Michael I. O'Daniel

[Famspear]

Remember Michael I. O'Daniel? He's the chiropractor who, according to Tim Whitney ("databrain") at lost horizons, is a follower of Peter E. ("Blowhard") Hendrickson's Cracking the Code tax scam.

See:

viewtopic.php?f=8&t=6173

O'Daniel was indicted on June 23, 2010, in the United States District Court for the Western District of Virginia in Charlottesville (case no. 3:10-cr-00017), on one count of corrupt or forcible interference under 26 USC 7212(a), four counts of fraud and false statements under 26 USC 7206(1), and three counts of uttering fictitious obligations with intent to defraud under 18 USC 514(a)(2).

The trial had been set to begin December 13th. Now, it appears that a hearing is set for Monday, December 6th on some sort of guilty plea.

[LPC]

Remember Michael I. O'Daniel? He's the chiropractor who, according to Tim Whitney ("databrain") at lost horizons, is a follower of Peter E. ("Blowhard") Hendrickson's Cracking the Code tax scam.

Nope. No recollection.

O'Daniel was indicted on June 23, 2010, in the United States District Court for the Western District of Virginia in Charlottesville (case no. 3:10-cr-00017), on one count of corrupt or forcible interference under 26 USC 7212(a),

I.e., he wrote some letters letting some IRS employees know about the consequences of their dishonest, corrupt, and treasonous practices.

four counts of fraud and false statements under 26 USC 7206(1),

I.e., he filed "CtC-educated returns."

and three counts of uttering fictitious obligations with intent to defraud under 18 USC 514(a)(2).

I.e., he jumped the reservation and wrote "bills of exchange" to "pay" his tax debts.

The trial had been set to begin December 13th. Now, it appears that a hearing is set for Monday, December 6th on some sort of guilty plea.

Wimp. No "owl" for you.

[.]

I wonder what would happen if the Blowhard ever wound up with one of his marks as a cell-mate.

Unlike ethnic gang members who are kept away from other groups, the BoP might have to keep CtC "gang" members away from each other or at least away from the Blowhard to prevent intra-cult violence.

Good thing there aren't enough incarcerated Schiffites or 861ers to form a gang. Can't you just imagine the insults revolving around 26 USC they would hurl at each other in the yard?

[wserra]

I wonder what would happen if the Blowhard ever wound up with one of his marks as a cell-mate.

The Blowhard threw a party at the FCI,
The LostHeads were there and they began to cry.
"We listened to the Blowhard and now we're done.
We shoulda stayed with ol' eight-six-one."

Whatta 'tard. Everybody, whatta 'tard.
Everybody in the prison yard
Was callin' Pete a frickentard.

Hey, it's early.

I note the federal PD represents O'Daniel. I propose a new FRCrP: no tax cheat gets a taxpayer-paid lawyer. Retain, or go pro se.

Now how can we get around Gideon?

[Gregg]

I wonder what would happen if the Blowhard ever wound up with one of his marks as a cell-mate.

The Blowhard threw a party at the FCI,
The LostHeads were there and they began to cry.
"We listened to the Blowhard and now we're done.
We shoulda stayed with ol' eight-six-one."

Whatta 'tard. Everybody, whatta 'tard.
Everybody in the prison yard
Was callin' Pete a frickentard.

Hey, it's early.

I note the federal PD represents O'Daniel. I propose a new FRCrP: no tax cheat gets a taxpayer-paid lawyer. Retain, or go pro se.

Now how can we get around Gideon?

I can hear the crackheads now.

He wasn't guilty and would have walked for sure, but as soon as he accepted a public defender, he was exercizing a federal privilege and so he was liable for the tax. And besides, any lawyer, PD or private, is part of the corrupt BAR and owes allegence only to the banksters, the system and the shape shifting lizards of the British Royal family

[LPC]

From the original thread on O'Daniel:

The indictment charges, among other things, that O'Daniel filed false Form 1040 returns (A) for 2001 (wherein he falsely reported his income as being only $20 and included fifteen "corrected" Form 1099 reports showing "zero" income); (B) for 2002 (wherein he falsely reported his income as being only $17 and included twenty-nine "corrected" Form 1099 reports showing "zero" income); (C) for 2003 (falsely reported income as $140 and seventeen "corrected" 1099s); and (D) similar acts for his 2004 Form 1040.

It didn't occur to me before, but I'm wondering why a chiropractor would get so many 1099s. Form 1099-MISC is only required for payments made in the course of a trade or business, so the forms aren't coming from the patients. Do health insurance companies issue 1099s to doctors? Or are there employers paying their employees' medical bills through some sort of unreimbursed medical expense plan?

