United States v. Bartolomea Joseph Montanari
863 F.3d 775
| 8th Cir. | 2017Background
- Bartolomea Montanari owned St. Croix Development (MN) and Emlyn Coal and Montie’s (KY); he failed to pay payroll and excise taxes and filed false Form 433-A statements under penalty of perjury.
- From 2009–2012 Montanari withdrew over $1.7 million from the Kentucky companies and diverted funds (including to a Bella Luca account) for personal use.
- IRS agents (Mikel in MN; McDaniel in KY) and Special Agent Shoup investigated; Montanari made false statements in interviews and in a June 2011 Form 433-A.
- A grand jury indicted Montanari (2014) for tax evasion, mail fraud, and wire fraud (bulldozer transaction alleged kickback). A jury convicted on all counts.
- District court found tax loss of $1,584,534.75, applied USSG §2T1.1 base offense level 22, +2 for unreported criminal-source income, +2 for sophisticated means, +2 for obstruction (USSG §3C1.1), producing offense level 28 (CHC I) and 78–97 months; sentenced to 78 months.
- On appeal, conviction affirmed; sentence vacated in part because government conceded insufficient evidence to support the +2 specific-offense-characteristic for failure to report income from criminal activity (the $100,000 bulldozer payment), requiring resentencing.
Issues
| Issue | Montanari's Argument | Government's Argument | Held |
|---|---|---|---|
| Limitation of cross-examination of witness Kloeber | District court improperly barred questions beyond scope that could show bias/credibility | Court properly limited scope; trial judge has wide latitude under Rule 611(b) | No abuse of discretion; no new trial warranted |
| Tax-loss calculation for guideline base offense level | Tax loss should be limited to amounts "assessed" personally (not all company liabilities) | Tax-loss under §2T1.1 includes losses that are object of offense and related conduct, including penalties and interest | Court affirmed district court's $1,584,534.75 tax-loss finding and base level 22; no clear error |
| Obstruction-of-justice adjustment (USSG §3C1.1) | False statements were part of same conduct as tax evasion and/or too remote to criminal investigation | False statements to agents and later false Form 433-A were distinct, material, and significantly impeded investigation | Court held adjustment proper; district court did not clearly err |
| +2 Specific-offense-characteristic for unreported income from criminal activity (§2T1.1(b)(1)) | Government failed to prove Montanari failed to pay taxes on $100,000 kickback from bulldozer transaction | Government argued transaction constituted criminal-source income not reported | Government conceded insufficient evidence; court accepted concession and remanded for resentencing without that +2 (and to reconsider grouping effects) |
Key Cases Cited
- United States v. Drapeau, 414 F.3d 869 (8th Cir. 2005) (trial judges have wide latitude to impose reasonable limits on cross-examination)
- United States v. Thomas, 635 F.3d 13 (1st Cir. 2011) (guidelines allow counting related tax liabilities as part of same course of conduct)
- United States v. Ervasti, 201 F.3d 1029 (8th Cir. 2000) (related-conduct principle for tax-loss calculations)
- United States v. Black, 815 F.3d 1048 (7th Cir. 2016) (distinguishing rules on when payments affect pre-existing tax-loss calculations)
- United States v. Lamere, 980 F.2d 506 (8th Cir. 1992) (obstruction adjustment must be distinct from offense of conviction)
- United States v. McKanry, 628 F.3d 1010 (8th Cir. 2011) (standard for showing that false statements significantly obstructed investigation)