Tuesday, January 15, 2013

Defendant Screws Up His Acceptance of Responsibility (1/15/12)

In United States v. Bigica, 2013 U.S. Dist. LEXIS 3772 (D NJ 1/10/13), an unpublished decision, the Court denied the defendant, who had pled to a tax obstruction count and an elections count, the 3 level Sentencing Guidelines downward adjustment.  The reason:  Although the defendant claimed remorse, his actions after the time of the guilty plea continued the obstructive conduct.  Hence, this defendant got no benefit from pleading guilty, and saving the Government and the court the time and expense of trial.  Not only that, his obstructive conduct convinced the judge to sentence him at the top of the unreduced Guideline range.

The opinion is quite a read, but I can summarize it here as to the tax charge -- Section 7212(a), here, criminalizing corrupt attempts to interfere with the administration of the internal revenue laws.  The defendant, although making large income over many years, failed to file tax returns and, when the IRS started inquiring into his failure to file, took a series of steps to put his assets beyond the IRS's ability to collect what he knew would be a large tax liability, all the while living a lavish lifestyle.  The problem was that, even after the plea to one tax obstruction count and one election law count, he continued to live a lavish lifestyle, secreting money, not truthfully accounting for his assets, and failing to pay the IRS.

The court first resolved a grouping issue against the defendant, requiring a 2 level increase because, the court determined, the two counts of conviction did not arise from the same harm.

The Court then turned to acceptance of responsibility which the defendant hoped to achieve by virtue of his guilty plea.  The probation officer gave a marginal recommendation for the 3-level downward adjustment.  But, the Court rejected the adjustment because the defendant had continued his obstructive conduct even after the plea and while dealing with the Probation Office.  The Court details the defendants obstructive behavior.  Key quotes (one footnote omitted):
This Court has not had another defendant in over a dozen years on the bench who has shown this level of continued financial evasion in his representations to the United States Probation Department. Defendant was untruthful, cavalier and evasive to the United States Probation Office regarding his financial status and his ability to pay restitution. In addition, while Defendant stated in his plea agreement his intention to make "full restitution," he failed to pay anything toward restitution during the long interval between the plea and sentencing, despite earning nearly $1,000,000.00 in 2011 and more than $40,000.00 per month for each of the first six months of 2012. And, while earning such huge sums, Defendant continued to pay for lavish luxury expenses of others, including, but not limited to, a monthly mortgage payment of $19,563.00 ($234,756.00 annually) for a mortgage on a home he insists is not his own asset.  * * * *
The plea agreement in this case stated that "with respect to Count 1, Joseph Bigica agrees to make full restitution for all losses resulting from the offense of conviction or from the scheme, conspiracy, or pattern of criminal activity underlying the offense, to the Internal Revenue Service in the amount of $2,141,836." Plea Agreement at 3. 12 Defendant also agreed that he would pay all taxes due for calendar years 1999-2010, along with any penalties owed on those returns. Id. at 4. In the seven months since Defendant plead guilty, Defendant has not paid a dime toward restitution. In light of the fact that Defendant had an adjusted gross income of $993,548 in 2011 and made over $40,000 per month in the first six months of 2012, and in light of the fact that the principal amount of restitution had been agreed upon in the plea agreement, Defendant certainly could have opened his hefty wallet to begin paying his restitution obligation. He could have done something to show that this obligation had a higher priority than luxury goods for his family. Instead, Defendant chose to use his high income to pay leases on three luxury cars for his wife and children. Rather than meeting his obligation to the United States Government to pay his $2 million income tax arrearage, Defendant instead used the money to continue his lavish lifestyle. This was a crime motivated by greed and vanity and yet Defendant, until the date of sentencing, continued to live his lavish lifestyle, e.g., leasing luxury automobiles and utilizing an expensive pool service, and depleting his own available assets by diverting money to his wife by paying $19,563.00 a month for a mortgage on a home he contends is not his asset, and thus will claim cannot be seized to pay his restitution or IRS penalties. 
In addition, this Court concluded at sentencing that Defendant failed to be forthcoming with the United States Probation Office about his financial status, and in fact, that he engaged in material misrepresentations to the probation officer about his financial status. This is further strong evidence of an absence of genuine acceptance of responsibility, which must be balanced with all of the other circumstances surrounding a defendant's particular case. Defendant was not compliant with the repeated requests of the United States Probation Office for financial information. Defendant was asked by the probation officer on several occasions to provide his 2011 tax return. Defendant never complied. Finally, on the day before sentencing, when the 2011 tax return had still not been provided, this Court entered an order requiring it to be provided immediately. Only then, did Defendant submit his 2011 tax return revealing his $993,548.00 income. There was planning and logic to Bigica's decision to withhold and obfuscate his financial picture from the probation officer, whom he had tried to convince that he had a net worth of merely $13,910. 
The Court elaborates other details of obfuscation and obstruction
The most succinct way to describe Defendant's behavior subsequent to the entry of his guilty plea is that he continued to engage in the same sort of deceptive behavior that resulted in the conviction on both counts in this case. This is not what "acceptance of responsibility" means.
Most disturbing to this Court, after Defendant entered his guilty plea, he continued to take calculated steps to conceal assets from the probation officer, who is an arm of the Court. While in a different context, this mindset is essentially the same mindset as the heartland of the crimes to which he plead guilty. In short, Mr. Bigica has not learned his lesson.
The parties had stipulated in the plea agreement that no departure would be requested, so defendant was left to argue for a Booker variance.  However, with the above findings, it was clear that no Booker variance would be forthcoming.  Then, having determined the Guidelines range at 51 to 63 months, the Court sentenced him to 60 months, the maximum (since the court applied the two sentences of 36 and 60 months to run concurrently, the maximum sentence that could be imposed was 60 months for the elections count).  It could have been worse, however; the Court could have had the sentence on the counts of conviction run consecutively, thus making the maximum sentence 96 months, easily accommodating a maximum Guidelines sentence and even an upward Booker variance.  Indeed, I am a bit surprised that the Court did not do that.

And, of course, that type of obstructive conduct might also be separately criminally prosecuted, but I doubt that the Government will want to spend any more time on this guy (unless he keeps it up).

1 comment:

  1. The entire decision is a real "page turner"


    Illegal campaign contributions, tax evasion, etc...


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