Michael Irving Trial (Continued)

[LPC]

For those who haven't been checking on the updates at http://www.redcrayons.net, Detective Irving took the stand, and his testimony was somewhat weird, because he claims to have signed everything that was prepared for him without reading it or knowing why he was going to get a refund. He seems to have been a tax denier without a theory.

The case might have finally gone to the jury today, after inexplicable delays yesterday, but we won't know for sure until Demo reports.

[Demosthenes]

I just uploaded my report for today. It's in the jury's paws now.

http://www.redcrayons.net

[Demosthenes]

Jury verdict on five out of nine counts so far:

http://www.redcrayons.net

[LPC]

An interesting mix of verdicts so far.

It looks like they think he was an idiot (but not a criminal) in 2002, but a criminal in 2005, and they're not yet sure about 2003 and 2004.

[Demosthenes]

The 2005 verdicts were fairly obvious. The 2004 should be as well.

In December 2004, he filed "real" returns for 2002, and then went right back to his non-filing "exempt" W-4 game. If and when the jury thinks about what the filing deadline was for tax year 2004 (April 15, 2005), they should come in with guilty for the 2004 year as well.

[Imalawman]

So are all the counts felonies in this case? I haven't really kept track of exactly what he's charged with.

[Demosthenes]

The jury couldn't reach a decision on the 2003 and 2004 federal and state evasion charges, so a mistrial was declared on those counts.

Can anyone with experience do a quickie estimate on what the federal sentencing guidelines might be for 1 count of federal tax evasion (26 USC 7201) and 1 count of DC tax evasion (47 DC Code 4101(a))? The tax loss for all three years (both fed and DC) was $130,000.

[jcolvin2]

How much was tax loss was DC versus how much federal? I suspect that the federal tax charges will be dealt with under the tax guidelines (2T1.1 et seq), and the DC tax charges treated under the economic offenses guidelines (2B1.1 et seq).

[Demosthenes]

Federal tax loss was $103,678.

DC tax loss was $35,253.

[Demosthenes]

FOR IMMEDIATE RELEASE TAX
MONDAY, MAY 19, 2008

D.C. METROPOLITAN POLICE DETECTIVE TURNED TAX DEFIER CONVICTED OF TAX FRAUD

WASHINGTON - A federal jury in Washington, D.C., has convicted Michael C. Irving, a homicide detective and 18-year veteran of the Metropolitan Police Department (MPD), of two counts of felony tax evasion, the Justice Department, Internal Revenue Service (IRS) and the District of Columbia Office of Tax and Revenue (OTR) announced today. The jury was unable to reach a verdict on four counts of tax evasion, resulting in the court declaring a mistrial on those counts. The jury acquitted Irving of three counts of filing false claims.

According to the evidence introduced at trial, beginning in 2002, as part of a tax defier scheme or “program,” Irving fraudulently arranged for the MPD to stop withholding taxes from his paychecks. From 2002 through 2005, Irving caused false W-4 withholding forms to be filed with the MPD which stated that he was “exempt” from withholding because he supposedly owed no taxes for the prior or current years.

As part of the scheme, Irving then filed a 2002 tax return in which he claimed he made zero wages. As the evidence at trial showed, Irving earned $155,211 in wages for 2002. For calendar years 2003 to 2005, Irving failed to file any tax returns with the IRS and the OTR, and paid very little to no federal or D.C. income taxes for those years, despite having earned MPD wages of $152,153 in 2003, $136,962 in 2004, and $181,913 in 2005. Instead of paying the more than $130,000 he owed in federal and D.C. taxes for these years, Irving spent the money on, among other things, custom-tailored suits, jewelry for his wife, Redskins tickets, dining out, renovations on his $805,000 home, apartment building investments, and vitamins and nutritional supplements.

“No one is above the law,” said Tax Division Assistant Attorney General Nathan J. Hochman. “From the president of a Fortune 500 company to a waiter at a local restaurant to a veteran homicide detective, everyone has to pay their fair share of income taxes. Through the National Tax Defier Initiative (TAXDEF Initiative), law-abiding taxpayers can rest assured that the United States will enforce the tax laws fully and fairly against all citizens.”

U.S. District Court Judge Paul L. Friedman has set a status hearing for July 29, 2008. Irving faces a maximum sentence for both counts of up to 15 years in prison and a $250,000 fine on the federal charge as well as having to pay back all his taxes plus penalties and interest.

“It’s deeply disappointing when anyone asked to enforce the law doesn’t personally follow it. Filing accurate tax returns is a legal requirement. Regardless of where you work or what you do, there is a heavy price to pay for ignoring your tax responsibilities,” said Eileen Mayer, Chief, IRS Criminal Investigation.

“This investigation exemplifies how local and federal authorities can work together to combat tax fraud,” said Deputy Chief Financial Officer for the Office of Tax and Revenue Stephen Cordi.

Assistant Attorney General Hochman thanked the IRS Criminal Investigations Special Agents and the D.C. Office of Tax and Revenue Criminal Investigation Division Special Agents who investigated the case. The case was prosecuted by trial attorneys Karen E. Kelly and Michael P. Ben’Ary of the Tax Division.

