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Grand Jury Returns Indictment Against Virginian for Conspiracy and Tax-Related Offenses
On July 10, 2011 the U.S. Attorney’s Office for the Eastern District of Virginia announced that a federal grand jury has indicted Jeffrey Charles, of Mathews County, Va., for conspiring with his daughter and son-in-law to defraud the United States. The docket also indicates that a warrant has been issued in this matter.
According to the indictment, Charles conspired with his daughter and son-in-law to impair and impede the IRS in ascertaining, computing, assessing and collecting federal income taxes. The government charged this count under the general conspiracy statute, 18 U.S.C. 371. General conspiracy makes it a crime for two or more persons to agree to work together to commit any federal crime, so long as the participants in the conspiracy undertake any act, commonly referred to as an overt act, to further the underlying criminal activity. This overt act itself does not have to be a criminal act or illegal. Accordingly, in its indictment, the government alleges no less than 21 overt acts in furtherance of the alleged conspiracy to defraud the United States of tax revenue.
The indictment also alleges that Charles aided and assisted in the preparation of three false tax returns in his daughter’s name for tax years 2000, 2001, and 2005, and attached false documents to each tax return. The statute, 26 U.S.C. 7206(2), makes it a criminal offense for anyone to assist in the filing of a false return. The statute specifically disregards whether or not the fraudulent information or falsity was included with the knowledge or consent of the person authorized or required to present the documents to the IRS. Therefore, tax preparers can be liable for this offense even if the taxpayer himself intentionally produced false or fraudulent information. In such a scenario the tax preparer would have to demonstrate that they could not have reasonably known the information presented to them was false.
As alleged in the indictment, Charles also filed a false tax return in his own name for tax year 2006 in which he allegedly falsely reported earning $0.00 income. Since this count is with regards to Charles’ own tax return, the count is charged as 26 U.S.C. 7206(1), which targets the actual taxpayer or the person obligated to file, not the preparer.
An interesting note about this case is that according to the indictment Charles was affiliated with an organization known as the American Rights Litigators (ARL) (a.k.a. the Guiding Light of God Ministries). The organization is a tax protest group located in Lake County, Florida. As alleged in the indictment, Charles utilized materials provided by this organization to fulfill his alleged criminal endeavors.
However, it may be constitutionally improper for the government to use Charles’ affiliation with this group against him at trial. Using someone’s political affiliations against them in the court of law gets dangerously close to offending the First Amendment. Therefore, defense counsel in this matter should probably attempt to limit its usage in court and look into whether the investigation into Charles was originally initiated due to his association with this protest group.
The author of this blog is Erich Ferrari, an attorney specializing in Federal Criminal Defense matters. If you have any questions please contact him at 202-280-6370 or ferrari@ferrari-legal.com.
Former Virginia Man Sentenced for Bank Fraud and Identity Theft Scheme Targeting Young Navy Sailors
On June 6, 2012 the U.S. Attorney for the Eastern District of Virginia announced that Lionel Jason Haynes was sentenced to seven years and three months in prison for bank fraud (18 U.S.C. 1344) and aggravated identity theft (18 U.S.C. 1028A(c)). He was also ordered to pay $181,960 in restitution.
According to court documents and proceedings, Haynes, a former Navy sailor, executed a scheme to defraud Navy Federal Credit Union (NFCU) by victimizing young, impressionable sailors. Posing as a Chief Petty Officer, Navy SEAL or as a representative of the Navy’s Fleet and Family Services Center, Haynes would approach a sailor on Navy Base Norfolk and offer assistance to help him purchase a car.
He would ask for their personal identifying information and bank account information under the pretense of needing it to determine pre-approval for an auto loan. Once he received this information, he accessed their NFCU bank account, requested an auto loan, and changed the mailing address to an address to which he had access. He received the check, wrote down the fraudulent vehicle information, forged their name, and had an associate (the purported seller) cash the check. He victimized 14 different sailors in this manner.
In its sentencing memorandum the government requested 60 months’ imprisonment for bank fraud, plus 24 months for identity related fraud. Although the defense moved for a downward departure, it is apparent that no such departure was granted by the sentencing judge. Mr. Haynes was sentenced to exactly what was requested by the government and prescribed in the U.S. Sentencing Guidelines. Unfortunately for Mr. Haynes his request to have his identity theft conviction run concurrently was denied, probably because the statute specifically prescribes the sentence to run consecutively. As such, instead of serving 5 years and 3 months in prison, he will serve 7 years and three months.
Not all was lost however. According to sentencing documents the judge did grant Mr. Hayne’s request to be placed in a prison near his family in New York and ordered him to continue his education while in prison. Court documents made it clear that Mr. Haynes was in college during the sentencing phase of the case.
This case was investigated by the Navy Criminal Investigative Service (NCIS) and prosecuted by the U.S. Attorney’s Office of the Eastern District of Virginia.
The author of this blog is Erich Ferrari, an attorney specializing in Federal Criminal Defense matters. If you have any questions please contact him at 202-280-6370 or ferrari@ferrari-legal.com.
