Recently in Criminal Law Category

The United States Court of Appeals for the Ninth Circuit affirmed the conviction of an individual concluding and affirming the conclusion that documents the individual presented to the Internal Revenue Service were unlawful fictitious financial instruments.

In these economic times as reported and made a reality by our media, there is typically an onslaught of economic crime perpetrated by individuals desperate to escape their personal economic turmoil. Apparently, this taxpayer on two separate occasions submitted a document he titled a “sight draft” and a tax payment voucher for the amount of the draft to the IRS.   A sight draft is a valid instrument used in international trade. The document looks like a check, often requires no signature and is payable upon demand or presentment, hence the “on sight”.

The sight draft fraud is common amongst tax protestors and particularly tax protestor “redemptionists”.  You will like this one.  Redemptionists believe that the national debt is collateralized pro rata by each individual’s birth certificate and that each person has a mirror entity, a straw man, that represents the amount of work you do.  Redemptionists say there is a way to redeem your straw man and stake your claim to the debt.  As it goes, all you need to do is file your birth certificate along with the sight draft and you have redeemed your straw man and, I guess, released your collateralization of the national debt.  Thereafter you control your straw man and you can use the money from the sight draft to pay your mortgage or taxes.  Don’t try this at home.

 Anne Hathaway, The "Get Smart" actress ended her relationship with her boyfriend of four years, Raffaello Follieri last week amid reports that his charity was being probed by the New York Attorney General’s Office.

Yesterday, Follieri was indicted by prosecutors who claim he duped investors in his venture to buy Catholic Church properties in the United States by suggesting he had top Vatican contacts who could help him do business, going so far as to hire two monsignors to travel with him on deal-making trips. Those monsignors purportedly accepted monies in exchange for representing that they were higher Church officials in an effort to bolster Follieri’s fraud. Follieri is charged with multiple counts of fraud and money laundering.

One such fraud involved Follieri using his investors' money to fund an extravagant lifestyle with Hathaway. His “investor” was Ron Burkle, the supermarket magnate and modern day “RatPack” buddy to former President Clinton. Burkle had pursued a civil suit against Follieri earlier this year and recovered about $1.2M, but lost far more. Another investor, Canadian real-estate exec Michael Cooper, also reportedly gave millions to Follieri. Amongst his extravagances were an apartment in Trump Tower in Manhattan, designer and custom clothing and jewels, dentistry for his father (a convicted con-man) and gifts.

Newspaper accounts report that in recent months, Follieri repeatedly "stalled" on paying waiters and bartenders he hired for frequent celebrity-studded parties he threw with Hathaway at another luxurious apartment he rented in the Olympic Towers on Fifth Avenue. It was noted that at those parties, the two monsignors were constant guests.

The New York Archdiocese said they rejected Follieri property purchases because he made lowball offers. Other dioceses said he appeared suspicious to them or failed to follow through on promises in other cases. Follieri is accused of swindling up to $6 million and failed to post the $21 million bail. When arrested, Follieri had a ticket for a flight to Italy and planned to travel to Capri.

John M. Hanamirian

A Florida prison psychologist was sentenced to five years in prison for his role in an inmate personal income tax fraud scheme. In the alleged scheme, the psychologist accessed the Florida Department of Corrections database and obtained the names and other identifying information about other inmates in other prisons. The psychologist then gave that information to the inmates in his own prison and then those prisoners allegedly used that information to prepare and file false federal income tax returns claiming refunds. The total take: $902,000.00.

The IRS, in rapid response, announced a new cooperative effort to combat prison-based tax fraud:

“The prosecution of income tax refund crimes committed by prison inmates is important. …Participants in prison refund scams commit crimes against the nation’s tax systems.”

I am usually a proponent of  expansion of individual rights, but maybe prisoner’s tax returns get codes and any refund claims are picked up for at least a preliminary review at the Service Center where they are processed?

John M. Hanamirian

After four days of deliberations, a Detroit jury acquitted Jeffrey Feiger and his law partner of all charges, then went to a nearby bar to toast the victory with the defendants. “I hope,” said Feiger, “this puts an end to political prosecution in the age of Mr. Bush.” Added Feiger’s attorney, the legendary Gerry Spence, “This is one of the great moments in my life. … This is a nice way to end a career — representing a great lawyer who represents ordinary people.”