More information about the Justice Department’s Tax Division and its National Tax Defier Initiative (TAXDEF Initiative) efforts against tax defiers can be found at http://www.usdoj.gov/tax/taxpress2007.htm .

[wserra]

Federal tax loss was $103,678.

DC tax loss was $35,253.

Under the Tax Table (Guidelines 2T4.1) it would fall within the more than $80K less than $200K however one counts the DC loss. That's base offense level 16. The only enhancements I see offhand (recalling that I have been out of that world for a while) are sophisticated means (add two levels) or obstruction of justice (add two levels). I don't see both, because on the facts they amount to the same conduct - but maybe not, since I seem to recall threatening letters. Per the Sentencing Table, the range of level 16, criminal history I is 21-27 months, level 18 CH I is 27-33 months, and level 20 CH I is 33-41 months. And the Court has the power to consider the hung (and even the acquitted) counts as relevant conduct.

I suggest checking this with someone who has practiced federal criminal law more recently than I (jc2? Dr. C?) before putting it in the alleged book.

[jcolvin2]

Federal tax loss was $103,678.

DC tax loss was $35,253.

Under the Tax Table (Guidelines 2T4.1) it would fall within the more than $80K less than $200K however one counts the DC loss. That's base offense level 16. The only enhancements I see offhand (recalling that I have been out of that world for a while) are sophisticated means (add two levels) or obstruction of justice (add two levels). I don't see both, because on the facts they amount to the same conduct - but maybe not, since I seem to recall threatening letters. Per the Sentencing Table, the range of level 16, criminal history I is 21-27 months, level 18 CH I is 27-33 months, and level 20 CH I is 33-41 months. And the Court has the power to consider the hung (and even the acquitted) counts as relevant conduct.

I suggest checking this with someone who has practiced federal criminal law more recently than I (jc2? Dr. C?) before putting it in the alleged book.

If the judge considers all three years (and he may not consider the 2003 and 2004 years if they are subject to retrial), my analysis of the federal tax component of the offense(s) would be the same as wserra.

With respect to the DC count, it may be treated as a separate fraud subject to punishment under 2B1.1 (theft/fraud), rather than having the amount of DC tax loss simply added to the federal number. More than $30k is a level 12, with possible adjustments for sophisticated means (+2) and/or obstruction (+2). The DC fraud count group would be at levels 12/14/16 depending on the court's ruling on the possibleadjustments (sophisticated means/obstruction).

Assuming the federal tax and the DC tax fraud are treated as separate count groups for "grouping" purposes under USSG 3D1.1 et seq., if the federal tax count group is at level 16/18/20 and the DC tax count group is at a level 12/14/16, the grouping rules of USSG 3D1.4 require adding an additional 1 level (if the two groups differ by more than 4 levels) or 2 levels (if the two groups differ by 0 to 4 levels) to the offense level highest group to obtain the "combined offense level."

Thus, the highest likely guideline "combined offense level" would be 22 (41-51 months), and the lowest would be 16 (21-27 months), with gradations inbetween possible, depending on the court's rulings re:combing DC/fed tax loss, obstruction and sophisticated means for each set of counts (if indeed there are 2 separate sets of counts for grouping purposes).

[Lambkin]

http://www.washingtonpost.com/wp-dyn/co ... 02030.html

D.C. Detective Is Convicted of Tax Evasion

By Keith L. Alexander
Washington Post Staff Writer
Monday, May 19, 2008; 5:51 PM

A D.C. police homicide detective, credited with solving numerous high-profile cases during 18 years on the force, was convicted today of two counts of tax evasion.

Michael C. Irving, 43, had been on administrative leave since his indictment by a federal grand jury in April 2007. Prosecutors said he filed a 2002 tax return in which he claimed he made no money, and that he failed to file returns for the years 2003 through 2005.

The convictions followed a trial in U.S. District Court.

All told, prosecutors said, Irving should have paid more than $130,000 in federal and D.C. taxes. He avoided having a portion of his income held back for taxes by filing a form with the city that falsely claimed he was exempt from withholding, prosecutors said.

Prosecutors said that Irving actually earned about $155,000 in 2002, $152,000 in 2003, $136,000 in 2004, and $181,000 in 2005. They said he used the money he saved on taxes to pay for custom-tailored suits, jewelry for his wife, Redskins tickets, and other items.

The Justice Department's tax division handled the case, aided by the IRS and D.C. Office of Tax and Revenue. In a statement, Eileen Mayer, chief of criminal investigations for the IRS, said, "It's deeply disappointing when anyone asked to enforce the law doesn't personally follow it."

Prosecutors had charged Irving with a total of nine counts. The jury found Irving not guilty on three of the charges, and was unable to reach a verdict on the remaining four counts. Judge Paul L. Friedman set a hearing for July 29 to determine how the case will proceed.

Defense attorney DeMaurice F. Smith said his client was "disappointed" in the jury's guilty verdicts and that various options are being considered, including the possibility of an appeal.

Before the tax troubles, Irving won praise from his colleagues and the U.S. attorney's office, particularly for his work solving a triple homicide in April 2003 at Colonel Brooks' Tavern in Northeast Washington and the killing of 8-year-old Chelsea Cromartie in May 2004.

[jg]

Has Irving been sentenced yet?

Curious minds want to know.

[Demosthenes]

November 6th.

Slowest judge on earth.