Opinion ID: 2978359
Heading Depth: 3
Heading Rank: 2

Heading: Bogart’s Participation

Text: On October 11, 1994, Bogart met with Schultz to assist Schultz in structuring a plan to “shield” Schultz’s capital gains resulting from the sale of his stock in National Revenue Corporation. As part of this plan, Bogart signed an agreement with Schultz to purchase stock in Kennedy Northern, Inc. The agreement obligated Schultz to pay $2.5 million as a down payment on the stock, and to pay the remaining balance of $2.5 million within thirty No. 07-3779 United States v. Bogart Page 3 days. If Schultz failed to pay the balance within the required time, the agreement provided that Schultz would forfeit the $2.5 million down payment. However, Bogart and Schultz intended for Schultz to default on the obligation to pay the balance—and thus to forfeit the $2.5 million payment—in order to generate losses to offset Schultz’s capital gains for tax purposes. The agreement also offered Schultz a “mechanism . . . to transfer his funds to offshore accounts in the Cayman Islands which became controlled by [Schultz] through his brother, Tom Schultz.” (J.A. 312.) In November 1994, Bogart entered into a similarly fraudulent agreement with Schultz’s father to sell an office building, valued at almost $10 million, for $2 million. The agreement had terms similar to the transaction to purchase Kennedy Northern’s stock—the failure to pay the balance within thirty days resulted in the forfeiture of a substantial down payment. “By April 1995, . . . Bogart had performed as Schultz required, transferring $4.3 million offshore to accounts controlled by Schultz, through [his brother, Tom], in the Cayman Islands.” (J.A. 313.) After assisting Schultz with these transactions, Bogart had no further involvement with Schultz until 1997. In May 1997, Bogart met with Schultz’s brother, Tom. During the meeting, Bogart agreed to help Tom and Schultz conceal Schultz’s ownership interest in the offshore funds, despite knowing that a grand jury was investigating Schultz’s various transactions. To hide Schultz’s ownership interest in these funds, Bogart incorporated Cedarwood to use as a nominee for the wire transfers. In August 1997, $380,000 was transferred from Schultz’s Cayman Island accounts to Cedarwood. As directed by Schultz, Bogart used $327,000 to “purchase” a fifty-percent interest in JAC. Bogart also arranged for the transfer of $800,000 from the Cayman Island accounts, and $2 million from a bank account in London, to Cedarwood. Bogart then sent the funds to Frank McPeak, another coconspirator, who purchased several judgments against Schultz through Cedarwood, JRC, and JAC. Bogart continued to participate in the conspiracy through April 2000, when he “made false statements in a deposition . . . . intended to mislead . . . Richard Kennedy’s attorney, and to make it appear that the transactions . . . were legitimate transactions, not an attempt to conceal . . . Schultz’s funds from his creditors.” (J.A. 449.) No. 07-3779 United States v. Bogart Page 4