IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF GEORGIA ATLANTA DIVISION

Transcription

1 Case 1:13-cr ODE-GGB Document 33 Filed 01/22/14 Page 1 of 16 IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF GEORGIA ATLANTA DIVISION UNITED STATES OF AMERICA CRIMINAL ACTION NO. v. 1:13-CR ODE-GGB-1 ROBERTA L. ALLEN DEFENDANT ROBERTA ALLEN S SENTENCING MEMORANDUM Defendant Roberta Allen humbly comes before the Court, by and through her undersigned counsel, for sentencing after having pled guilty to two counts of aiding tax fraud in violation of 26 U.S.C. 7206(2). With all due respect, Ms. Allen submits her Sentencing Memorandum to this Honorable Court, and requests a below Guidelines sentence, for the reasons urged herein as follows: Ms. Allen submits this memorandum to assist the Court in determining a sentence that is sufficient, but not greater than necessary under Title 18, United States Code, Section 3553(a). INITIAL GUIDELINE DETERMINATIONS The Presentence Report (PSR) calculates Ms. Allen s Sentencing Guidelines at a Total Offense Level 21; however, the Government and Ms. Allen object to the Probation Officer s calculation of the Base Offense Level. In the plea agreement entered on October 8, 2013, both the Government and Ms. Allen stipulated to: (1) a Base Offense Level 20 under Guideline 2T4.1(H) (tax loss more than $400,000, 1

2 Case 1:13-cr ODE-GGB Document 33 Filed 01/22/14 Page 2 of 16 less than $1,000,000); (2) a 2-level increase for preparing tax returns under Guideline 2T1.4(b)(1)(b); and (3) a 3-level downward adjustment for acceptance of responsibility under Guideline 3E1.1. Based on the stipulations in the plea agreement, the parties calculated a Total Offense Level 19. If the Court accepts Ms. Allen s requested criminal history variance/downward departure to a Category I, and the stipulated loss amount, then Ms. Allen s Offense Level corresponds to a sentencing range of months. This establishes the initial benchmark for sentencing under United States v. Gall, 552 U.S. 38, 49 (2007). Nonetheless, the advisory Guideline range is but one factor to be considered in determining a sentence that is sufficient, but not greater than necessary. See Kimbrough v. United States, 552 U.S. 85, 101 (2007) (quoting 3553(a)). SENTENCING PROCEDURE In Gall, the Supreme Court stated that a district court may not presume that the Guideline range is reasonable, but rather must make an individualized assessment based on the facts presented. 552 U.S. at 50. Furthermore, the Court rejected the idea that extraordinary circumstances are required to justify a sentence outside the Guidelines advisory range. Id. at 47. Ultimately, the Court rejected rigid mathematical formulas to determine whether a variance from the Guidelines sentence range is justified. Id. 2

3 Case 1:13-cr ODE-GGB Document 33 Filed 01/22/14 Page 3 of 16 Therefore, after calculating the proper offense level under the Guidelines and giving the government and the defendant the opportunity to argue for a sentence they believe to be appropriate, the district judge must consider each of the 3553(a) factors and tailor the sentence to fit the circumstances of the case. United States v. Booker, 543 U.S. 220, 245 (2005). Section 3553(a) factors to be considered when imposing a sentence are: (1) the nature and circumstances of the offense and the history and characteristics of the defendant; (2) the purpose of sentencing; (3) the kinds of sentences available; (4) the Sentencing Guidelines; (5) the policy statements issued by the Sentencing commission; (6) the need to avoid unwarranted sentence disparities among similar offenders; and (7) the need to provide restitution to any victims of the offense. Essentially, the gist of Booker is that [t]he court must then impose a reasonable sentence in light of the factors enumerated in 18 U.S.C. 3553(a). U.S. v. McBride, 511 F.3d 1293, 1297 (11 th Cir. 2007). Furthermore, a district court need not account for every 3553(a) factor, nor must it discuss each factor and the role that it played in sentencing. Id. 3

