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Becraft In The News
Posted: Tue Apr 17, 2012 10:35 pm
by The Observer
Tax Agency Accuses Economist of 22-year Scam * Reuters
REUTERS
April 16, 2012
Tax Agency Accuses Economist of 22-year Scam
NEW YORK (Reuters) - Federal prosecutors on Monday accused a man of avoiding $500,000 in taxes for 22 years through a variety of measures, including refusing to give employers his social security number and setting up finance companies to collect his pay for him.
David Gilmartin of Phelan, California, was charged with obstruction of the Internal Revenue Service, failure to file a tax return and failure to pay taxes.
A statement from the Office of the Attorney for the Southern District of New York included several references to Gilmartin's education, emphasizing he holds a PhD. in economics.
The indictment described Gilmartin's line of work as consulting for pharmaceutical companies and credit card companies, but it did not name the companies for which he had worked. It also did not list the schools Gilmartin attended in pursuit of his economics degrees.
Gilmartin's lawyer, Larry BeCraft, declined to comment on the case when reached by telephone.
Gilmartin's case will not be BeCraft's first battle against the IRS. Last month BeCraft was billed as one of the instructors in a class on "avoiding and defeating IRS criminal charges" at a conference hosted at an Irvine, California hotel by the Freedom Law School. The conference ended with a campaign event for Republican Presidential candidate Ron Paul.
The charges come during the height of America's tax season, a scramble to meet the traditional April 15 deadline for filing and paying yearly income taxes in the United States.
And speaking of Phelan and Freedom Law School, isn't Peymon from Phelan?
Re: Becraft In The News
Posted: Wed Apr 18, 2012 1:39 am
by Noah
The Observer wrote:
Gilmartin's lawyer, Larry BeCraft, declined to comment on the case when reached by telephone.
From the New York Post....
Alabama lawyer Lowell "Larry" Becraft Jr., who's known for representing tax protesters, said he spoke with Gilmartin recently, but wasn't sure what his motives were.
"He just has his own beliefs," Becraft said
Read more:
http://www.nypost.com/p/news/local/manh ... z1sLsMXXMM
Re: Becraft In The News
Posted: Wed Apr 18, 2012 2:11 am
by LaVidaRoja
WOW!! What a defense! "He just has his own beliefs." Should win acquital every time!!
Re: Becraft In The News
Posted: Wed Apr 18, 2012 4:20 am
by notorial dissent
Sounds like he is setting up to go for a Cheek, since that seems to be the only thing he has any luck with.
Re: Becraft In The News
Posted: Wed Apr 18, 2012 9:00 am
by grixit
I think even Becraft has reached the point where he thinks "Cheek Defense" means mooning the courtroom.
Re: Becraft In The News
Posted: Wed Apr 18, 2012 9:23 am
by notorial dissent
Ah, but it's tried and true and time tested, and from the sounds of it, looks like about all he is going to have to fall back on with this latest one.
Re: Becraft In The News
Posted: Wed Apr 18, 2012 1:45 pm
by Burzmali
The Cheek defense is usually used for Willful Failure to File charges and looks like the government is headed toward Tax Evasion and the like on this one. Since evasion requires an overt act, doesn't that kinda of negate the use of a Cheek defense? I mean, since the Cheek defense relies on showing that the defendant acted in accordance with a deeply held belief they were acting accordance with what they thought the law said, it's hard to imagine an coherent belief that involves "the correct way to pay taxes is to shuffle money around so no one can find it". Though, if anyone could make that argument in a way to befuddle a jury about how sham transactions were the same as tax payments, it's an economist.
Re: Becraft In The News
Posted: Wed Apr 18, 2012 2:46 pm
by Gregg
Not this economist.
Re: Becraft In The News
Posted: Wed Apr 18, 2012 3:08 pm
by wserra
Burzmali wrote:The Cheek defense is usually used for Willful Failure to File charges and looks like the government is headed toward Tax Evasion and the like on this one.
A
Cheek defense negates the element of willfullness, and so applies to both failure to file and evasion. 26 USC § 7201 begins, ""Any person who
willfully attempts in any manner to evade or defeat any tax imposed by this title or the payment thereof . . ."
Cheek itself involved charges of both failure to file and evasion.
Re: Becraft In The News
Posted: Wed Apr 18, 2012 4:10 pm
by LPC
Burzmali wrote:Since evasion requires an overt act, doesn't that kinda of negate the use of a Cheek defense? I mean, since the Cheek defense relies on showing that the defendant acted in accordance with a deeply held belief they were acting accordance with what they thought the law said, it's hard to imagine an coherent belief that involves "the correct way to pay taxes is to shuffle money around so no one can find it".
