Justia White Collar Crime Opinion Summaries

Defendant divorced his wife in order to transfer assets fraudulently and avoid some tax liability. The district court set aside the separation agreement as a fraudulent transfer and proceeded to redivide and reallocate certain assets applying Massachusetts law. The government’s tax liens attached directly to any assets allocated to Defendant, but the government argued that its tax liens also attached indirectly to certain assets allocated to Defendant’s wife. This appeal concerned the district court’s allocation of two assets that the district court divided more or less evenly. The First Circuit vacated in part and affirmed in part, holding (1) with regard to funds that were directly traceable to the tax shelter that Defendant used to reduce his taxable income for several years, it was not clear whether the district court considered fourteen factors required by Massachusetts law in order to arrive at an equitable division of the parties’ assets; and (2) the government was not entitled to Defendant’s wife’s half of the proceeds from the sale of property owned by Defendant and his wife in Massachusetts on a lien-tracing theory. Remanded. View "United States v. Baker" on Justia Law

The Internal Revenue Service classified Ballard, a securities broker, as a non-filer in 2008 and investigated. Ballard lied about his income, hid money in family members’ bank accounts, and filed then dismissed several Chapter 13 bankruptcy petitions, attempting to avoid paying $848,798 in taxes arising from his income between 2000 and 2008. He eventually pled guilty to violating 26 U.S.C. 7212(a), which prohibits “corruptly . . . obstruct[ing] or imped[ing] . . . administration of [the tax laws].” Ballard urged the court to use the U.S.S.G. for obstruction of justice. The district court rejected Ballard’s argument that he never intended to evade paying his taxes but was merely delaying the payments and used the tax evasion guideline to calculate a higher offense level and an increase in the sentencing range from eight–14 months to 24–30 months. Ballard was sentenced to 18 months’ incarceration. The Sixth Circuit affirmed. What matters in the choice between guidelines sections is which section is more precisely tailored to reflect offense characteristics—like tax evasion and tax loss—and which section covers a more closely related group of crimes. What Ballard did, and what the government charged, was a lie to the tax collector about his earnings. View "United States v. Ballard" on Justia Law

After a bench trial, defendant-appellant Eldon Boisseau was convicted of tax evasion The district court determined that Boisseau, a practicing attorney, willfully evaded paying his taxes by: (1) placing his law practice in the hands of a nominee owner to prevent the Internal Revenue Service (IRS) from seizing his assets; (2) causing his law firm to pay his personal expenses directly given an impending IRS levy, rather than receiving wages; and (3) telling a government revenue officer that he was receiving no compensation from his firm when in fact the firm was paying his personal expenses. On appeal, he challenged the sufficiency of the evidence and argued that the district court wrongly convicted him: (1) without evidence of an affirmative act designed to conceal or mislead; and (2) by concluding that proof satisfying the affirmative act element of tax evasion was sufficient to prove willfulness. Finding no reversible error, the Tenth Circuit affirmed. View "United States v. Boisseau" on Justia Law

Defendant, the owner and operator of a freight service that couriered items to and from the United States and Canada, was found guilty of nine counts of tax-related offenses. Defendant was charged with violating 26 U.S.C. 7212(a), which imposes criminal liability on one who ʺcorruptly or by force or threats of force . . . endeavors to intimidate or impede any officer or employee of the United States acting in an official capacity under this title.” Another portion of the statute, often referred to as the ʺomnibus clause,ʺ imposes criminal liability on one who ʺin any other way corruptly . . . obstructs or impedes, or endeavors to obstruct or impede, the due administration of this title.ʺ On appeal, defendant argued that the court, like the Sixth Circuit, should construe the phrase ʺthe due administration of this titleʺ in the omnibus clause to include only a pending IRS action of which a defendant was aware. The court rejected defendant's argument and joined three of its sister circuits in concluding that section 7212(a)ʹs omnibus clause criminalizes corrupt interference with an official effort to administer the tax code, and not merely a known IRS investigation. The court also concluded that an omission may be a means by which a defendant corruptly obstructs or impedes the due administration of the Internal Revenue Code under section 7212(a). Finally, the court concluded that the district court did not commit procedural error by using the manner of calculating the tax loss and restitution amounts that it did, or by deciding not to apply a two‐level reduction to defendant's base offense level for acceptance of responsibility. Accordingly, the court affirmed the judgment. View "United States v. Marinello" on Justia Law