4 Case 1:13-cr ODE-GGB Document 33 Filed 01/22/14 Page 4 of 16 NATURE OF THE OFFENSE Ms. Allen was charged with thirteen counts of aiding tax fraud in violation of 18 U.S.C. 7206(2), and pled guilty to two of those counts. Ms. Allen stands by her plea; she acknowledges her guilt, and nothing in this section is intended to diminish the wrongfulness of what she did. In addition to this memorandum, Ms. Allen has submitted a letter to express her remorse and desire to right the wrongs she committed. Exhibit 1. In the plea agreement, Ms. Allen and the Government stipulated to a tax loss amount between $400,000 and $1,000,000, as well as a restitution amount of $670,552. Ms. Allen has accepted responsibility for all of the conduct and tax loss charged in the indictment. In addition to pleading guilty in this case, Ms. Allen consented to a permanent injunction against her, sought by the U.S. Department of Justice, Tax Division, that permits the government, in perpetuity, to conduct postjudgment discovery to monitor Ms. Allen s compliance with the U.S. tax laws. Exhibit 2. Between 2009 and 2010, Ms. Allen and others in her office, generated fraudulent tax refunds for clients by filing false IRS Form 2439 s, a form reserved for use by investors in real estate. The false forms caused taxpayers to claim that they overpaid the U.S. Treasury by substantial sums when, in fact, they did not. The resulting fraudulent tax refunds based on the false Form 2439 s ranged from 4

5 Case 1:13-cr ODE-GGB Document 33 Filed 01/22/14 Page 5 of 16 $31,360 at the low end to $82,286 at the high end. After Ms. Allen s clients received these refunds, they paid her fees ranging from nothing to $15,000. Ms. Allen typically received the fees from her clients by cashier s check made out to Roberta Allen. Over the course of two years, approximately $146,000 (or 21.7%) of the proceeds of the tax fraud went to Ms. Allen by way of fees paid by the clients. HISTORY AND CHARACTERISTICS OF MS. ALLEN Ms. Allen is 50 years of age. She was born in Benton Harbor, Michigan, to James Allen and Carolyn Sue Harden Allen. Ms. Allen s alcoholic father was physically and emotionally abusive towards her mother and the children. James Allen spent much of his income on alcohol and other vices, so Ms. Allen s mother worked outside the home to provide for the family. When Ms. Allen was 12, her parents divorced, and her mother raised the family on her own, working full time, while living in Benton Harbor s housing projects. Because Roberta Allen was the oldest child, she was responsible for caring for her siblings when her mother was at work. By the age of 16, Ms. Allen was pregnant courtesy of a 21 year old man. The sex with the 21 year old was not consensual; however, her family offered no solace for her experience, and they discouraged her from bringing criminal charges against the man. At 17, she gave birth to the baby, and named the boy Eric. 5

6 Case 1:13-cr ODE-GGB Document 33 Filed 01/22/14 Page 6 of 16 Despite being a teenage mother, Ms. Allen graduated high school, and spent a few years studying at a local college. In 1987, she met and married Jerome Burton. Like Ms. Allen s father, Mr. Burton was abusive and failed as a breadwinner for the family. Even though their relationship was toxic, Ms. Allen and Mr. Burton had a daughter together, Sia Burton, in By 1994, the couple separated due to Mr. Burton s abuse and infidelity. In 2000, the couple officially divorced. In 2000, Ms. Allen moved to Georgia for better job prospects and closer proximity to her sisters. Ms. Allen s daughter stayed in Michigan with Mr. Burton for the school year; but Ms. Allen was still the primary breadwinner for the entire family because Mr. Burton was frequently unemployed. At some point in time between 2003 and 2006, Ms. Allen and Mr. Burton failed to communicate, and a dispute arose over child support payments. Roberta was providing for Sia; however, in 2006, the State of Michigan prosecuted Ms. Allen for failure to pay over $20,000 in child support. Mr. Burton was opposed to the prosecution because Ms. Allen financially supported him and their daughter. Exhibit 3, 3-6. Unfortunately, Ms. Allen did not have sufficient funds to hire effective counsel to defend her in the Michigan felony case. Believing she had no 6

