Searching over 5,500,000 cases.

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

United States v. Done

United States District Court, N.D. Florida, Panama City Division

April 16, 2018




         This matter is before the Court upon Petitioner's Amended "Motion under 28 U.S.C. § 2255 to Vacate, Set Aside, or Correct Sentence by a person in Federal Custody" with memorandum in support (ECF No. 524), the Government's Response (ECF No. 531); and Petitioner's Reply (ECF No. 534). The case was referred to the undersigned for the issuance of all preliminary orders and any recommendations to the district court regarding dispositive matters. See N.D. Fla. Loc. R. 72.2; see also 28 U.S.C. § 636(b) and Fed.R.Civ.P. 72(b). After a review of the record and the arguments presented, the Court concludes that Petitioner has not raised any issue requiring an evidentiary hearing and that the § 2255 Motion should be denied. See Rules 8(a) and (b) Governing Section 2255 Cases.

         I. BACKGROUND

         On April 19, 2012, a grand jury returned a fifty-four-count indictment charging Petitioner and six co-defendants with crimes based on their participation in a scheme designed to obtain fraudulent tax refunds from the Internal Revenue Service (IRS). (ECF Nos. 1 & 2.) Petitioner's co-defendants were Evelyn Johnston, Blaine Johnston, Hector A. Cabrera, Diana M. Gonzalez, Wilson Calle, and Wilfredo Rodriguez. Id.

         The tax fraud scheme was premised on what is known as "redemption theory, " which provides that "individuals are not responsible for their common personal debt obligations such as home mortgages, loans, credit card bills, and lines of credit, and may instead seek money from the IRS ... to repay [or redeem] these outstanding obligations." (ECF No. 500 at 3.)[1] Promoters of the scheme advised taxpayers that, by filing an IRS Form 1099-OID (Original Issue Discount), they could make a claim with the U.S. Treasury Department (Treasury) for satisfaction of personal debt.

         The 1099-OIDs in this case contained creditor-specific information such as the institution's federal taxpayer identification number and actual business address, which made it appear that the financial institution submitted the document. The 1099-OIDs reported a taxpayer's personal debt obligation as income and a similar amount was withheld. Once the 1099-OID was in the hands of the IRS, the personal tax return reporting the same income and corresponding withholding figure was submitted.

         Petitioner, along with co-defendants Cabrera, Gonzalez, and Calle, was responsible for recruiting individuals who were interested in participating in the scheme. Co-defendants Evelyn and Blaine Johnston, who owned and operated ABACO Executive Services (ABACO), a tax-preparation entity, filed and/or prepared all the fraudulent tax returns included in this conspiracy. Co-defendant Rodriguez filed his own fraudulent tax return, which was prepared by ABACO, utilizing this same scheme.

         As the 1099-OID scheme grew, operations developed in the states of Florida and New York. Petitioner, who resided in New York and was a longtime acquaintance of co-defendant Calle, opened up his home for 1099- OID scheme seminars, spoke or taught at seminars promoting the scheme, and recruited individuals from New York and New Jersey. Petitioner filed a fraudulent individual tax return and 1099-OID for the year 2008. Petitioner was later provided formal notice (referred to as a "3175 letter") from the IRS that his use of the 1099-OID and claim for refund was unlawful. Sixty-three total fraudulent returns were filed in conjunction with this scheme.

         The Indictment charged Petitioner in Count One with Conspiracy to Defraud the Government With Respect to Claims, in violation of 18 U.S.C. §§ 286 and 287, and in Counts Forty-Four through Fifty-Three with Filing False Claims, Aiding and Abetting, in violation of 18 U.S.C. §§ 287 and 2. (ECF No. 326 at 1.) Attorney Walter B. Smith was appointed to represent Petitioner. (ECF No. 127.) Petitioner, along with co-defendants Blaine Johnston, Rodriguez, Gonzalez, and Calle proceeded to trial before the Honorable J. Richard Smoak, Jr.[2]

         At trial, the defendants collectively asserted a good-faith defense and proclaimed ignorance that their submission of the 1099-OID form in this manner was illegal. According to the defense, the 1099-OID process appeared legitimate based upon the willingness of co-defendant Evelyn Johnston, as an IRS enrolled agent, to submit these filings through ABACO, and due to the circumstances surrounding the live seminars that lent the pitch an aura of credibility. Specifically, the defendants pointed to the fact that the seminars were held at reputable facilities and locations, were well-attended, and offered high-caliber, educated speakers.

         On the fourth day of the trial, a Thursday, Gonzalez tendered a guilty plea to Count One of the Indictment. Without consulting with counsel, the trial judge announced to the jury:

You all have been locked away. I apologize for the delay but we had to first deal with another matter, and one of those other matters is that defendant Diana M. Gonzalez, pursuant to an agreement with the Government, pled guilty to Count One, and she is no longer on trial.

(ECF No. 434 at 5.) Counsel voiced no contemporaneous objection, nor did counsel request contemporaneously that a limiting instruction be given. The following Monday, on the sixth day of trial, defense counsel jointly moved for a mistrial based upon the district judge's decision to explain Gonzalez's absence to the jury by advising that she pled guilty to the conspiracy count. The district judge said he recalled no objection being raised at the time of its announcement to the jury on the fourth day.

         In response, Petitioner's counsel advised the district judge that counsel had decided among themselves not to say anything to the jury explaining the absence of Gonzalez. Petitioner's counsel further stated, "Now, the reason I didn't object when-when you informed the jury, I didn't want to highlight it anymore, and I didn't know what the law was, and I didn't want to object and-and raise-focus more attention on it if it was not error, reversible error." (ECF No. 446 at 4.)

         The court denied the defense motion as untimely, but directed defense counsel to propose a curative instruction. The court advised counsel that, if requested, the curative instruction could be given twice -once during trial as soon as an instruction could be prepared and approved and again during the final jury charge. Defense counsel chose to have the court read the curative instruction only during the final instructions.

         At the close of the Government's case-in-chief, the defendants moved for judgment of acquittal pursuant to Rule 29 of the Federal Rules of Criminal Procedure. The motions were denied at that time and again upon renewal at the conclusion of all evidence. During closing argument, Petitioner's counsel reminded the jury that the guilty plea of Gonzalez was not to be considered as evidence against Petitioner. (Doc. 452 at 69.) In its final instructions to the jury, the district judge reminded the jury twice that their decision "must be based only on the evidence presented during the trial." (Doc. 453 at 10, 11.) The court also instructed the jurors that they must follow all the court's instructions and not disregard any. Id.

         The district judge instructed the jury as follows:

... I told you last week that Diana Gonzalez is no longer a participant in the trial because she had pled guilty to a charge. I also instruct you that you must completely disregard what I said at that time about Diana Gonzalez, and you must not consider what I said about Diana Gonzalez's plea for any reason in reaching your verdict for any of the other defendants. Now, the fact that a codefendant has pled guilty cannot be considered as evidence of the guilt of any remaining defendant.

Id. at 12. The jury convicted all the defendants as charged, except for Rodriguez, who was convicted of the only substantive offense with which he was charged and was acquitted on the ...

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.