Wednesday, September 16, 2015

Shell Game: Conviction for Obstructing Tax Laws Using Fake Trusts Affirmed

U.S. v. Sorensen, 2015 WL 5315645 (9/14/15) (Colo.)(Published). - The Tenth affirms defendant's conviction under 26 U.S.C. ยง 7212(a) for corruptly endeavoring to obstruct tax laws by the deposit of income and assets into trusts--that were actually shell entities--not properly reported to the IRS and on which taxes were not paid. The court holds: (1) Mr. Sorensen was correctly charged with the offense of conviction even though he could also have been charged under the tax evasion statute -- the government gets to make that call; (2) the district court properly refused to give an instruction requested by Sorensen that required his knowledge of the illegality of his conduct; the district court instructed the jury that it must find he acted "knowingly and dishonestly," and thereby already required such proof; (3) the district court properly gave a deliberate ignorance instruction; there was considerable evidence that Sorensen had attempted to remain deliberately ignorant of the trusts' illegality; (4) while the district court erred by instructing the jury that it could convict Sorensen if it unanimously found any one of the "means" alleged in the indictment, rather than those "means, among others," as the indictment stated, the error actually should have helped Sorensen; (5) the district court did not abuse its discretion by disallowing the defendant's surrebuttal testimony from a witness who could have been called earlier; (6) government misstatements in closing argument did not affect Sorensen's substantial rights in light of the strong evidence against him; and (7) the claim of cumulative error was waived in light of Sorensen's failure to cite pertinent authority supporting it.