7 Case 1:13-cr ODE-GGB Document 33 Filed 01/22/14 Page 7 of 16 legal defense, she pled guilty to failure to pay child support, which is a strict liability felony in Michigan. See People v. Likine, 492 Mich. 367, 380 (2012). 1 Between 2005 and 2008, Ms. Allen worked at S.T.S. Utility Engineering as a damage prevention technician; however, she was released to due to a lack of work. Around that time, Ms. Allen began a tax preparation business, RefundNow Tax Service, in Morrow, Georgia, and a cleaning service, Roal Services, Inc. In late 2008, Ms. Allen s cousin, James Grey, asked her if he could come to Georgia for the 2009 tax season and work out of her office. Ms. Allen respected and admired Mr. Grey, and always called him Uncle Jimmy because he was much older than she was. He had many years of experience preparing taxes for people in Michigan, so Ms. Allen believed that he would be able to help with her business. At the time she agreed to Mr. Grey s request to come to Georgia in late 2008, Ms. Allen had no idea that Mr. Grey and his wife filed for bankruptcy in the Western District of Michigan, Case: jdg; that Mr. Grey opened a bank account in Michigan in the name of Roal Financial (a variation of Ms. Allen s company s name, Roal Services); or that Mr. Grey was transacting business using this company s name. More importantly, it was not until Mr. Grey came to 1 Michigan s child support collection statute and enforcement tactics are considered a draconian debtor s prison because they require no criminal intent or willful refusal to pay child support. See Jennifer Goulah, The Cart Before the Horse: Michigan Jumps the Gun in Jailing Deadbeat Dads, 83 U. Det. Mercy L. Rev. 479, 491 (2006). 7

8 Case 1:13-cr ODE-GGB Document 33 Filed 01/22/14 Page 8 of 16 Atlanta, at the beginning of 2009, that she learned from him exactly how to prepare an IRS Form 2439 in such a way that it could generate a fraudulent refund. GROUNDS FOR A DOWNWARD DEPARTURE/VARIANCE OF CRIMINAL HISTORY Pursuant to Guideline 4A1.3(b), the Court may consider a downward departure from the recommended sentencing Guideline range if the defendant s criminal history category substantially over-represents the seriousness of her criminal history, or the likelihood that the defendant will commit other crimes. As with all departure decisions, the district court should consider all of the factual circumstances that bear upon a defendant s criminal history and likelihood for recidivism. United States v. Carlos, 2012 WL , 7 (D. N.M., 2012) (quoting United States v. Caldwell, 219 F.3d 1186, 1192 (10 th Cir. 2000)). While the calculation of Ms. Allen s criminal history points is accurate, she appears to be more similar to Category I, rather than Category II. Her sole, prior felony conviction over-represents the likelihood that she will commit other crimes, given that this type of charge is usually treated as a civil matter. Moreover, Ms. Allen s ex-husband supports this position. See Exhibit 3. In the Carlos case, the court varied the defendant s criminal history downward. The court in Carlos held that a felony non-support conviction caused the defendant s criminal history and likelihood of recidivism to be over- 8

9 Case 1:13-cr ODE-GGB Document 33 Filed 01/22/14 Page 9 of 16 represented because such an offense was typically either civil in nature or a misdemeanor WL , 7. In Ms. Allen s case (and unlike in the Carlos defendant s case), her ex-spouse disputes the merits of her conviction and supports this request. Exhibit 3, 3-5. In addition, Mr. Burton states that Ms. Allen continues to support their daughter s college education and is a wonderful mother. Mr. Burton s position should be considered when deciding whether to vary/depart downward Ms. Allen s criminal history. Even though Mr. Burton was the alleged victim in the child support case, he still believes Ms. Allen should not have been prosecuted and that she poses no risk of recidivism. Id. GROUNDS FOR DEPARTURE UNDER 18 U.S.C. 3553(a) Near the end of the Civil War, Abraham Lincoln was asked by his friend, Illinois Judge Joseph Gillespie, what would be done with the rebels. Mr. Lincoln on Mercy, N.Y. Times, Feb. 23, 1876, (reprinting a letter to the St. Louis Republican by Hon. J. Gillespie, Feb. 7, 1876). He pointed to the example set by King David who, after being cursed and attacked by Shimei, mercifully granted him a pardon despite others pleas for Shimei s beheading. Id. (citing 2 Samuel 19:16-24). Later in the conversation with Judge Gillespie, President Lincoln was asked what he would do with the Union s deserters. Id. He famously replied, I can t tell you; but I will say this, that I have always found that mercy bears richer fruits than strict justice. Id. It is in the spirit of President Lincoln, King David s 9

