10th Wants Stronger Sentence in Tax Evasion Case
The Tenth Circuit found that the government's evidence was valid in proving that appellant had knowingly committed tax evasion, affirming his conviction but reversing a sentence that was originally reduced.
After a jury trial, appellant Bill Melot had been convicted of one count of attempting to evade or defeat tax, one count of corruptly endeavoring to impede the administration of the Internal Revenue Code, six counts of a willful failure to file, and seven counts of making false statements to the Department of Agriculture. He was sentenced to pay nearly $19 million in restitution to the IRS and to a 60-month term of imprisonment, which was actually a huge downward variance from the sentencing guideline range of 210-262 months.
Melot then, on appeal, argued that the government had presented insufficient evidence of willfulness on his part and that the amount of restitution was calculated in error. The government also cross-appealed, claiming that the lower court had mistakenly applied a reduction to Melot's offense level -- the required level needed for acceptance of responsibility was not there, they claimed.
Melot's Conviction
The Tenth first held that the government definitely had sufficient evidence that Melot had engaged in behavior that was consistent with an individual who has actual knowledge of his obligation to pay his taxes and file returns. This evidence was consistent with instances where Melot had routinely hid his assets and income from the IRS, not only used a fake Social Security number and a false employer identification number, but also used cash excessively, and told others this was to avoid paying his taxes.
The Tenth found that all of this evidence, and then some, was more than sufficient to support the jury's finding that Melot was well-aware of his obligations to pay federal taxes. The court found that Melot had negated any inferences of acting in good faith, and promptly upheld his conviction.
Melot's Sentence
Melot also raised challenges to his sentence, claiming that the calculation of his offense was improper. The court did not buy any of his arguments and sided with the government.
According to the sentencing guidelines, as cited by the Tenth, a sentencing decrease is warranted if a defendant can meet the burden of showing, inter alia, that he truthfully admits to the offense of conviction or voluntarily paid restitution prior to adjudication of guilt.
Here, though, a review of the facts confirmed that Melot didn't pay any restitution, nor is there an acceptance of responsibility for his criminal offenses, claiming that Melot "unflinchingly continued to maintain that he did not act willfully." Therefore, the court found, the district court's determination that Melot was entitled to a decrease was erroneous.
The Tenth Circuit, in turn, affirmed Melot's convictions, but reversed his sentence.
Related Resources:- United States v. Melot (Tenth Circuit Court of Appeals)
- Tax Evasion and Fraud (FindLaw)
- Tax Evasion Conviction Requires an Affirmative Act (FindLaw's Second Circuit Blog)