I would think that the prosecution would have a good argument that any actions which would seem to have no purpose other than to hide payments or assets would be evidence of willfulness because the actions demonstrate an awareness of a legal duty.
I believe that forensic psychiatrists take similar positions in challenging insanity defenses, arguing that attempts to cover up the crime are evidence that the defendant knew that his actions were wrong.
Re: Becraft In The News
Posted: Wed Apr 18, 2012 6:23 pm
by Kestrel
...a variety of measures, including refusing to give employers his social security number and setting up finance companies to collect his pay for him...
The indictment described Gilmartin's line of work as consulting for pharmaceutical companies and credit card companies..
Sounds like they're dealing with employee vs. contractor definitions. This could get expensive for the employers.
Gilmartin may have done something like, "Don't pay me, pay my LLC," with the sole purpose of the LLC being to receive his wages and to offset them by charging off personal expenses as "business."
ETA:
New York Post wrote:Gilmartin, 68, also allegedly had his paychecks written to "Consulting Economist Inc," even though he never incorporated the firm or got a tax ID number.
So it wasn't even a real LLC. He just had his wages redirected into a black hole.
Re: Becraft In The News
Posted: Wed Apr 18, 2012 6:52 pm
by Number Six
The defense doesn't have a snowball's chance in h***. Isn't "Cheek" only usable with room temperature IQ deadbeats who are basically blithering idiots? A bunch of jurors who are usually paid $50 max. a day for their time are going to acquit a wealthy tax cheat?
Re: Becraft In The News
Posted: Wed Apr 18, 2012 6:58 pm
by Burzmali
wserra wrote:Burzmali wrote:The Cheek defense is usually used for Willful Failure to File charges and looks like the government is headed toward Tax Evasion and the like on this one.
A
Cheek defense negates the element of willfullness, and so applies to both failure to file and evasion. 26 USC § 7201 begins, ""Any person who
willfully attempts in any manner to evade or defeat any tax imposed by this title or the payment thereof . . ."
Cheek itself involved charges of both failure to file and evasion.
I know, but on the flip side, the willfulness element is a tab redundant. It would be difficult to imagine a scenario where the prosecution could prove that the defendant "attempt[ed] to evade or defeat" but failed to show the willfulness component. Probably just lawyerese I guess.
Re: Becraft In The News
Posted: Wed Apr 18, 2012 7:35 pm
by wserra
I understand your point. Still, if you're only speaking logically, how could a lawyer act intentionally but not willfully in violating the tax laws?
There are situations in which logic is of little help in explaining reality. Were I the prosecutor in Cryer, I might have called the guy's tax law professor - so long as I knew that s/he wouldn't testify that Cryer was the dumbest SOB who ever attended law school.
Re: Becraft In The News
Posted: Wed Apr 18, 2012 7:59 pm
by Number Six
"In Cheek v. United States, 498 U.S. 192 (1991), the United States Supreme Court reversed the conviction of John L. Cheek, a tax protester, for willful failure to file tax returns and pay tax. The Court held that an actual good-faith belief that one is not violating the tax law, based on a misunderstanding caused by the complexity of the tax law, negates willfulness, even if that belief is irrational or unreasonable. The Court also ruled that an actual belief that the tax law is invalid or unconstitutional is not a good faith belief based on a misunderstanding caused by the complexity of the tax law, and is not a defense."
"Justices Harry Blackmun and Thurgood Marshall agreed with the Court's ruling that a belief that the Federal income tax is unconstitutional is not a defense to a charge of willfulness. These two justices complained, however, about the Court's ruling that a genuine, good faith belief based on a misunderstanding of the Internal Revenue Code is a valid defense. In dissent, Justice Blackmun wrote:
"It seems to me that we are concerned in this case not with 'the complexity of the tax laws,' ante, at 200, but with the income tax law in its most elementary and basic aspect: Is a wage earner a taxpayer and are wages income? [ . . . ]
t is incomprehensible to me how, in this day, more than 70 years after the institution of our present federal income tax system with the passage of the Revenue Act of 1913, 38 Stat. 166, any taxpayer of competent mentality can assert as his defense to charges of statutory willfulness the proposition that the wage he receives for his labor is not income, irrespective of a cult that says otherwise and advises the gullible to resist income tax collections. One might note in passing that this particular taxpayer, after all, was a licensed pilot for one of our major commercial airlines; he presumably was a person of at least minimum intellectual competence."
