Attorney-at-Law

GOOD JOB, JUDGE LAUBER – PART DEUX

In Uncategorized on 02/28/2020 at 16:21

There has to be a trial for Vincent Fumo, Docket No. 17603-13, filed 2/28/20, says Judge Albert G. (“Scholar Al”) Lauber.

Vince was a guest on this my blog back in 2016, as recipient of the serpent’s tooth from his offspring. See my blogpost “Good Job, Judge Lauber,” 10/14/16.

Y’all will recall that Vince took a major fall in USDCEDPA a dozen years ago, going down on 137 of 139 counts “including mail fraud, wire fraud, conspiracy to commit mail and wire fraud, conspiracy to defraud the United States, obstruction of justice, conspiracy to obstruct justice, and violation of I.R.C. § 7206(2).” Order, at p. 1.

But USDCEDPA didn’t decide how much Vince actually got from his multitudinous skullduggeries, and he did split at least some of it with a codefendant.

So the issue is how much of the loot was income to Vince. IRS wanted forfeiture, but fell down on proving what went into Vince’s coffers from his delictions. Then 3 Cir was appealed to, and bounced the case back and forth a while, in the end coming up with some numbers, which IRS massaged into a SNOD.

IRS wants summary J that Vince is “…collaterally estopped from relitigating whether petitioner received proceeds, income, or benefits as a result of the crimes for which he was convicted.” Order, at p. 3. Not to be outdone, Vince wants summary J that, because USDCEDPA awarded no restitution, IRS is likewise collaterally estopped from relitigating whether Vince did get anything, and btw, SOL.

Judge Scholar Al agrees that Vince can’t “fight old battles o’er” about the 137 counts for which he went down. But because they are many and heavy, Judge Scholar Al doesn’t schedule them here. That said, this case is about unreported income.

“The facts established in the criminal case did not determine the amount of gross income that petitioner received for Federal income tax purposes. The District Court found that petitioner reaped improper benefits and that the [State] Senate and Citizens Alliance were the victims of misappropriation. But it did not find that petitioner derived taxable benefits in a one-to-one ratio with his victims’ losses.” Order, at p. 4.

An embezzler may get dollar-for-dollar taxable income from his/her theft. Embezzlement is efficient thievery, but Vince’s operations may not have been so efficient. “And whereas an embezzler may be held to have received gross income in the dollar amount of funds embezzled, the result may be less obvious for certain of the benefits that petitioner received. For example, there may be disputes of material fact as to whether petitioner derived a dollar-for-dollar benefit from additional salary received by employees for whom he secured promotions to higher positions.” Order, at p. 5.

It’s the same old story. IRS must show some minimal evidentiary connection to income-producing activity, or that Vince actually got something. And while USDCEDPA and 3 Cir decomposed a lot of brain tissue toting up what the PA State Senate and the allied citizens lost via Vince and codefendant, they didn’t find what Vince himself actually got in hand.

So on the trial IRS can connect Vince to income-producing activity or show that Vince actually got something. Then Vince can prove IRS’ numbers are wrong.

But Vince doesn’t get summary J either.

“The District Court declined to enter a verdict of forfeiture because of its finding that the Government had not proven that petitioner derived ‘proceeds traceable to the mail or wire fraud counts on which he was convicted.’ The term ‘proceeds,’ for purposes of 18 U.S.C. § 981, is not equivalent to ‘income’ within the meaning of I.R.C.§61. ‘Proceeds’ is defined to mean property obtained ‘as the result of the commission of the offense giving rise to forfeiture, and any property traceable thereto.’ 18 U.S.C. §981(a)(2)(A). ‘Proceeds’ are forfeitable only if obtained as a result of violating certain enumerated statutes. See id. para.(1). ‘Income’ under the Internal Revenue Code is not subject to such limitations. See I.R.C. § 61(a) (‘[G]ross income means all income from whatever source derived.’); (‘Congress applied no limitation as to the source of taxable receipts, nor restrictive labels as to their nature.’).” Order, at pp. 6-7. (Citation omitted).

Vince claims proceeds equal income, but has no caselaw for that proposition, and Judge Scholar Al isn’t buying.

As for SOL, Vince went down for all kinds of fraud, including filing false tax returns. So no summary J for Vince on that one. Maybe IRS can prove a clear and convincing case of tax fraud.

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