Justia White Collar Crime Opinion Summaries

In 1989, Bilzerian was convicted on nine counts of securities fraud, making false statements to the Securities and Exchange Commission, and conspiracy to commit certain offenses, and defraud the SEC and the Internal Revenue Service (IRS). The Southern District of New York sentenced Bilzerian to four years in prison, imposed a $1.5 million fine, and ordered him to disgorge $62,337,599.53.In 2012, Bilzerian’s wife, Steffen, filed a pro se complaint in the Claims Court seeking an $8,243,145 tax refund under 26 U.S.C. 1341. The dispute stems from transactions that Bilzerian made in 1985-1986 related to the purchase and sale of certain common stocks, for which he was convicted of securities fraud. Steffen and Bilzerian later filed a second amended complaint as joined parties.In 2018, the court dismissed that complaint with prejudice. The Federal Circuit affirmed. The plaintiffs cannot establish a reasonable belief of having an unrestricted right to the disputed funds when the money was first reported as income. A reasonable, unrestricted-right belief cannot exist where a taxpayer knowingly acquires the disputed funds via fraud. The “taxpayer’s illicit hope that his intentional wrongdoing will go undetected cannot create the appearance of an unrestricted right.” View "Steffen v. United States" on Justia Law