"Further, the case was remanded for a re-trial. In the re-trial, the jury rejected Mr. Cheek's argument that he actually "believed" that wages were not taxable. He was again convicted. The second conviction was upheld by the United States Court of Appeals for the Seventh Circuit, and the United States Supreme Court let that decision stand by denying review."
http://en.wikipedia.org/wiki/Cheek_v._United_States
Re: Becraft In The News
Posted: Wed Apr 18, 2012 9:39 pm
by notorial dissent
The point I was making here is NOT that Cheek is even remotely a defense here, but that it is the one that Becraft is most fond of using and one of the few(only one) he actually has any luck with, therefore, it is the one he is most likely to go with, NOT that it makes any sense otherwise. It also has the least likelihood of getting him sanctioned as opposed to his true favorites.
Re: Becraft In The News
Posted: Thu Apr 19, 2012 3:19 pm
by Burzmali
wserra wrote:I understand your point. Still, if you're only speaking logically, how could a lawyer act intentionally but not willfully in violating the tax laws?
You could be delusional about the meaning of the law and believe that violating the tax laws is okay because you are protected by some other legal principle. For example, his delusion might be that tax laws are enforced servitude, if someone is attempting to press a person into enforced servitude, that person could reasonable argue that any laws they break while "escaping" were broken under duress, which negates willfulness. Proving he had a good-faith belief that taxes are slavery would be a heck of a mountain to climb, but I with enough billable hours, I wouldn't put it passed a lawyer to pull it off.
That's where it falls apart, a lawyer arguing that he chose not to pay to satisfy his delusion is one thing, explaining how a series of intricate transactions work into it is a lot more difficult.
Re: Becraft In The News
Posted: Thu Apr 19, 2012 6:06 pm
by Number Six
Burzmali wrote:wserra wrote:I understand your point. Still, if you're only speaking logically, how could a lawyer act intentionally but not willfully in violating the tax laws?
You could be delusional about the meaning of the law and believe that violating the tax laws is okay because you are protected by some other legal principle. For example, his delusion might be that tax laws are enforced servitude, if someone is attempting to press a person into enforced servitude, that person could reasonable argue that any laws they break while "escaping" were broken under duress, which negates willfulness. Proving he had a good-faith belief that taxes are slavery would be a heck of a mountain to climb, but I with enough billable hours, I wouldn't put it passed a lawyer to pull it off.
That's where it falls apart, a lawyer arguing that he chose not to pay to satisfy his delusion is one thing, explaining how a series of intricate transactions work into it is a lot more difficult.
So the state of mind of the tax non-compliant becomes an issue for the law to decide? Is the person intelligent enough to know what they are doing; are they mentally impaired, and if so can that be substantiated--that didn't work with Mr. Schiff.
I saw Juanita Nelson and the "Pioneer Valley" war tax protestors on tax day, Tuesday in front of the Brattleboro P.O.. She had a sign that she hadn't paid taxes since 1948. Nice woman, featured frequently. Of course they don't make enough money for taxes to matter much. But if one of the war tax protestors won the lottery and refused to pay you would have a different situation.
Re: Becraft In The News
Posted: Fri Apr 20, 2012 12:33 am
by Famspear
Burzmali wrote:You could be delusional about the meaning of the law and believe that violating the tax laws is okay because you are protected by some other legal principle. For example, his delusion might be that tax laws are enforced servitude, if someone is attempting to press a person into enforced servitude, that person could reasonable argue that any laws they break while "escaping" were broken under duress, which negates willfulness....
No, under Cheek, that would not negate willfulness. Indeed, evidence that you believed that the tax laws are enforced servitude might be evidence of willfulness. Arguing that the federal income tax laws are enforced servitude would be arguing a constitutional issue.
Under Cheek and related cases, willfulness connotes the voluntary, intentional violation of a known legal duty -- a duty of which you are aware. The fact that you actually believed that following the tax law would be "enforced servitude" would not a mistake caused by the complexity of the tax law.
Re: Becraft In The News
Posted: Fri Apr 20, 2012 12:45 am
by Famspear
Stated another way: The "enforced servitude" argument has two components. First you would be arguing that you have been "forced" to comply with the tax law -- that you are under "duress." But the fact that you are aware that you are being forced to comply, that you are complying under duress, cannot possibly negate willfulness. The tax laws are mandatory -- and you ARE being forced to comply (in the sense that there are both criminal and civil penalties for failure to comply). You ARE under duress. That's no secret. Indeed, the fact that you are AWARE that you are under duress, that you are being forced, is probably EVIDENCE that you are AWARE of what the law is -- therefore, you cannot admit that you are aware and yet still not have been willful.
And the other part -- servitude -- is a constitutional argument. There is nothing in the statute that says that you don't have to pay or comply if you believe doing so is "servitude." Servitude really is an argument about the constitutional validity of the tax law.
In short, a belief that you don't have to comply because compliance is "enforced servitude" is not an "actual good faith belief based on a misunderstanding caused by the complexity of the tax law." It's a belief about constitutionality, which does not negate willfulness.