United States v. Rozin
664 F.3d 1052
| 6th Cir. | 2012Background
- Rozin and co-defendants used LOI insurance to generate tax deductions, with Rozin retaining control over premium funds through trusts and reinsurance schemes.
- Policies were marketed as tax-deductible insurance, but the governmental evidence showed backdating and lack of legitimate business purpose.
- Rozin and Kallick funded LOI purchases via Liss and Koehler, with commissions to brokers and transfers to grantor trusts.
- Additional schemes included Basis Boost to artificially raise a seller’s basis and create deductible losses.
- The government charged Rozin with conspiracy to defraud the United States, subscribing a false tax return, and attempted tax evasion; the district court denied Rozin’s motion for acquittal and Rozin was convicted on all counts; restitution for Kallick’s taxes was ordered.
- On appeal, Rozin challenges the willfulness finding, the admission of certain evidence, the conspiracy charging theory, and restitution allocation, all of which the Sixth Circuit affirmed in full.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Willfulness for false return and evasion | Rozin argues lack of knowledge; reliance on professionals. | Rozin contends reliance on promotional materials and others excuses willfulness. | Sufficient evidence supports willfulness; reliance defenses fail. |
| Conspiracy to defraud the United States | Rozin conspired to evade taxes. | Rozin contends absence of conspiracy due to Kallick’s dismissal. | Rational juror could find Rozin knew of and joined the conspiracy. |
| Admissibility of evidence (Rule 404(b)) | Evidence beyond the 404(b) scope relevant to intent. | Evidence constitutes prejudicial, extrinsic acts. | Evidence admitted as intrinsic/part of continuing conspiracy; 404(b) not applicable or harmless. |
| Restitution for Kallick's taxes | Rozin liable for Kallick’s tax damages due to conspiracy. | Due process concerns and lack of direct involvement. | Rozin jointly and severally liable for Kallick’s restitution under 18 U.S.C. 3664(h); no due process violation. |
Key Cases Cited
- United States v. Minarik, 875 F.2d 1186 (6th Cir. 1989) (limits conspiracy to defraud where duties are technical; not controlling here)
- United States v. Mohney, 949 F.2d 899 (6th Cir. 1991) (limits Minarik when duties are not technical; ongoing conspiracy allowed)
- United States v. Khalife, 106 F.3d 1304 (6th Cir. 1997) (technical notice concerns; not technical here)
- United States v. Damra, 621 F.3d 474 (6th Cir. 2010) (reaffirmed Minarik's narrow application in conspiracy charging)
- United States v. Kraig, 99 F.3d 1361 (6th Cir. 1996) (upheld defraud conspiracy where ongoing scheme)