Attorney-at-Law

“TAKE THE CASH, AND LET THE CREDIT GO”

In Uncategorized on 09/10/2020 at 17:00

Robert J. Belanger, 2020 T. C. Memo. 130, filed 9/10/20, heeded the words of old Omar too well. Robert’s construction business did well, but Robert’s bookkeeping, as delegated to son Steven and a girlfriend or two, went less well. Robert also took cash payments, and checks for payment, for work done by the business and used same to buy cashiers’ checks, which never made their way into the business records or his Schedule C. Robert ran the business.

Robert, Steven, and girlfriend ran the cash through the Cape Cod Five Cents Savings Bank (which Judge Ashford calls the Cape Cod Five), but the cash was a lot more than five cents. And Cape Cod Five was more than a sleepy small-town bank.

“…Jane B, the assistant branch manager of Cape Cod Five’s Centerville, Massachusetts, location, contacted petitioner to inform him that numerous treasurer’s checks payable to him needed to be reissued because otherwise the bank would consider the checks abandoned property. During her conversation with petitioner, Ms. B asked whether he would like her to issue one or two treasurer’s checks or open an interest-bearing money market account or certificate of deposit in his name rather than reissuing treasurer’s checks payable to him in the same amounts. Petitioner declined her suggestions and told her that he would send Ms. [girlfriend] to the bank with the treasurer’s checks that needed to be reissued.

“Ms. [girlfriend] brought 21 treasurer’s checks totaling $120,903, all originally negotiated by Steven… to Cape Cod Five for Ms. B to reissue. After Ms. B reissued the treasurer’s checks, Cape Cod Five’s security officer, Diane R, became aware of the transactions. After conducting an investigation… she filed a Suspicious Activity Report (SAR) with respect to the transactions with the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (also known as FinCEN).” 2020 T. C. Memo. 130, at pp. 12-13. (Names omitted).

The tale that Robert told the Treasury Special Agent that “he had purchased multiple treasurer’s checks with cash in smaller amounts on the same day rather than one big check because he felt like it,” 2020 T. C. Memo. 130, at p. 14, got Robert 21 months in USDCDMA for corruptly endeavoring to obstruct and impede the tax laws. Steven walked.

Robert got a SNOD with Section 6663 fraud chops at no extra charge.

Robert’s SOL argument loses; there are sufficient badges of fraud to persuade Judge Ashford. The RA’s specific item reconstruction carries the day; the method uses specific items of taxable income received but not reported. Robert’s claim that some of the money was Steven’s fails, because all Steven got was salary, and though he could sign business checks, Robert was firmly in charge.

Robert’s trusty attorney, playing a bad hand as best possible, tries Boss Hossery on the fraud chops, claiming that the Boss Hoss sign-off didn’t happen until later. “Petitioner contends that supervisory approval of the section 6663 civil fraud penalties was not manifested by the 30-day letter because respondent failed to authenticate that Mr. Noonan signed the 30-day letter or when he purportedly did so. According to petitioner, written supervisory approval of the penalties was manifested by Mr. Noonan’s digital signature on the Form 11661… 51 days after the date of the 30-day letter and therefore the requisite approval was untimely.” 2020 T. C. Memo. 130, at p. 28.

But unfortunately, Robert stipulated and capitulated. “The 30-day letter (with RA G’s RAR) was a stipulated exhibit that neither petitioner nor respondent reserved an objection to. Thus, its authenticity–Mr. [Boss Hoss’s] signature and the date reflected therein–is incontrovertible, and the Form 11661 is of no moment.” 2020 T. C. 130, at p. 29. (Names omitted).

Robert didn’t heed the rest of Omar’s words; the “distant Drum” was a lot closer.

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