[ArthurWankspittle]

It didn't occur to me before, but I'm wondering why a chiropractor would get so many 1099s. Form 1099-MISC is only required for payments made in the course of a trade or business, so the forms aren't coming from the patients. Do health insurance companies issue 1099s to doctors? ...

Insurers issuing them would make sense. They would treat the medical practitioner as a subcontractor and each insurer he dealt with would issue 1099s for the total they'd paid him during the year. There's probably some "not an employee" type reason in there too.

[Imalawman]

From the original thread on O'Daniel:

The indictment charges, among other things, that O'Daniel filed false Form 1040 returns (A) for 2001 (wherein he falsely reported his income as being only $20 and included fifteen "corrected" Form 1099 reports showing "zero" income); (B) for 2002 (wherein he falsely reported his income as being only $17 and included twenty-nine "corrected" Form 1099 reports showing "zero" income); (C) for 2003 (falsely reported income as $140 and seventeen "corrected" 1099s); and (D) similar acts for his 2004 Form 1040.

It didn't occur to me before, but I'm wondering why a chiropractor would get so many 1099s. Form 1099-MISC is only required for payments made in the course of a trade or business, so the forms aren't coming from the patients. Do health insurance companies issue 1099s to doctors? Or are there employers paying their employees' medical bills through some sort of unreimbursed medical expense plan?

It would be insurance payment and any medicare/medicaid payments as well. I've seen some doctors and chiros with a multitude of 1099's. Fortunately, medicare and medicaid usually just issue one 1099.

[grixit]

Back around 1978 i had a chiropracter for a customer. Being 1978, the big thing in computers at that point was 4 top japanese firms agreeing on a common platform for a 64K machine running CP/M. That was going to be the future, Hahahahahaha! Anyway, the office seemed to be doing more paperwork than chiropracting and it was all built around worker's comp. I quickly gained the suspicion that he was just offering cover for fraud. I would imagine that in such a setup, everyone would prefer the business connections to be as loose as possible.

[Joey Smith]

No "owl" for you.

KEYBOARD WARNINGS, PLEASE!

[Famspear]

On December 6, 2010, Michael O'Daniel pleaded guilty to corruptly endeavoring to obstruct under IRC section 7212(a) - count one of the indictment. The maximum potential sentence would be 3 years and a $250,000 fine.

He pleaded guilty to presenting a false fictitious instrument under 18 USC section 514 - count six of the indictment. The maximum potential sentence would be 25 years and a $250,000 fine.

Sentencing is set for March 21, 2011.

The tax loss was stipulated to be at least $80,000 but less than $200,000.

Apparently, the prosecution is recommending a sentence in the lower end of the possible range.

[Famspear]

On March 24, 2011, Virginia chiropractor Michael O'Daniel was sentenced to one year and a day in prison after having pleaded guilty to one count of attempting to interfere with the administration of the internal revenue laws under 26 USC section 7212(a) and one count of uttering a fictitious obligation under 18 USC section 514(a)(2). He was fined $4,000 plus an assessment of $200. No restitution.

As part of the plea deal, various charges (including four counts of filing false tax returns) were dropped.

The case is United States v. Michael I. O'Daniel, case no. 3:10-cr-00017-nkm-1, in the U.S. District Court for the Western District of Virginia (Charlottesville Div.).

As Tim Whitney (or "databrain") at the lost horizons web site has indicated, it appears that O'Daniel was a follower of Pete Hendrickson. He also was influenced by Joe Banister and Clifton Beale.

This is what Tim Whitney wrote at losthorizons on August 2, 2010:

Folks,

I know of one case in Virginia that is something everyone should take into consideration.

A friend filed several years both CTC and other. The aunties sent agents to his business and scared him into settling. He sold virtually everything to get the $$$ together and he is still making payments.

Now, he is being hauled into Criminal Court. He believes he managed to * them off...so after having their way with him in Tax Court, getting a boat load of money, they are now going to get him on felony charges.

The thing to take away from this is simple - auntie will do what they want when they want to, and to whom they want to. Thus, IMHO turning away from the Truth and taking the route they want you to take does not help you - it may even set you up for more trials & tribulations.

Of course - only you can decide what the Truth is...and how you will deal with it. However, expecting a beast not to follow it's [sic] nature...because you fed it a morsel...is like trying to tickle a shark - on the inside.

Regards,

Tim

http://www.losthorizons.com/phpBB/viewtopic.php?t=2637

The following is an excerpt from a memorandum filed by O'Daniel's lawyer on March 15, 2011, in which O'Daniel had asked the Court to sentence him to 30 days:

Good people sometimes make a serious mistake, but they should not be judged based solely on that mistake. Defendant Michael I. O’Daniel is a good man, an excellent father, a caring chiropractor, and an involved citizen. He was duped by “tax protesters,” people who claim to have special knowledge about the federal tax code. He bought into their advice and ran afoul of the Internal Revenue Service (“IRS”). The Government charged O’Daniel in an eight count Indictment with various tax offenses. He pled guilty to two charges: corruptly endeavoring to impede the function of the IRS and passing a fictitious instrument. Based on the factors in 18 U.S.C. § 3553(a), O’Daniel is seeking a variance from the advisory Sentencing Guidelines range.