10 Case 1:13-cr ODE-GGB Document 33 Filed 01/22/14 Page 10 of 16 pardon, and the factors enumerated in 18 U.S.C. 3553(a) that Ms. Allen asks for a merciful sentence. 1. Ms. Allen s difficult childhood and tumultuous life warrant a downward departure from her Guidelines range. Under 18 U.S.C. 3553(a)(1), the Court must consider the history and characteristics of the defendant when determining the appropriate sentence. United States v. Samuels, 2009 WL , 4 (S.D. N.Y., 2009). In Samuels, the defendant faced a Guideline range of 70 to 87 months for selling crack cocaine. Id. at 3. The Court reduced the defendant s sentence to time served (15 months) and a three-year term of supervised release because she was raised by a poor, drug addicted father, and was a high school dropout. Id. at 4. In this case, Ms. Allen spent the first twelve years of her life being traumatized by an alcoholic, abusive father, regularly witnessing domestic violence in her home. By 16, she was pregnant by nonconsensual sex with a 21- year-old man. Effectively, Ms. Allen was robbed of a peaceful, stable childhood. Without ever receiving the benefit of counseling to cope with the abuse and trauma she experienced, she then married a man who was abusive, and who left her for another woman. Ms. Allen s relationships with men have always been exploitive and unhealthy; because this is the paradigm under which she spent the most formative years of her life. A toxic familial dynamic, combined with Ms. Allen s untreated/unresolved personal issues, lead her ultimately to commit the tax fraud 10

11 Case 1:13-cr ODE-GGB Document 33 Filed 01/22/14 Page 11 of 16 for which she pled guilty and is subject to sentence. Under these difficult circumstances, it is more than justified to give Ms. Allen a reasonable amount of leniency when determining her sentence, just like the court in the Samuels case. 2. The need to provide restitution is an important sentencing factor in 18 U.S.C. 3553(a)(7); and Ms. Allen cannot begin the process of restitution if she is incarcerated. In light of budget constraints imposed as part of the sequester and lingering effects of the Great Recession, the economic costs of incarceration borne by the primary victims, the American taxpayers and the U.S. Treasury, dwarf the benefits of having Ms. Allen in prison unnecessarily. At a minimum, the true cost of sentencing Ms. Allen to prison is $2, per month for her confinement plus the economy s loss of Ms. Allen s wages, approximately $3,000 per month. Alternatively, if Ms. Allen is sentenced to probation, home confinement, or a halfway house, she can work, make restitution payments, and have enough money to pay the costs associated with her sentence. The taxpayers and the U.S. Treasury would benefit much more if Ms. Allen is given a sentence that allows her to keep working. 3. A split sentence, with some combination of probation, supervised release, a halfway house, home confinement, and community service is sufficient to fulfill the purposes of sentencing outlined 18 U.S.C. 3553(a)(2). As a deterrent, [v]igorous enforcement of the tax laws, in cases that do not get a lot of 11

12 Case 1:13-cr ODE-GGB Document 33 Filed 01/22/14 Page 12 of 16 press, is what really deters tax evaders. See United States v. Gardellini, 545 F.3d 1089, 1091 (D.C. Cir., 2008). In Gardellini, the defendant pled guilty to a violation of 18 U.S.C. 7206(1) (filing a false tax return), and faced a Guideline range of 10 to 16 months imprisonment. Id. at The Court sentenced the defendant to five years probation and a $15,000 fine based on a number of 18 U.S.C. 3553(a) factors. First, the fact that the defendant accepted responsibility for his crimes by not putting the United States through its paces but owned up to his crime. Id. at Second, the defendant posed little risk of recidivism. Id. Third, the court noted that the defendant suffered substantially in the form of depression and stress because of his prosecution. Id. Finally, the court recognized how effective vigorous enforcement of the tax laws was as a deterrent. Id. In this case, the Government has vigorously investigated and prosecuted Ms. Allen. No aspect of her life was spared from scrutiny by the IRS, the Justice Department, or the Probation Officer doing her Presentence Report. In addition to her guilty plea and the sentence she will receive, Ms. Allen consented to an injunction that allows the Government to conduct discovery against her for the rest of her life to monitor her compliance with the tax laws. Exhibit 2. Ms. Allen s life has been turned upside down by her actions; and she will live the rest of her life with the shame of a felony tax conviction, fines, restitution, and compliance monitoring by the Tax Division of the Department of Justice. On top of those 12

