt act after February 23, 1987. 13 The evidence showed that the profit from the LBJ land flip was transferred to Slew Farms, a Cayman corporation set up by Hague, Reese, and Aubin. Hague, Reese, and Aubin, in turn, set up Cayman corporations to own their respective shares in Slew Farms. The corporation set up to hold Aubin's share was Sigma Group. The evidence also showed that Slew Farms owned a Kentucky corporation, Warrenton Farms, that was formed to own the horse farm. Aubin was the sole shareholder of Warrenton Farms. 14 On August 26, 1988, after federal regulators had made a criminal referral relating to the LBJ transaction, and after foreclosure had been ordered on the horse farm, Aubin caused Warrenton Farms to file for bankruptcy. The bankruptcy petition listed the IRS as a creditor having a priority in an unknown amount. However, the bankruptcy petition also falsely reported that Sigma Group had a secured claim against the property of Warrenton Farms in the amount of $15,614,691. Warrenton Farms supposedly incurred this debt on October 23, 1984, the date the profit from the LBJ land flip was wired to Kentucky and the purchase of the horse farm was closed. The government presented evidence that this loan was a fiction, and that the supporting documentation had been backdated well after the fact to create the appearance of a loan. The government also presented evidence that Aubin directed that the loan documentation be created. Thus, the bankruptcy petition indicated that a fictional loan, rather than the unreported profit from the LBJ land flip, was the source of the horse farm purchase money. From this evidence, a reasonable jury could conclude that the bankruptcy petition was designed to conceal from the IRS the transfer of Haft's unreported profit to Warrenton Farms, and therefore constituted an overt act in furtherance of the conspiracy to defraud the United States.