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Case Result

Tax Fraud

Tax Fraud

Federal authorities arrested and charged a woman with tax evasion, both for failing to pay certain employer taxes for her employees and for underreporting her own personal income. The woman was a naturalized U.S. Citizen who immigrated to the United States many years ago from Guatemala. She owned and operated her an employment agency that was known for employing Guatemalan immigrants. In this capacity, she aided many undocumented workers and illegal aliens with obtaining employment.

Forms of employment included landscaping, manufacturing factories and the fishing industry. Federal investigators learned of her tax discrepancies during an audit. They convened a federal grand jury and subpoenaed the woman’s corporate and personal financial records.

A closer examination of the records revealed the full extent of her criminal activity. Investigators ultimately calculated that the woman’s misconduct resulted in a financial loss of tax revenue to the United States in the amount of approximately $800,000.00. This was a conservative estimate based on the woman’s corporate and personal income over the course of five (5) years.

After being criminally charged, she retained Attorney John L. Calcagni III to represent her in this federal prosecution. Attorney Calcagni worked with federal prosecutors to limit his client’s criminal exposure. He also negotiated the terms of a plea agreement, which called for her guilty plea to two tax crimes.

After the woman pleaded guilty in accordance with the terms of her plea agreement, the matter proceeded to sentencing. In federal criminal matters, sentencing is always decided by the Court at the end of the case.

In this particular case, the woman’s suggested sentence according to the U.S. Sentencing Guidelines provided for a range of potential incarceration from 24 to 30 months. At sentencing, the prosecutor advocated for a sentence of one year and one day.

He emphasized that no one likes to pay taxes, but that the success and integrity of the tax system requires citizens to honestly report their income in order to pay their fair share of taxes. Because the woman failed in this instance, jail was required to promote her punishment and general deterrence for other potential offenders who may consider committing similar misconduct.

Attorney Calcagni argued against any jail. While he admitted his client did a bad thing by under-reporting and not paying her full share of taxes, he emphasized that she did so with good intentions – to employ hundreds of undocumented workers over the years.

He further argued that because of her misconduct, she was able to aid many families generate the income necessary to acquire shelter, food, clothing and many other basic necessities required for survival, especially after immigrating here with no resources. But for his client’s efforts, many of these people would have been homeless and unable to survive.

Federal Crimes Attorney John L. Calcagni, III also argued that his client had personally not significantly benefited financially from her admitted misconduct. She also had no criminal record, previously accepted responsibility, was deeply ashamed by her conduct, and remained committed to repaying her debt to the government. Based on these arguments, Attorney Calcagni successfully persuaded the Court to impose a sentence of probation and restitution to the United States.