[ . . . .] in or around 2000, O’Daniel began attending seminars and reading literature regarding the federal income tax. The authors and presenters, including Joe Banister [footnote omitted], Clifton Beale [footnote omitted], and Peter Hendrickson [footnote 3: "Hendrickson authored “Cracking the Code,” a treatise assailing the constitutionality of the tax code. A website that promotes “Cracking the Code” reports that those who have followed Hendrickson’s advice have taken back from the IRS over $10,000,000 in wrongly assessed taxes....."], held themselves out to have special knowledge of the tax laws, and they advised O’Daniel and others that the federal income tax was unconstitutional. They based their positions primarily on taking portions of written opinions from the United States Federal Courts and federal statutes and presenting them as authoritative pronouncements on the invalidity of the tax code. Through seminars, websites and other materials, these tax protesters also provided templates of documents to send to the IRS in order to contest application of the federal tax laws. O’Daniel bought into the positions of these tax protesters and relied on the information they provided. He used form letters, pleadings, and other statements to create many of the documents he sent to the IRS.

In 2004, O’Daniel filed a 1040 return and reported zero income. He attached a statement explaining that he had no income in the “constitutional sense” because he had not received corporate profits. After receiving notices of tax delinquency from the IRS, O’Daniel submitted three foreign bills of exchange purporting to satisfy the delinquency. O’Daniel obtained the template for these foreign bills of exchange through a tax protester seminar conducted by Cindy Beers. In February and June of 2006, O’Daniel filed 1040 returns for tax years 2001 to 2004. He also changed the 1009 forms that had been submitted by various companies for income they paid to him so that the forms indicated he had received zero income. He again explained that his earnings were not income through a trade or business.

During his dealings with the IRS, agency employees advised O’Daniel that his positions on the tax code were contrary to the law. However, O’Daniel had been attending seminars and reading literature that told him the IRS was misapplying the law. In December 2005, O’Daniel filed a request with the IRS for a due process hearing. He argued that his earnings were not income, an argument the IRS rejected. O’Daniel appealed the decision, but it was upheld in December 2006.

In July 2006, O’Daniel consulted an accountant, Michael Hepworth. Hepworth advised O’Daniel that his position on the tax laws was not supported by the law. O’Daniel was unhappy about this advice and did not initially agree with Hepworth. Even so, he began to realize that he had essentially been misled.

O’Daniel’s only wayward conduct after consulting with Hepworth occurred on March 12, 2007, when he filed a lawsuit against the IRS to contest a lien that it had placed on his house. The complaint was a form pleading that he had obtained from the tax protester materials. On April 25, 2007, O’Daniel voluntarily dismissed the lawsuit, see Michael O’Daniel v. Executive in Charge of the Local Office in Charlottesville, et al., 3:07CV18 (W.D. Va.). As a result of the lien, the IRS seized approximately $77,000 from the sale of O’Daniel’s home. This amount has been applied to offset a portion of his tax liability.

In March 2007, IRS special agents interviewed O’Daniel. He admitted that he had filed tax returns that stated he had zero income. He explained that his definition of income came from the tax code and Supreme Court opinions. In April, O’Daniel contacted the agent and expressed an interest in trying to resolve the situation. He said he wanted to file his taxes properly.

O’Daniel explained that he had been “conned” by “Tax Honesty Groups” and people like Joe Banister. In August 2008, O’Daniel agreed to another interview with IRS investigators. He provided more information about the tax advice he had received from Cindy Beers and Hendrickson’s “Cracking the Code.”

In or around the Spring of 2007, O’Daniel hired an accountant, Ronald Mohl, to assist in amending and resubmitting his 1040 returns for 2001 to 2005. In May 2007, O’Daniel resubmitted corrected 1040 returns. These returns did not include payments that O’Daniel had received from another chiropractor for use of his office space, so O’Daniel submitted corrected 1040 returns in September 2008. Mohl also assisted in preparing O’Daniel’s 1040 returns for 2006 to 2009. [footnote omitted]

O’Daniel realizes that his position on the tax laws was wrong. In plea agreement, O’Daniel agreed to cooperate with IRS in resolving tax liability. He has repaid $77,000 to the IRS through the sale of property to which the IRS had attached a lien. O’Daniel recognizes that he has additional tax liability, and as a step toward extinguishing his liability, O’Daniel has been saving money throughout the course of this case....

