Bill Benson client gets 15 months in fed prison

[Demosthenes]

Press Release

Contact:
DONALD A. DAVIS
ASSISTANT U.S. ATTORNEY
PHONE: (616) 456-2404

DANSVILLE MAN SENTENCED FOR TAX EVASION


THURSDAY, MARCH 6, 2008 - Grand Rapids, Michigan – Charles E. Hughes, 57, of Dansville, Michigan, has been sentenced to 15 months in prison for tax evasion, U.S. Attorney Charles R. Gross and Special Agent-in-Charge Maurice Aouate, Internal Revenue Service, Criminal Investigation Division, announced today. Senior U.S. District Judge Gordon J. Quist also ordered Hughes to serve three years of supervised release following his prison term and to pay restitution of $37,559 to the U.S. Treasury. The sentence followed Hughes’ December 6, 2007 conviction by a federal jury of four counts of tax evasion.

According to the evidence presented at trial, Hughes, a sprinkler fitter, purchased the “16th Amendment Reliance Defense Package” for $3,500 in 2000 from William Benson, of Chicago, Illinois. This package of material purports to establish that the federal income tax, as applied to individuals, is unconstitutional. Although the legal analysis and claims contained in the package have been thoroughly discredited, some persons who purchase this or similar packages have used it in an attempt to justify their decision to stop paying federal income taxes. Hughes made that choice. He failed to file his 2000 through 2002, and 2004 federal tax returns, despite having more than $300,000 in income over that period. In addition to his failure to file returns, Hughes also took affirmative steps to avoid having federal tax withheld from his income, including the filing of fraudulent forms. Despite Hughes’ testimony that he actually believed he had no obligation to pay taxes, the jury determined that his pattern of conduct indicated not a good faith belief, but rather a scheme and artifice to evade paying his fair share of the national tax burden.

“The law is crystal clear; people must file returns and pay their taxes,” said Special Agent-in-Charge Aouate. “IRS Criminal Investigation will vigorously investigate those individuals who knowingly and willfully evade their tax obligations.”

The case was investigated by special agents of the Internal Revenue Service, Criminal Investigation Division. The case was prosecuted by Assistant U.S. Attorney Donald A. Davis.

[LPC]

We haven't heard the last of Mr. Hughes, because he has filed a notice of appeal. (Don't know why.)

[notorial dissent]

Wanted to go for those frivolous appeals penalties to go with the rest of his collection???

[LPC]

Wanted to go for those frivolous appeals penalties to go with the rest of his collection???

I can't claim any legal or statistical expertise in this area, but I haven't seen a lot of courts imposing sanctions for frivolous appeals of criminal convictions.

There seems to be an unspoken attitude that, when the guy's freedom is on the line, you let him rant and deny the appeal, but you don't impose sanctions.

Which seems understandable.

[gottago]

I may not be understanding the whole story but from reading about Bensen elsewhere on here it appears that all that happened to him an injunction ordering him to stop selling the "package" and his customer (above) is going to jail for 15 months for buying the package and doing what Bensen advised.

The (convicted) guy is a sprinkler fitter and made about $75K a year and owes the government $37K and somehow destroying his life at age 57 is "justice" while Bensen is running around free and just has to find a new way to rip people off? Granted, the (convicted) guy screwed up but how is prison supposed to enable him to repay what he owes the government and move on.

If Bensen had not been peddling the "package" the guy most likely would never have joined the ranks of the TPs.

At least Schiff is in jail. Hopefully I will not be joining him. How do they "select" people to file criminal charges against while other just get a civil judgment (I am thinking of the Hendrickson followers who were sued a couple of years ago to get back the money they were refunded--none of them went to jail that I read about).

Gottago

[Demosthenes]

Benson has already done time in prison, and while he clearly has demonstrated behavior that should send him back (he's a promoter), his health is so poor, I doubt they'll waste the resources on going through the two years or so it takes to put him back in the pokey.

If it were up to me, only promoters and the worst offenders such as employers who force their employees into this hell would be prosecuted while their marks would be hit with civil collection efforts.

[LPC]

How do they "select" people to file criminal charges against while other just get a civil judgment

A critical issue is whether there is any evidence that the person has committed a crime.

In Benson's case, selling worthless forms based on bogus claims might be a violation of consumer protection laws, but I don't think that it is a federal tax crime. To be guilty of "counseling" someone to file a false return seems to require more than just selling a package of forms.

As Demo has pointed out, it takes time and effort to develop the evidence needed to convict someone of a tax crime, and the government often doesn't bother unless there are large dollars at stake or the person seems to "need prosecuting" for some reason.

(I am thinking of the Hendrickson followers who were sued a couple of years ago to get back the money they were refunded--none of them went to jail that I read about).

That might have been influenced by considerations of public relations.

Criminal prosecutions would have taken years to develop, and the government normally doesn't pursue civil remedies while there is an active criminal investigation, so there would have been nothing visible to the public for years. By announcing a series of related actions to recover erroneous refunds, the government got the maximum publicity to discredit Hendrickson, and they got it in the least amount of time and with the least amount of effort.

[Dr. Caligari]

There seems to be an unspoken attitude that, when the guy's freedom is on the line, you let him rant and deny the appeal, but you don't impose sanctions.

Which is why there is no provision in the Federal Rules of Criminal Procedure comparable to Rule 11 of the Rules of Civil Procedure, which allows the court to impose monetary sanctions for frivolous filings.

[Doktor Avalanche]

There seems to be an unspoken attitude that, when the guy's freedom is on the line, you let him rant and deny the appeal, but you don't impose sanctions.

Which is why there is no provision in the Federal Rules of Criminal Procedure comparable to Rule 11 of the Rules of Civil Procedure, which allows the court to impose monetary sanctions for frivolous filings.

Not sure, but I'll hazard a guess: instead of fining the crap out them they just tack on extra time?