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United States v. Isagba

United States District Court, M.D. Florida, Ocala Division

October 31, 2017

UNITED STATES OF AMERICA Plaintiff,
v.
JOYCE O. ISAGBA, et al., Defendants.

          REPORT AND RECOMMENDATION [1]

          PHILIP R. LAMMENS UNITED STATES MAGISTRATE JUDGE

         This matter is before the Court on the United States' motion for default judgment against Defendants Joyce O. Isagba, Joyce O. Isagba as the trustee of Eneziakpezi Trust, David O. Isagba, and David O. Isagba as the trustee of Moeo Trust. (Doc. 18). Specifically, the United States seeks: (1) a judgment of over $700, 000.00 against the Eneziakpezi Trust for unpaid federal income tax liabilities; and (2) an order foreclosing on federal tax liens against the real property and ordering the property be sold with the proceeds again going first toward the unpaid tax liability. For the reasons stated below, I submit that the motion should be granted and judgment should be entered in favor of the United States and against Defendants as requested.

         I. BACKGROUND

         A. The Federal Income Tax Liabilities

         Joyce O. Isagaba, purporting to be the trustee of the Eneziakpezi Trust, filed a 2008 Form 1041, U.S. Income Tax Return for Estates and Trust, on behalf of the Eneziakpezi Trust. Compl. ¶ 9. On the Form 1041, Mrs. Isagba sought a refund of $459, 023.00. Compl. ¶ 9. On August 20, 2009, the IRS made a manual refund of $462, 557.62, consisting of the $459, 023.00 requested, plus $3, 534.62 of interest. Compl. ¶ 10. The $459, 023.00 refund requested by Mrs. Isagba on the Eneziakpezi Trust's 2008 Form 1041 was based on claimed withholdings as reported on a Form 2439, Notice to Shareholder of Undistributed Long-Term Capital Gains. Decl. Bonnie Ragghinati ¶ 11, Exh. 3. The Form 2439 attached to the return is fraudulent: the entity that purportedly issued it - Citigroup-Group Investments - does not exist in the IRS database, and the Form 2439 does not provide an entity classification number. Decl. Bonnie Ragghinati ¶ 11, Exh. 3. Nor does a Google search for the entity in quotes yield any results. Decl. Bonnie Ragghinati ¶ 11. Additionally, on or about January 22, 2010, after the IRS had issued the refund check based on the first return, Mrs. Isagba filed an additional return on behalf of the Eneziakpezi Trust for the 2008 tax year. Decl. Bonnie Ragghinati ¶ 12, Exh. 4. That return sought a refund of $7, 234, 311 based on based on claimed withholdings as reported on a Form 2439. Decl. Bonnie Ragghinati ¶ 12, Exh. 4. The Form 2439 attached to the return is also fraudulent: the entity that purportedly issued it - Ghanuis-Group Investments - does not exist in the IRS database and the Form 2439 does not provide an entity classification number. Decl. Bonnie Ragghinati ¶ 12, Exh. 4. Again, a Google search for the entity in quotes also does not yield any results. Decl. Bonnie Ragghinati ¶ 12, Exh. 4.

         On June 12, 2012, a delegate of the Secretary of the Treasury of the United States properly made assessments for tax year 2008 against the Eneziakpezi Trust. Compl. ¶ 12. The delegate assessed $459, 023.00 for the tax that was erroneously refunded to the trust, and $56, 944.49 in interest. Compl. ¶ 12; Decl. Bonnie Ragghinati ¶ 6, Exh. 1.

         A delegate of the Secretary of the Treasury properly issued notices of the unpaid tax and interest and made demands for payment to the Eneziakpezi Trust. Compl. ¶ 13, Decl. Bonnie Ragghinati ¶ 7. Despite these notices and demands for payment, the Eneziakpezi Trust has not made any payments towards these assessments. Compl. ¶ 13. As of July 13, 2017, the Eneziakpezi Trust is indebted to the United States on account of those assessments in the amount of $722, 936.30, plus interest and all statutory additions thereafter as provided by law. Decl. Bonnie Ragghinati ¶¶ 9, 10, Exh. 2.

