Friday, February 13, 2009

Continuing Offense Doctrine - the Last Act of Evasion

A decision by the Eight Circuit reminds us of the importance of focusing on the last act in furtherance of a tax crime is committed. In Sansone v. United States, 380 U.S. 343, 354 (1965), the Court stated that the crime of tax evasion is "complete as soon as the false and fraudulent understatement of taxes . . . was filed." That might suggest that any measureme of a time frame for the crime would commence on the return filing date. However, in United States v. Beacon Brass Co., Inc., 344 U.S. 43 (1952), the Supreme Court held that the date of filing a fraudulent return, while normally the date from which to measure the start of the statute of limitations for criminal prosecution for evasion, is not necessarily the last act in furtherance of the evasion. Any subesequent act -- such as making false statements to an agent in an audit in order to further hide the evasion in the return -- can refresh the statute of limitations on the original evasion (as well as constitute a separate crime under 18 USC 1001). In Beacon Brass, that was not a good result because the statute of limitations on the original fraudulent return had otherwise expired.

In United States v. Barker, 556 F.3d 682 (8th Cir. 2009), here, the Court applied that concept in the context of determining which Sentencing Guidelines applied to the offense of conviction. The Guidelines when the fraudulent return was filed were more lenient than the later Guidelines when the defendant committed a further evasive act. Although not citing Beacon Brass, the Court held under the same concept, which the court called the continuing offense doctrine, that the later book applied. In Barker, that meant that the later, more stringent Guidelines regime applied. The Court of Appeals remanded the case for calculations under those more stringent Guidelines and reconsideration of the sentence giving proper regard to those calculations.

Barker may be able to avoid or mitigate a greater sentence upon the remand. Under the post-Booker regime which gives the sentencing judge leeway to fashion an appropriate sentence even if the sentence varies from the result indicated by the Guidelines calculation. Indeed, if in imposing the original sentence, the judge made a determination of an appropriate sentence (albeit without the "guidance" of the appopriate Guidelines calculation), it may well be that the original sentence was not necessarily influenced materially by the calculation under the more lenient Guidelines.

In its recent decision in Nelson v.United States, 555 U.S. 350 (2009), here, the Court reminded the district courts that they are not to presume that the Guidelines calculations are reasonable, but must make the more refined, difficult, and tailored sentence determinations required by the statute. Hence, to repeat, if the district judge did that the first time, maybe he'll go there again.

As a side note, those who delight in this nuance that the sentencing judge may impose the same sentence when the Guidelines have been misapplied may find sheer joy in today's Seventh Circuit decision in United States v. England, 604 F.3d 460 (7th Cir. 2009), here (see particularly the last paragraph, although the whole opinion is marvelous).

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