Years after Steven Greenfield was implicated in tax evasion as a result of a document leak, the Government issued a summons for Greenfield’s records, including documents relating to all of Greenfield’s financial accounts and documents pertaining to the ownership and management of offshore entities controlled by Greenfield. Greenfield opposed production and moved to quash the summons based on his Fifth Amendment right against self-incrimination. The district court granted enforcement as to a subset of the records demanded by the summons. The court found that, for all but a small subset of the documents covered by the order, the Government has not demonstrated that it is a foregone conclusion that the documents existed, were in Greenfield’s control, and were authentic even in 2001. Second, the court found that the Government has failed to present any evidence that it was a foregone conclusion that any of the documents subject to the summons remained in Greenfield’s control through 2013, when the summons was issued. Accordingly, the court vacated the district court's order and remanded, because the Government has not made the showing that is necessary to render Greenfield’s production of the documents non-testimonial and, hence, exempt from Fifth Amendment challenge. View "United States v. Greenfield" on Justia Law

The Bickarts prepared and filed an income tax return containing false income and withholding amounts, supported by fabricated 1099‐OID forms, appearing to come from major financial institutions. The IRS paid a claimed refund of $115,412. Their legitimate refund would have been $263. The IRS discovered the fraud and sent a bill for $217,923. For years, the Bickarts engaged in obstructive conduct, sending a 1040‐V payment coupon and continuing to insist that the bill had been paid. They made baseless accusations against IRS agents. They were convicted of conspiring to file and filing a false claim to defraud the government, 18 U.S.C. 286 and 287. The Bickarts represented themselves at trial, asserting “sovereign citizen” claims and making nonsensical accusations. The PSR applied a two‐level enhancement for sophisticated means based on the fictitious Forms 1099‐OID and a two‐level enhancement for obstruction of justice, resulting in a guidelines imprisonment range of 33-41 months. Neither objected to the calculations. The court sentenced each defendant to 24 months in prison. Defendants objected to supervised release conditions requiring them to notify third parties of risks related to their criminal history when directed by the probation office. The court modified it to require the probation office to seek court approval. They also objected to the condition permitting a probation officer to visit them at home or at work at any reasonable time. The court overruled the objection. The Seventh Circuit vacated the third‐party notification condition, but otherwise affirmed the remaining conditions of supervised release and sentence. View "United States v. Bickart" on Justia Law

From 1997-2001, Nacchio served as Qwest's CEO. Based on 2001 stock trades, Nacchio reported a net gain of $44,632,464.38 on his return and paid $17,974,832 in taxes. In 2007, Nacchio was convicted of 19 counts of insider trading, 15 U.S.C. 78j, 78ff. Following a remand, the court resentenced Nacchio to serve 70 months in prison, pay a 19 million dollar fine, and forfeit the net proceeds, $44,632,464.38. Nacchio settled a concurrent SEC action, agreeing to disgorge $44,632,464. Nacchio’s criminal forfeiture satisfied his disgorgement obligation. The Justice Department notified participants in private securities class action litigation or SEC civil litigation concerning Qwest stock that they were eligible to receive a remission from Nacchio’s forfeiture. Nacchio sought an income tax credit of $17,974,832 for taxes paid on his trading profits. The IRS argued that his forfeiture was a nondeductible penalty or fine and that he was estopped from seeking tax relief because of his conviction. The Claims Court held that Nacchio could deduct his forfeiture payment under Internal Revenue Code 165, but not under I.R.C. 162 and was not collaterally estopped from pursuing special relief under I.R.C. 1341. The Federal Circuit reversed as to section 165;Nacchio failed to establish that his forfeiture was not a “fine or similar penalty.” Because establishing deductibility under another section of the code is a prerequisite to pursuing relief under section 1341, Nacchio cannot pursue a deduction under that section. View "Nacchio v. United States" on Justia Law

