Tennessee Federal Criminal Lawyer Blog

As we approach the dreaded tax return filing season, the IRS is contemplating ways to crack down on those who would like to steal tax refunds. Reuters reports that in response to $130 million in stolen tax funds since last year, Florida Senator Bill Nelson has proposed new legislation that will allow the IRS to share tax return information with police. A pilot program in Tampa, Florida is being considered by the IRS due to the area being rampant with identity theft and tax refund fraud. The program would allow the IRS to share bogus tax return information with local law enforcement where fraud is suspected. Currently laws only allow the sharing of such information if the victim gives his or her permission.

The law that currently prevents the IRS from sharing taxpayer information has been on the books since 1976 when Congress made it a crime to disclose this confidential information. Nina Olson, national taxpayer advocate for the IRS, cautions that while some sharing may be necessary in some cases, there is a possibility that unauthorized parties could gain access to it. She proposes a modification of the 1976 law to allow access to the information but only for law enforcement purposes.

Privacy concerns are the main antagonist of the proposed law and program. As of yet, no date has been set for the Tampa pilot program to begin. However, if the program is successful, one should expect an increase in the number of criminal prosecutions for tax fraud.

According to the U.S. Attorney's Office for the Eastern District of Tennessee, a joint investigation by the U.S. Secret Service, Chattanooga Police Department, East Ridge Police Department, Metro Nashville Police Department, and Dalton, Georgia Police Department lead to a 39 count indictment against Chris Svetlinov Dragiev, of Kennesaw, Georgia, and Atanas G. Georgiev, of Atlanta, Georgia. The indictment included conspiring to use and possess counterfeit bank ATM cards, bank fraud, and aggravated identity theft.

The indictment alleges that the two conspired to obtain money from Regions Bank customers by using a "skimming" device attached to an ATM in East Ridge, Tennessee. Using the "skimmer" and Wal-Mart gift cards, the two were able to record the account and PINs onto the blank gift cards and use them to withdraw cash from various ATMs in Tennessee, North Carolina, and South Carolina. In October, the two were found in possession of 39 of these fraudulent ATM cards, as well as $3920 cash.

Dragiev and Georgiev potentially face up to 215 years imprisonment for counts 1-21, and 32 years imprisonment for counts 22-39. The two may also face severe fines, restitution and forfeitures in excess of $6,000,000.

In Southern Union Co. v. United States, No. 11-94 (2012), a federal court judge imposed fines of $6 million and $12 million for illegal storage of mercury by Southern Union Company. The decision has been appealed to the United States Supreme Court on the grounds that the judge ordered penalties that were inconsistent with the statute's maximums. The statute states a maximum penalty for the infraction is $50,000 per day. The jury in the federal court was not asked to make a decision on how many days the Southern Union Company violated the law.

The case has caused the Supreme Court to interpret the case of Apprendi v. New Jersey, 530 U.S. 466 (2000), as it relates to criminal fines. Apprendi held that the Sixth Amendment prevented judges from increasing prison sentences beyond statutory maximums based on facts that are not submitted to a jury. Now the Supreme Court must decide if they are willing to extend that logic to monetary fines.

According to the ABA Journal, government attorney Michael Dreeben supports the federal judge's decision stating that, "deprivations of life and liberty get greater protection than financial penalties." This ruling may have severe financial implications for those persons or entities facing potential criminal fines.

Abraham Lincoln is credited with saying, "He who represents himself has a fool for a client." I too have often thought the same thing when I hear of people venturing into the dangerous waters of criminal defense without a skilled lawyer. One such person to venture into these dangerous waters is Hiram Dane, who was convicted on four counts of felony tax evasion in Utah.

Up until 2 weeks ago, Dane had been on the lam for almost three years. In 2008, he was a pilot for SkyWest Airlines in Utah when he was arrested for four counts of felony tax evasion. The prosecution claimed that Dane failed to file tax returns for 2005 and 2006, and that he also falsified returns for other tax years.

Dane's case came to trial in 2009. He went pro se before the court during the morning session. He was due back in the afternoon but never showed. He was later convicted of tax evasion and failure to file a proper tax return. For close to three years, he has been on the run from authorities. In 2010, he registered a company called Bavarian Securities in Sanford, North Carolina. This act ultimately led to his arrest.

Dane made three mistakes that I hope no one else will make: 1) representing himself, 2) abandoning his defense in the midst of trial, and 3) fleeing. I can only imagine that Dane will receive no leniency from his sentencing judge upon his return to Utah, and he may face additional penalties and/or charges for fleeing and contempt of Court.

In United States v. Timothy Parkes, the Sixth Circuit Court of Appeals overturns a conviction in part due to prosecutorial misconduct based on statements by the prosecutor in closing argument. Parkes was originally convicted in Chattanooga, Tennessee, for ten counts of bank fraud.

While the Parkes case has a few interesting tidbits, the most interesting point relates to the conduct of the prosecutor in closing arguments. The Assistant U.S. Attorney concluded his rebuttal argument "with a wholly inappropriate statement to the jury," in which he warned that an acquittal would "let [Parkes and co-Defendant Mourier] keep the
$4 million." The Court writes that "The prosecutor made this statement even though he knew--and had earlier moved the district court to prevent the admission of evidence establishing--that Parkes and Mourier had already paid off most of the money that Remington had borrowed from Benton Bank."

The prosecutor stated in his rebuttal closing argument:

Your Government just wants you to do what is right. And if it's right to acquit [Parkes and Mourier], you do it, you let them keep the $4 million, you tell the government, "Shame on you for persecuting these poor people."

Such a statement was improper because a) the prosecutor knew the statement was false because Parkes had already repaid approximately $3.2 million to the bank, and b) the repayment of any monies (or failure to repay any monies) to the bank "would not be a reason to convict [Parkes] on the counts charged in the indictment." Ironically, prior to this closing argument, the prosecutor had moved to exclude any evidence that Parkes had repaid any monies to the bank. Every time Parkes attempted to introduce evidence of the repayment in trial, the prosecutor objected.

The Court concluded:

Yet incredibly, at the very end of the case, in the final words of an argument to which Parkes had no opportunity to respond, the prosecutor suggested--contrary to the very evidence the government had fought so hard to exclude--that Parkes would keep the Bank's money unless the jury found him guilty. All of which points us to one conclusion: The prosecutor's improper remark was not only misleading and highly prejudicial, it was deliberately made.

Fortunately, the Sixth Circuit reversed the decision of the trial court and vacated Parkes' conviction.