Fifty-seven year old Michael O'Daniel is now inmate number 15255-084 at the Federal Correctional Institution at Cumberland, Maryland. His projected date of release is March 1, 2012.

And so it goes.....

[Imalawman]

And TP's wonder why we aren't very patient with their crap. People's lives get ruined by this stuff, it's not just fun and games. Petey should have received more time than he got - his stupidity brought down a lot of people.

[Famspear]

And TP's wonder why we aren't very patient with their crap. People's lives get ruined by this stuff, it's not just fun and games. Petey should have received more time than he got - his stupidity brought down a lot of people.

Yes. For example: If I recall correctly, O'Daniel has been caring for his wife, who has multiple sclerosis. I believe that was brought out in the memorandum I cited above, in portions that I did not reproduce. Hendrickson's criminality affected O'Daniel, which in turns affects O'Daniel's loved ones.

Who is taking care of Mrs. O'Daniel now? And who is to blame for this mess? Not IRS employees, or DOJ employees, or federal judges. The people to blame are Mr. O'Daniel and Mr. Hendrickson.

[ASITStands]

And TP's wonder why we aren't very patient with their crap. People's lives get ruined by this stuff, it's not just fun and games. Petey should have received more time than he got - his stupidity brought down a lot of people.

Yes. For example: If I recall correctly, O'Daniel has been caring for his wife, who has multiple sclerosis. I believe that was brought out in the memorandum I cited above, in portions that I did not reproduce. Hendrickson's criminality affected O'Daniel, which in turns affects O'Daniel's loved ones.

Who is taking care of Mrs. O'Daniel now? And who is to blame for this mess? Not IRS employees, or DOJ employees, or federal judges. The people to blame are Mr. O'Daniel and Mr. Hendrickson.

And, that's one reason to ask "why" Hendrickson's sentence was not enhanced further?

It's the lives destroyed by tax protester theories that cost society in the end.

EDIT: I'd like to read that memorandum without having to download from Pacer if you can post it somewhere. Otherwise, I'll look to see if Recap has it available. What say you?

[Famspear]

......I'd like to read that memorandum without having to download from Pacer if you can post it somewhere. Otherwise, I'll look to see if Recap has it available. What say you?

Here you go....

DEFENDANT'S SENTENCING MEMORANDUM

Good people sometimes make a serious mistake, but they should not be judged based solely on that mistake. Defendant Michael I. O’Daniel is a good man, an excellent father, a caring chiropractor, and an involved citizen. He was duped by “tax protesters,” people who claim to have special knowledge about the federal tax code. He bought into their advice and ran afoul of the Internal Revenue Service (“IRS”). The Government charged O’Daniel in an eight count Indictment with various tax offenses. He pled guilty to two charges: corruptly endeavoring to impede the function of the IRS and passing a fictitious instrument. Based on the factors in 18 U.S.C. § 3553(a), O’Daniel is seeking a variance from the advisory Sentencing Guidelines range.


I. STATEMENT OF FACTS

Michael O’Daniel is 57 years old. He has been a chiropractor since 1977, beginning his
practice in Florida. In 1981 he married Claire O’Daniel. They had one child, Sarah. Claire also had a son, Jeremy Collins, from a previous relationship. Although Claire and O’Daniel divorced in 1985, he and Jeremy continued their father-son relationship. O’Daniel also continued to raise his daughter. Both Sarah and Jeremy attest that O’Daniel is an involved, wonderful, and loving father. (Sara O’Daniel Letter.)

In 1994 O’Daniel moved to Virginia. From then until 2000, O’Daniel did not work much because he was taking care of his mother who had Alzheimer’s disease, and he was recovering from injuries sustained in a traffic accident. In 2000 O’Daniel purchased the Warrenton Chiropractic Clinic and began practicing full time again. He has used his chiropractic skills to improve the lives of many patients. (Erin Price Letter.) A vegetarian himself, O’Daniel also counsels clients about nutrition and healthy lifestyles. For clients who cannot afford to pay for his services, O’Daniel offers free and reduced rate chiropractic care. (Michael Gimble Letter; Ray Bernot Letter.) Over the years, O’Daniel has developed a strong relationship with his patients, and they seem to genuinely appreciate his services. (Id.; Sara O’Daniel Letter; Erin Price Letter.) O’Daniel has been heavily involved in community service inWarrenton. Through the Leadshare program, he has counseled other business owners regarding starting up and marketing a business. (Karen Henderson Letter.) He also volunteers his time and assistance for local charities, including Hospice of the Rapidan, the Fauquier Family Shelter, and Toys for Tots. (Id.) In 2005, O’Daniel and Maria Malca married. The following year, Malca was diagnosed with multiple sclerosis (“MS”). To help her combat the symptoms of MS, O’Daniel has researched what nutritional supplements she should take, and he administers her daily shots of medicine. (Maria Malca Letter.) He is integral to her care and maintenance.

