305 371-8101

Loss of Income Insurance Policies Were Part of Tax Fraud Scheme

U.S. v. ROZIN,  664 F.3d 1052  (6th Cir. 2012)

        Defendant was convicted on three counts of tax-related crimes: subscribing a false tax return under 26 U.S.C. 7206(1); attempting to evade taxes under 26 U.S.C. 7201; and conspiracy to defraud the Government under 18 U.S.C. 371. The United States District Court for the Southern District of Ohio at Cincinnati denied defendant's motion for judgment of acquittal and imposed sentence. Defendant appealed.

        Defendant, with others, took business and individual tax deductions for the cost of so-called Loss of Income (LOI) insurance policies. Inter alia, the appellate court held that, on the convictions for subscribing to a false tax return and attempting to evade taxes, the Government presented sufficient evidence of the crimes and defendant was unable to mount a credible good faith reliance defense. A rational juror could have found that defendant willfully participated in the conspiracy to defraud the IRS, as the Government provided evidence that defendant knew that he could exercise control over the premium funds, and he marketed the LOI policies on this basis. Defendant's prior bad acts argument failed because the disputed evidence directly addressed charges in the indictment and elements of the crimes with which he was found guilty, so Fed. R. Evid. 404(b) did not apply. There was no merit to the argument that the Government was required by the nature of the charges to forgo charging him under 18 U.S.C. 371. Finally, the district court did not err in ordering defendant to pay restitution for the personal income taxes of his co-conspirator pursuant to under 18 U.S.C.S. § 3664(h).

 The judgment of the district court was affirmed.

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