         Spence had argued that the prosecution was politically motivated. Ordinarily, a claim of reimbursement of political contributions is handled by the Federal Election Commission as a civil matter. At the trial, the FBI agent in charge of the investigation admitted to a preraid meeting of 80 to 100 agents who fanned out armed to the teeth to raid Feiger’s office and the homes of 40 of his employees. The agent conceded he could not recall such a well attended meeting in any comparable case.

Alan Milstein

     

          Well, according to some at his Manhattan Gym, investment banker Stuart Sugarman fit into that crowd. He was on a spinning bike grunting loudly and encouraging himself with shouts of “You go girl” and “Good burn, good burn.” Christopher Carter, not the X Files creator but another Wall Street type, was exercising nearby and reportedly told Mr. Sugarman to quiet down only to be told “Make me!” with an index finger as punctuation. Mr. Carter then lost it, grabbing Mr. Sugarman’s bike, pushing it against a wall, and tilting it. Mr. Sugarman fell from his perch and claimed neck and back injuries.

          The Manhattan District Attorney charged Mr. Carter with a misdemeanor count of assault. At closing arguments, the prosecutor told the jury, Mr. Sugarman probably was not someone “you would want to hang out with regularly.”

          Such advocacy notwithstanding, the New York jury found Mr. Carter not guilty.

Alan Milstein 

The police gave the young woman a breathalyzer and the 17-year-old recorded a .15 percent blood-alcohol level, twice the legal limit. The police report reveals that she told the officer who pulled her over, "I didn't drink! I was kissing a boy who was drunk."

The statement itself was iffy standing alone and got even shakier when the police officer found four full beer bottles under the passenger seat of her car and an empty beer can in her purse.  She was arrested. She pleaded not guilty. That will change. 

John M. Hanamirian

A trial for the ages is going on in Detroit. Geoffrey Fieger, who made his fame winning acquittals for Jack "Dr. Death" Kevorkian, and his partner Ven Johnson are on trial for their professional lives. Both are accused of recruiting 64 people, mostly employees of their law firm, to contribute $127,000 to the 2004 presidential campaign of John Edwards then reimbursing them out of law firm profits. Fieger doesn’t necessarily deny the facts the government is asserting; he claims ignorance that such payments were against the law.

        Fieger is represented by famed defense attorney Gerry Spence, now 79, who claims this is his last trial. Spence told the jury: “If the government can do this to Mr. Fieger, the government can do this to any of us." He argued that higher ups in the Justice Department were out to get Fieger, a 1998 Democratic candidate for governor, and sent 80 agents to raid his firm and confront his employees in the darkness of Nov. 20, 2005, as if Fieger and Johnson were mobsters or terrorists. "If it's a snippet, let's nip it," Spence said, adding that the Edwards campaign never gave the money back and that the IRS never reimbursed the law firm for the federal taxes it paid on the reimbursements, which it gave to employees in the form of salary bonuses. Spence said the government just wanted to nail "a name...a trophy...a big shot." 

           Responded Justice Department prosecutor Kendall Day: “Fieger thinks he's smarter than you are. No one is above the law, especially a lawyer."

Alan Milstein

The City of Canton, Ohio, wants to incarcerate high-grass violators.

Apparently, the Canton City Council wants to strengthen its existing high-grass and weeds law by making a second offense a fourth-degree misdemeanor, which is punishable by a fine of up to $250 and up to 30 days in jail.  

The existing law provides that more than 8 inches constitutes high grass or weeds. First-time violators now face a misdemeanor which carries up to a $150 fine and no jail time. The new law was prompted, at least in part, by the City’s Service Director who stated that the city is responsible for mowing about 2,400 lots which  he says costs the City a lot of money. The city spends $225,000 to $250,000 a year on cutting overgrown lots, estimated Councilman Greg Hawk who advocated taking a "hard line" on the issue.  Yes, take a hard line and lock up, clothe, feed and house the landscaping violators; no cost there.

John M. Hanamirian