         B. The Subject Property

         Mrs. Isagba used the funds from the Eneziakpezi Trust's erroneous refund to purchase real property located at 7712 Park Hill Avenue, Leesburg, Florida, 34748 (“Subject Property”). On September 1, 2009, less than two weeks after the IRS issued the refund check, Mrs. Isagba endorsed and deposited the $462, 557.62 IRS refund check into SunTrust Bank Account number ********0753, titled Irrevocable Trust for Eneziakpezi Joyce O. Isagba, Trustee (“the Eneziakpezi Trust bank account”). Compl. ¶ 11a. Mrs. Isagba is the only person with signature authority for this account. Compl. ¶ 11a.

         The next day, Mr. and Mrs. Isagba signed a purchase agreement with Maronda Homes of Florida to purchase the Subject Property. Compl. ¶ 11b. The Isagbas tendered a $1, 000 money order to Maronda Homes of Florida. Compl. ¶ 11b. Approximately two weeks later, on September 14, 2009, Mr. Isagba created the Moeo Trust. Compl. ¶ 11c. The next day, he contacted Tonia Gibbs of Steel City Title, an affiliate of Maronda Homes, instructing her to place the title to the Subject Property in the name of the Moeo Trust. Compl. ¶ 11c. The day after Mr. Isagba instructed Tonia Gibbs to place the Subject Property's title in the Moeo Trust, Mrs. Isagba withdrew $257, 500.00 from the Eneziakpezi Trust bank account. Compl. ¶ 11d. She used the funds to purchase a SunTrust Official Check (“SunTrust check”) in the same amount. Compl. ¶ 11d. The SunTrust check listed the purchaser as Mr. and Mrs. Isagba, was made payable to Steel City Title Inc., and was noted “for: Purchase Home.” Compl. ¶ 11d. The closing on the Subject Property took place a week after the withdrawal from the Eneziakpezi Trust bank account. Compl. ¶ 11e. The Isagbas remitted a check from a Bank of America account in the amount $74.29 payable to Steel City Title Inc. Compl. ¶ 11e. A Special Warranty Deed dated September 23, 2009 was recorded in the Public Records of Lake County on September 29, 2009. Compl. ¶ 11e. The deed lists the Moeo Trust as the grantee of the property from Maronda Homes of Florida. Compl. ¶ 11e.

         Mr. and Mrs. Isagba have lived in the Subject Property as a personal residence along with their children and Mrs. Isagba's mother since its purported transfer to the Moeo Trust. Compl. ¶ 18ii. Mrs. Isagba paid all of the real estate taxes for the Subject Property for tax years 2009, 2011, and 2012 using the Eneziakpezi Trust bank account. Compl. ¶ 20c. The 2009 check from the Eneziakpezi Trust bank account states that it is from “JOYCE O ISAGBA ITF ENEZIAKPEZI.” Compl. ¶ 20c. In 2013, Mrs. Isagba also made half of the payments using the Eneziakpezi Trust's bank account. Compl. ¶ 20c.

         C. Federal Tax Liens

         Pursuant to 26 U.S.C. §§ 6321 and 6322, a lien for the unpaid federal taxes described above arose on June 12, 2012, the date of assessment, in favor of the United States. Compl. ¶ 15. The lien attached to all property and rights to property belonging to and/or controlled by the Eneziakpezi Trust, including the Subject Property, which is titled in the name of the Moeo Trust. Compl. ¶ 15. On June 16, 2014, a delegate of the Secretary of the Treasury recorded a notice of federal tax lien in Lake County, Florida against the Eneziakpezi Trust on account of its 2008 federal income tax assessments. Compl. ¶ 16. On December 11, 2014, a delegate of the Secretary of the Treasury recorded a nominee notice of federal tax lien in Lake County, Florida against the Moeo Trust, based on the Eneziakpezi Trust's 2008 federal income tax assessments. Compl. ¶ 17.

         D. The Federal Action

         On March 6, 2017, the United States filed its three-count complaint against Defendants. (Doc. 1). In Count I, the United States sought to reduce the tax liability of the Eneziakpezi Trust to judgment. In Count II, the United States asserted a right to the Subject Property under the common law of conversion. In Count III, the United States sought to foreclose the federal tax lien on the Subject Property. Despite being properly served, Defendants did not appear or otherwise defend this action, and thus, the Clerk entered default on July 10, 2017. (Doc. 15). Defendants then filed the instant motion for final default judgment. (Doc. 18).

         II. ...


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