United States v. Tilga
2011 WL 5535405
D.N.M.2011Background
- Tilga and Chandler engaged in a Klein conspiracy to evade U.S. taxes from 1998–2004, using offshore accounts and Pure Trust Organizations to conceal Canadian income.
- IRS investigated Tilga and Chandler; Tilga had Canadian and offshore entities funded through CTC, with substantial unreported income compared to reported income.
- Plea agreements with Tilga and Chandler stipulated a tax loss for relevant conduct of $23,300 (USD) and that neither conduct involved a special skill, obstructive conduct, or an aggravating role, but allowed a sophisticated-means enhancement.
- The Court held an evidentiary hearing on tax loss, sophisticated means, and related PSR objections, ultimately accepting the post-indictment foreign tax credit theory and applying a 2-level sophisticated-means enhancement to Tilga and Chandler.
- The Court sustained Tilga and Chandler’s objections to certain PSR statements while overruling others, and decided the advisory nature of the guidelines is moot for these issues.
- The final order sustains in part and overrules in part, accepting the stipulated tax loss of $23,300 and applying findings consistent with the Plea Agreements and Hoskins in the foreign tax credit context.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Tax loss calculation accuracy | Gov't argues for stipulated loss; Tilga seeks alternative deduction post-indictment | Tilga argues unclaimed deductions/foreign tax credit should alter loss | Tax loss sustained at $23,300 (USD); PSRs adjusted accordingly |
| Foreign tax credit post-indictment | Court should not allow post-indictment credit; rely on Cruz | Credit may apply post-indictment under Hoskins framework | Tilga may claim foreign tax credits post-indictment; Court adopts Hoskins approach over Cruz for this case |
| Sophisticated means enhancement | CTC’s actions justify enhancement | Tilga/Chandler did not create sophisticated means; customer theory | 2-level enhancement applied to Tilga and Chandler based on use of offshore accounts/shell entities |
| Special skills enhancement | Either defendant had special skills from education or CTC programs | No special skill relation to taxes; stipulation prohibits | Objection sustained; neither defendant possessed a qualifying special skill for §3B1.3 |
| Obstruction of justice enhancement | Possible obstruction based on statements to witness | No substantial likelihood of interfering with investigation; not proven | Obstruction enhancement rejected; §3C1.1 not applicable |
Key Cases Cited
- United States v. Hoskins, 654 F.3d 1086 (10th Cir. 2011) (allows consideration of unclaimed deductions/credits in tax-loss calculations; relates to foreign tax credit context)
- United States v. Cruz, 698 F.2d 1148 (11th Cir. 1983) (foreign tax credit acceleration debated; post-indictment availability questioned)
- United States v. Rice, 52 F.3d 843 (10th Cir. 1995) (sophisticated means not guaranteed; garden-variety cases preclude excess scope)
- United States v. Magallanez, 408 F.3d 672 (10th Cir. 2005) (context of sentencing enhancements; confirms Booker/Magallanez framework)
- United States v. Anthony, 545 F.3d 60 (1st Cir. 2008) (sophisticated means applied to similar CTC customer scenario)
- United States v. Martinez-Rios, 143 F.3d 662 (2d Cir. 1998) (Second Circuit on tax-related loss and unclaimed deductions)