Tax Fraud
Case Analysis
Jan.
22, 2007
The
decision is not the first in which the court has held that a district
court did not error in not grouping a tax fraud conviction with
another conviction.
The
decision is nevertheless noteworthy, because the argument in favor
of grouping is stronger in the case at bar than in the others.
In
U.S. v. Johnson, 117 F.3d 1040 (7th Cir.1997), the two convictions
were wholly unrelated; they weren’t even charged in the same
jurisdiction.
Likewise,
in U.S. v. Chavin, 316 F.3d 666 (7th Cir. 2002), the other conviction
was for a bankruptcy fraud that was unrelated to the tax fraud.
And in U.S. v. Brisson, 448 F.3d 989 (7th Cir. 2006), the tax
conviction was based on submitting a false claim for a return,
unrelated to a bank fraud conviction.
In
contrast, in the case at bar, the tax fraud consists of failing
to report the proceeds from the wire fraud. Effectively, in order
to retain the full benefit of the wire fraud, it was necessary
to not report it. The two convictions are thus much more closely
related than in the other three cases in which the court has rejected
grouping tax fraud convictions with other offenses, even if not
closely related enough to warrant grouping.
The
case is also significant for a discussion of enhancements, in
other cases where double counting may be an issue.
The
court wrote, “where a defendant faces separate counts for
the criminal activity that produced the unreported income and
for the tax crime, and double-counting is possible (unlike Vucko’s
case), the court can simply refrain from adding the sec. 2T1.1(b)(1)
two-level enhancement to the tax offense.”
Finally,
it is noteworthy that the court included dicta, suggesting that
double counting may never be a problem in tax evasion cases, citing
the Tenth Circuit’s decision in U.S. v. Peterson, 312 F.3d
1300, 1304 (10th Cir. 2002), for support.
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Main Story.
David
Ziemer can be reached by email.