Turning to the offense conduct, in or around 2000, O’Daniel began attending seminars and reading literature regarding the federal income tax. The authors and presenters, including Joe Banister, [footnote 1: Banister is an ex-IRS special agent who presents himself as a “whistleblower,” informing the public that the federal income tax laws are unconstitutional. To disseminate his message, Banister, among other things, maintains a website, http://www.freedomabovefortune.com, and in 2007 he and U.S. Representative Ron Paul were interviewed on CNBC about their views on the federal tax laws, http://www.youtube.com/watch?v=-PvaNWrkFeQ.], Clifton Beale, [footnote 2: Beale is another former IRS agent and “whistleblower.” See http://www.irsarmory.com/read/wistleblowers.htm. Among other things, he presents a speech entitled, “How Is The IRS Robbing the American People?”. See http://livefreenow.tv/past-conferences/ ... beale.html.] and Peter Hendrickson, [footnote 3: Hendrickson authored “Cracking the Code,” a treatise assailing the constitutionality of the tax code. A website that promotes “Cracking the Code” reports that those who have followed Hendrickson’s advice have taken back from the IRS over $10,000,000 in wrongly assessed taxes. See http://losthorizons.com], held themselves out to have special knowledge of the tax laws, and they advised O’Daniel and others that the federal income tax was unconstitutional. They based their positions primarily on taking portions of written opinions from the United States Federal Courts and federal statutes and presenting them as authoritative pronouncements on the invalidity of the tax code. Through seminars, websites and other materials, these tax protesters also provided templates of documents to send to the IRS in order to contest application of the federal tax laws. O’Daniel bought into the positions of these tax protesters and relied on the information they provided. He used form letters, pleadings, and other statements to create many of the documents he sent to the IRS.

In 2004, O’Daniel filed a 1040 return and reported zero income. He attached a statement explaining that he had no income in the “constitutional sense” because he had not received corporate profits. After receiving notices of tax delinquency from the IRS, O’Daniel submitted three foreign bills of exchange purporting to satisfy the delinquency. O’Daniel obtained the template for these foreign bills of exchange through a tax protester seminar conducted by Cindy Beers. In February and June of 2006, O’Daniel filed 1040 returns for tax years 2001 to 2004. He also changed the 1009 forms that had been submitted by various companies for income they paid to him so that the forms indicated he had received zero income. He again explained that his earnings were not income through a trade or business.

During his dealings with the IRS, agency employees advised O’Daniel that his positions on the tax code were contrary to the law. However, O’Daniel had been attending seminars and reading literature that told him the IRS was misapplying the law. In December 2005, O’Daniel filed a request with the IRS for a due process hearing. He argued that his earnings were not income, an argument the IRS rejected. O’Daniel appealed the decision, but it was upheld in December 2006.

In July 2006, O’Daniel consulted an accountant, Michael Hepworth. Hepworth advised O’Daniel that his position on the tax laws was not supported by the law. O’Daniel was unhappy about this advice and did not initially agree with Hepworth. Even so, he began to realize that he had essentially been misled.

O’Daniel’s only wayward conduct after consulting with Hepworth occurred on March 12, 2007, when he filed a lawsuit against the IRS to contest a lien that it had placed on his house. The complaint was a form pleading that he had obtained from the tax protester materials. On April 25, 2007, O’Daniel voluntarily dismissed the lawsuit, see Michael O’Daniel v. Executive in Charge of the Local Office in Charlottesville, et al., 3:07CV18 (W.D. Va.). As a result of the lien, the IRS seized approximately $77,000 from the sale of O’Daniel’s home. This amount has been applied to offset a portion of his tax liability.

In March 2007, IRS special agents interviewed O’Daniel. He admitted that he had filed tax returns that stated he had zero income. He explained that his definition of income came from the tax code and Supreme Court opinions. In April, O’Daniel contacted the agent and expressed an interest in trying to resolve the situation. He said he wanted to file his taxes properly. O’Daniel explained that he had been “conned” by “Tax Honesty Groups” and people like Joe Banister. In August 2008, O’Daniel agreed to another interview with IRS investigators. He provided more information about the tax advice he had received from Cindy Beers and Hendrickson’s “Cracking the Code.”

In or around the Spring of 2007, O’Daniel hired an accountant, Ronald Mohl, to assist in amending and resubmitting his 1040 returns for 2001 to 2005. In May 2007, O’Daniel resubmitted corrected 1040 returns. These returns did not include payments that O’Daniel had received from another chiropractor for use of his office space, so O’Daniel submitted corrected 1040 returns in September 2008. Mohl also assisted in preparing O’Daniel’s 1040 returns for 2006 to 2009. [footnote 4: The IRS has yet to accept these returns. O’Daniel’s accountant backdated the corporate status of Michael O’Daniel & Associates, Inc. and completed corporate tax returns under Form 1120 as well as individual 1040 tax returns for O’Daniel. The IRS believes it was error to backdate the corporate status. Regardless, O’Daniel relied on the advice of an accountant and reported his income, and he is at least entitled to deduct business expenses in a Schedule C if the advice he received as to the corporate filing was erroneous.]