13 Case 1:13-cr ODE-GGB Document 33 Filed 01/22/14 Page 13 of 16 aforementioned consequences, a combination of a lengthy probation, supervised release, home confinement or a halfway house would be more than enough of a deterrent of future criminal activity contemplated under 18 U.S.C. 3553(a)(B). Like the defendant in Gardellini, Ms. Allen owned up to her fraud, accepted responsibility, and did not put the Government to its paces by not filing any pretrial motions or engaging in unnecessary discovery. In addition, she has suffered tremendously experiencing depression, anxiety, stress, and the looming prospect of causing her daughter to drop out of college. Exhibit In accordance with 18 U.S.C. 3553(a)(2)(D), mental health treatment can and should be a requirement of any sentence to home confinement, probation, or a halfway house. Ms. Allen wants mental health treatment, and is ready to begin the difficult process of learning to cope with all of the damage done by a tumultuous childhood, marriage, and conviction for tax fraud. 4. Regarding the kinds of sentences available, contemplated in 18 U.S.C. 3553(a)(3), probationary sentences, in lieu of imprisonment, were approved of by the Supreme Court in Gall. The Court noted that while custodial sentences are qualitatively more severe than probationary sentences of equivalent terms[,] [o]ffenders on probation are nonetheless subject to several standard conditions that substantially restrict their liberty. 552 US at 48. Due to the substantial restrictions on a defendant s liberty, [p]robation is not granted out of a spirit of 13

14 Case 1:13-cr ODE-GGB Document 33 Filed 01/22/14 Page 14 of 16 leniency, and is not merely letting an offender off early. Id. at 48, n.4 (quotation marks and citation omitted). Probation for Ms. Allen s offenses is also available as an option under 18 U.S.C because the offense is a Class E felony. Additionally, split sentences consisting of home confinement, probation, or a halfway house are also available. See United States v. Weisberg, 297 Fed. Appx. 513, 515 (6 th Cir., 2008). 5. In accordance with 18 U.S.C. 3553(a)(6) (avoiding disparities), recent tax evasion/fraud cases have lead to a wide range of sentences displaying the courts willingness to impose alternative sentences well below the Guidelines range. In United States v. Warner, No. 1:13-cr-731 (Il. N.D., 2013), the defendant faced a Guideline range of 46 to 57 months after pleading guilty to a multimillion dollar tax evasion charge; however, the court sentenced him to two years of probation, community service, a $100,000 fine, and the cost of prosecution. In another tax evasion case, United States v. Weisberg, the defendant-attorney faced a Guideline range of 18 to 24 months; however, he received a significantly lower sentence 10 months split into 5 months of imprisonment and 5 months of home confinement, and three-years of supervised release. 297 Fed. Appx. 513, 515 (6 th Cir., 2008). Finally, in United States v. Al-Suqi, the defendant, found guilty at trial of aiding tax fraud in violation of 18 U.S.C. 7206(2), faced a calculated Guidelines range of 78 to 97 months and restricted Guideline range of 60 months. 14

15 Case 1:13-cr ODE-GGB Document 33 Filed 01/22/14 Page 15 of WL (E.D. Va., 2013). The court sentenced him to 36 months, a 40% reduction from the restricted Guideline range. Id. These recent cases illustrate the wide discretion courts have when deciding a sentence for tax offenses. CONCLUSION For the foregoing reasons, Ms. Allen respectfully submits that a sentence of a period of probation, home confinement, a halfway house, community service, or any combination of them, in lieu of a term of imprisonment, would be sufficient, but not greater than necessary, to achieve the goals of sentencing in this case. Respectfully submitted this 21 st day of January, S/Elliott H. Baer Elliott H. Baer Georgia State Bar No Counsel for Roberta Allen 15

16 Case 1:13-cr ODE-GGB Document 33 Filed 01/22/14 Page 16 of 16 CERTIFICATE OF SERVICE This is to certify that I have this day served a correct copy of the within and foregoing with the Clerk of Court using the CM-ECF system which will automatically send notification of such filing to opposing counsel: Bernita Malloy, Esq. Assistant United States Attorney Office of the United States Attorney Northern District of Georgia 75 Spring Street, SW 600 United States Courthouse Atlanta, Georgia This 21 st day of January, The Baer Firm, LLC Two Midtown Plaza, Suite West Peachtree Street Atlanta, Georgia S/Elliott H. Baer Elliott H. Baer Georgia State Bar No