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October 23, 2013


Sentencing considerations in criminal tax cases: an example

When someone is convicted of a criminal tax offense, judges have many factors to weigh that can bear on sentencing.

To be sure, federal sentencing guidelines provide a prescribed range. And both the prosecution and the defense can recommend a specific sentence. But it is up to the judge to actually impose the sentence after considering all of the input from the parties.

A recent sentencing of a business man on criminal tax evasion and other charges is a case in point.

Though the case is from Nevada, the types of considerations involved also apply in Texas and across the country.

The defendant in the case was a 63-year-old businessman who operated a company that offered a service involving shielding the names of the owners of corporations from state regulators. The company focused its efforts on U.S. states whose incorporation laws require little or no disclosure of actual owners.

The company, called Asset Protection Group, billed itself as an alternative to offshore tax havens and marketed itself aggressively.

Eventually, federal authorities charged the businessman with identity theft, tax evasion and conspiracy.

The man admitted that some of his company’s customers engaged in tax evasion. He also acknowledged that he had not paid all of his own taxes.

In a memorandum to the judge, however, he asked for leniency in his sentence based on several factors. One was the assistance he had offered to the government in pursuing some of the alleged co-conspirators in the case. The man also pointed out that he wanted to help take care of his elderly mother, who was 88 years old.

In addition, the man argued that this was his first offense and that he was ashamed of his conduct.

Due to these factors, the man asked for a six-year sentence. But prosecutors countered that the man had not really offered substantial assistance to them in pursuing changes against other defendants.

Ultimately, the federal judge imposed a nine-year sentence, as well as a multi-million dollar restitution order.

Source: USA Today, “Nine-year prison term for tax-avoidance scam,” Kevin McCoy, Oct. 16, 2013

Tax Crimes