O’Daniel realizes that his position on the tax laws was wrong. In plea agreement, O’Daniel agreed to cooperate with IRS in resolving tax liability. He has repaid $77,000 to the IRS through the sale of property to which the IRS had attached a lien. O’Daniel recognizes that he has additional tax liability, and as a step toward extinguishing his liability, O’Daniel has been saving money throughout the course of this case.


II. ARGUMENT

A. Sentencing Authorities

Federal sentencing is guided by the overarching principle that a district court impose a sentence that is “sufficient, but not greater than necessary” to achieve the following goals: reflect the seriousness of the offense, promote respect for the law, provide just punishment, deter future criminal conduct, protect the public, and provide necessary rehabilitation. 18 U.S.C. § 3553(a)(2); Kimbrough v. United States, 128 S. Ct. 558, 570 (2007). In fashioning an appropriate sentence, the Court must also consider the nature of the offense and characteristics of the defendant, the kinds of sentences available, the sentencing guidelines, any pertinent policy statements, the need to avoid unwarranted sentencing disparities, and any need to provide restitution. 18 U.S.C. § 3553(a)(1), (3) – (7).

Although a court should begin any sentencing by correctly calculating the guidelines range, the guidelines are but one of many factors that a court must consider under § 3553(a). Gall v. United States, 128 S. Ct. 586, 596 (2007). The sentencing guidelines are advisory, United States v. Booker, 543 U.S. 220, 246 (2005), and a sentencing court may not presume them to be reasonable. United States v. Nelson, 129 S. Ct. 890, 892 (2009) (per curiam); see also United States v. Pauley, 511 F.3d 468, 473 (4th Cir. 2007). Furthermore, the guidelines do not dictate what constitutes a reasonable sentence. United States v. Olhovsky, 562 F.3d 530, 550 (3d Cir. 2009). A sentencing court may vary from the guidelines based on a categorical disagreement with a particular guideline that does not properly reflect the § 3553(a) factors, or it may vary because given the individual characteristics of a particular case the guidelines recommend an excessive sentence. See Kimbrough, 128 S. Ct. at 570, 576; United States v. Tomko, 562 F.3d 558, 571 (3d Cir. 2009) (en banc).

There is no limitation to the information a court may consider in determining an appropriate sentence. 18 U.S.C. § 3661; United States Sentencing Guidelines Manual § 1B1.4 (2008). “Matters such as age, education, mental or emotional condition, medical condition (including drug or alcohol addiction), employment history, lack of guidance as a youth, family ties, or military, civic, charitable, or public service are not ordinarily considered under the Guidelines. These are, however, matters that § 3553(a) authorizes the sentencing judge to consider.” Rita v. United States, 127 S. Ct. 2456, 2473 (2007) (Stevens, J., concurring) (citations omitted); accord United States v. Chase, 560 F.3d 828, 830-31 (8th Cir. 2009). The Supreme Court observed, “t has been uniform and constant in the federal judicial tradition for the sentencing judge to consider every person as an individual and every case as a unique study in the human failings that sometimes mitigate, sometimes magnify, the crime and the punishment to ensue.” Koon v. United States, 518 U.S. 81, 113 (1996). A sentence that focuses only on the offense and not the individual characteristics of the defendant or the other § 3553(a) factors is unreasonable. Olhovsky, 562 F.3d at 549. Thus, sentencing courts are charged with the duty to consider the specific characteristics of the defendant, as well as of the offense, in determining an appropriate sentence.

B. Sentencing Guidelines

The Presentence Report (“PSR”) calculates O’Daniel’s advisory sentencing guidelines offense level as 14, criminal history category as I, and sentencing range as 15 to 21 months. O’Daniel objects to the guidelines calculations. Properly calculated, O’Daniel’s sentencing guidelines, under either § 2B1.1 or § 2T4.1, place his offense level at 13, criminal history category at I, and sentencing range as 12 to 18 months. This sentencing range falls in Zone C, which allows for a spilt sentence of imprisonment and community confinement or home detention. By statute, a sentence of pure probation is precluded.