From 2002 to 2007, Defendant-appellant Jerold Sorensen, an oral surgeon in California, concealed his income from the Internal Revenue Service (“IRS”) and underpaid his income taxes by more than $1.5 million. He used a “pure trust” scheme, peddled by Financial Fortress Associates (“FFA”), in which he deposited his dental income into these trusts without reporting all of it to the IRS as income. Over the years, he also retitled valuable assets in the trusts’ names. In 2013, after a series of proffers, the government charged him with violating 26 U.S.C. 7212(a) for corruptly endeavoring to obstruct and impede the due administration of the internal-revenue laws. A jury convicted him of the charged offense. On appeal, Sorensen argued his conduct amounted to evading taxes so it was exclusively punishable under a different statute; that the prosecution misstated evidence in its closing rebuttal argument; and (7) cumulative error. Furthermore, he argued the district court erred: (2) by refusing his offered jury instruction requiring knowledge of illegality; (3) by giving the government’s deliberate-ignorance instruction; (4) by instructing the jury that it could convict on any one means alleged in the indictment; and (5) by refusing to allow him to provide certain testimony from a witness in surrebuttal. Finding no merit to any of these contentions, the Tenth Circuit affirmed Sorensen's conviction. View "United States v. Sorensen" on Justia Law

In 2009, Clarke submitted 2006-2008 tax returns for a trust, each claiming $900,000 in income and $900,000 in fiduciary fees; they did not identify the income’s source. Each reported $300,000 of tax paid to the IRS and requested $300,000 in refunds. Clarke identified the trust’s fiduciary as “Timothy F. Geither” (an apparent misspelling of the name of then-Treasury Secretary, Geithner), which raised a red flag. The IRS notified Clarke that the returns would not be processed. Clarke resubmitted, but did not name “Geither.” The IRS mailed Clarke three $300,000 checks. Clarke opened a bank account, deposited the checks, and, within months, spent all of the funds. In 2013 Clarke was indicted on seven counts of presenting false claims. The manager of the check cashing company where Clarke tried to cash his first check, testified that Clarke told him that he had the check because of “a trust fund because his dad had passed.” Clarke argued that the government had not proven that he knew the claim was false. The court did not include a good faith jury instruction requested by Clarke. Though barred from trial, a psychiatric report explained that Clarke believed that the U.S. is a business front designed to regulate commerce and has established bank accounts for its citizens. The Seventh Circuit affirmed Clarke’s conviction. View "United States v. Clarke" on Justia Law

Anzaldi, DeSalvo, and Latin concocted an $8 million fraudulent tax scheme based on a sovereign citizen-type theory that the U.S. government holds hidden bank accounts for its citizens that can be accessed through various legal maneuvers. By filing false tax returns, the three requested more than $8 million for themselves and others in tax refunds. The IRS accepted five of their returns, paying out more than $1 million in refunds before catching onto the scheme. A jury convicted all three of conspiracy to file false claims, 18 U.S.C. 286 and filing false claims upon an agency of the United States, 18 U.S.C. 287. Anzaldi and Latin appealed their convictions. The Seventh Circuit affirmed, rejecting Anzaldi’s claim that the court should have ordered a competency examination pursuant to 18 U.S.C. 4241(a) before allowing her to represent herself pro se; upholding admission of evidence of how Anzaldi structured her fees to be under $10,000; and rejecting a claim that the court erred by not instructing the jury that willfulness was required to convict, and instead instructing that the defendants had to have acted “knowingly.” View "United States v. Latin" on Justia Law