Prevention of use of Forms 1099 held to be fraudulent

In order to prove a conspiracy to defraud the United States in violation of 18 U.S.C. § 371 the Government must prove beyond a reasonable doubt: (1) the existence of an agreement to defraud the United States; (2) the defendant's participation in that agreement with the intent to defraud the United States; and (3) an overt act by one of the conspirators in furtherance of that objective. United States v. McKee, 506 F.3d 225, 238-44 (3d Cir. 2007); see also Gambone, 314 F.3d at 176. Where a defendant is charged with a "Klein" conspiracy, as Defendant is here, the "agreed-upon objective must be to impede the IRS" from its lawful collection of federal income taxes. See United States v. Gricco, 277 F.3d 339, 348 (3d Cir. 2002); see also United States v. Klein, 247 F.2d 908 (2d Cir. 1957).


United States v. Thomas L. Root, U.S. District Court, East. Dist. Pa.; 07-149, June 10, 2008.

[ Code Sec. 7201]

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The director of a television station was properly convicted of tax evasion and conspiracy to defraud the government. The government showed that the individual had conspired with the station's president to impede the IRS from imposing taxes on their commissions received from the station by assigning them to various LLCs and instructing the corporation's bookkeeper to avoid issuing Form 1099s to those LLCs. The individual used similar techniques to evade taxes on the income earned from his legal services. Further, a single count charging the individual with tax evasion covering several years was not duplicitous when the director exhibited the same pattern of evasive conduct for all those years. Finally, the director was not entitled to a new trial because he could not establish a Brady violation or show that the trial court erred in summarizing the indictment's allegations in the jury charge.