In the Plea Agreement, O’Daniel and the Government stipulated that the loss amount was between $80,000 and $200,000 under § 2T4.1. The PSR calculates O’Daniel’s guidelines under § 2B1.1, a guideline that incorporates different loss ranges than § 2T4.1. Thus, the loss range to which O’Daniel stipulated under § 2T4.1, potentially falls under two loss ranges in § 2B1.1, from $70,000 to $120,000, and from $120,000 to $200,000. The PSR assumes a loss range under § 2B1.1 of $120,000 to $200,000, even though O’Daniel did not necessarily stipulate to a range of over $120,000. It is equally plausible that the stipulated loss range would fall below $120,000. Moreover, O’Daniel has not admitted that the loss amount was over $120,000. Accordingly, the PSR should reflect the lower loss amount of $70,000 to $120,000. Should the Court determine that § 2B1.1 applies instead of § 2T4.1, O’Daniel submits that the loss range under § 2B1.1 should not exceed $120,000. The resulting total offense level would be 13, the same as under § 2T4.1, with a guidelines sentencing range of 12 to 18 months in Zone C.


C. Circumstances of the Offense and O'Daniel's Personal History

In fashioning an appropriate sentence, courts consider a defendant’s personal characteristics and overall conduct, not just the offense conduct. See Tomko, 562 F.3d at 571 (a variance under § 3553(a) factors was appropriate because of the defendant’s “negligible criminal history, his employment record, his community ties, and his extensive charitable works”); Pauley, 511 F.3d at 474 (in a child pornography case, a substantial downward variance was appropriate, in part, because the defendant was a “good father and teacher”). For a defendant’s acts of community service to warrant a variance, they must be exceptional in that the acts are both substantial and personal in nature. United States v. Ali, 508 F.3d 136, 149 (3d Cir. 2007) (citing United States v. Cooper, 394 F.3d 172, 176-77 (3d Cir. 2005)). Courts evaluate whether these acts are substantial “‘with reference to the offender’s wealth and status in life. More is expected of [those] who enjoy sufficient income and community status[, as] … they have the opportunities to engage in charitable and benevolent activities.’” Id. (quoting Cooper, 394 F.3d at 176.)

O’Daniel is an excellent father who has taught his children many good lessons and provided an example of a caring, independent person. Through his work as a chiropractor, O’Daniel has helped those with various maladies, whether they could pay for his services or not. He has been a mentor for entrepreneurs, and he devotes his time to various charities. His contributions to the community are personal and hands-on; he does not merely write a check. O’Daniel is a good man who has contributed much to his community. His wife, who has MS, also relies on his assistance. He gives her daily shots of medicine and otherwise helps with her treatment.

Moreover, O’Daniel has no criminal history. He was led astray by tax protesters. Without their influence, he would not have engaged in the offense conduct. Perhaps the individualism that his daughter recognizes in O’Daniel made him more susceptible to the positions of the tax protestors. In any event, O’Daniel understands he made a big mistake, and he has taken steps to correct his actions. Each of these factors suggests that a variance is warranted.

D. Seriousness of the Offense, Need to Deter Future Criminal Conduct, Punish, and Protect the Public

Other than an arrest in 1972 when he was 19 years old for possession of hash, O’Daniel has no experience with the criminal justice system. This case has been humiliating and has weighed heavily on O’Daniel. The experience itself has been punishing. Once he is convicted of a felony, O’Daniel will lose his civil rights. He will also lose his chiropractor’s license. See Va. Code Ann. § 54.1-2409 (2010). These collateral consequences of a felony conviction are significant and effectively increase the punishment imposed.

Moreover, any period of imprisonment will have a negative impact on O’Daniel’s chiropractic practice. O’Daniel owns his business and is the only chiropractor in it, although he is trying to bring in a partner. His incarceration will also prevent him from serving his clients and the community.

Imprisoning O’Daniel is not necessary to protect the public. O’Daniel is not a danger, and he has done well on bond. No evidence suggests that he will have any problem with future supervision. Nor does he present a risk for future criminal conduct. He has no criminal history. O’Daniel has expressed remorse for his conduct, hired an accountant to assist with his tax returns for 2001 to 2009, filed tax returns through 2009, and made efforts to pay off his tax liability.

In tax cases, general deterrence or deterrence to others is a significant factor cited by the Sentencing Commission. United States v. Engle, 592 F.3d 495, 501-02 (4th Cir. 2010). Preguidelines sentencing statistics showed roughly half of defendants received probation and the other half imprisonment, serving on average 12 months. U.S.S.G. § 2T1.1 background cmt. The Commission designed the tax guidelines to reduce the number of pure probation sentences and “somewhat increase the average sentence length.” Id. After Booker, the Guidelines commentary, like the Guidelines themselves, are merely advisory. Engle, 592 F.3d at 502. A court should still be guided by the factors in § 3553(a) and may impose a sentence different than that suggested by the Guidelines. Id.

In United States v. Engle, the Fourth Circuit reversed a sentence of probation as substantively unreasonable for a defendant who had been convicted of tax evasion. 592 F.3d at 505. However, the facts of that case are distinguishable from O’Daniel’s. Engle had evaded taxes for 16 years by sending false information to the IRS, placing assets under other peoples’ names, and hiding income in shell corporations. Id. at 497-48, 503. The tax loss was over $600,000. Id. at 497. Engle had some criminal history, [footnote 5: The district court determined that Engle’s criminal history category II was overstated and reduced it to a category I. Id. at 498.] and the advisory guidelines range was 24 to 30 months. Id. at 498. The district court justified imposing a sentence of probation based on one ground: Engle should be allowed to stay out of prison so that he could earn money to pay his tax liability. Id. The Court of Appeals found this reason simply inadequate to warrant such a downward variance given the facts of the case. Id. at 504. The Court rejected the notion that a defendant’s economic status should determine whether he goes to prison or gets probation. Id. at 505; accord United States v. Francisco, Case No. 1:09CR32, 2010 U.S. Dist. LEXIS 35285, at * 7 (W.D. Va. Apr. 8, 2010) (Jones, J.) (noting the holding in Engle that probation is substantively unreasonable when based on defendant’s ability to pay restitution).

Unlike in Engle, O’Daniel’s history presents many compelling mitigating factors. Moreover, Engle’s offense was aggravated compared to O’Daniel’s conduct. While the Fourth Circuit recognized that the Commission has tried to reduce the number of pure probation sentences for tax cases, the Court nonetheless sanctioned variances to account for other factors in § 3553(a).

In United States v. Tomko, 562 F.3d 558, the Third Circuit, sitting en banc, upheld a sentence of probation in a tax evasion case that involved a similar amount of loss as O’Daniel’s. The offense arose when Tomko, while having his home built, directed the contractors to submit false invoices so that he could illegally deduct his payments as expenses for his business. Id. at 561. In varying from a guidelines range of 12 to 18 months imprisonment to a sentence of probation, the district court did not disagree with the Guidelines’ policy, but instead determined that, considering the factors in § 3553(a), the range of punishment was excessive. Id. at 561, 570. As a rationale for the variance, the district court cited Tomko’s “negligible criminal history, his employment record, his community ties, and his extensive charitable works.” Id. at 571. While many of the individual judges on the Court of Appeals would not have imposed a sentence of probation, the Court nonetheless determined that the sentence was not unreasonable. Id. at 574-75.

The mitigating factors in Tomko are also present in O’Daniel’s case. Yet, O’Daniel’s criminal conduct was less serious. O’Daniel did not come up with the tax theories, and he did not try to evade his tax responsibility by subterfuge. He was upfront with the IRS and explained why he was not paying taxes. Having learned his lesson, many of the reasons for incarcerating someone who followed the advice of tax protesters simply do not exist in O’Daniel’s case. The only factor that weighs in favor of imprisonment is the need for general deterrence. All of the other factors (protect the public, punishment, and personal deterrence) suggest that probation, if it were allowed by statute, would be appropriate.

E. Correctional Treatment

In O’Daniel’s case, especially, prison is purely punitive. Congress has recognized as much: “imprisonment is not an appropriate means of promoting correction and rehabilitation.” 18 U.S.C. § 3582(a). O’Daniel has no need for vocational training, further education, substance abuse counseling, or other programming available in the BOP. Moreover, the PSR did not identify other correctional needs for O’Daniel. Therefore, imprisonment does not serve any corrective or rehabilitative purpose under § 3553(a)(2)(D) (a sentencing court shall consider the need for the sentence imposed “to provide the defendant with needed educational or vocational training, medical care, or other correctional treatment in the most effective manner”).


III. CONCLUSION

Based on the foregoing reasons, Michael O’Daniel respectfully submits that a sentence of no more than 30 days imprisonment to be followed by six months of home confinement and two years of supervised release is appropriate.

--Defendant's Sentencing Memorandum, docket entry 23, March 15, 2011, United States v. Michael I. O'Daniel, case no. 3:10-cr-00017-nkm-1, in the U.S. District Court for the Western District of Virginia (Charlottesville Div.).

[ASITStands]

......I'd like to read that memorandum without having to download from Pacer if you can post it somewhere. Otherwise, I'll look to see if Recap has it available. What say you?

Here you go....

Thanks. I found it interesting because of the discussion of Banister, Beale, etc.

It's sort of a "how an ordinary fella who oughta know better becomes a tax protester" memo. I'm probably going to use it with others who have swallowed the tax protester rhetoric.

It's on Recap now for anyone who's interested in an original copy.

[Famspear]

O'Daniel's scheduled release date is coming up: Thursday, March 1st.

[Famspear]

Federal Bureau of Prisons web site confirmed that O'Daniel was released on March 1, 2012.