Guilty Plea for a U.S. Offshore Account Enabler (5/26/15; 5/27/15)

DOJ Tax has announced, here, a perjury conviction for an Indiana resident, Alexander Krivosuz.  The offense is described cryptically as follows:

According to the indictment, court documents and statements made at the court proceeding, Alexander Krivozus committed perjury by testifying falsely during the course of a federal grand jury investigation of Cleveland resident, Edward Gurary, who ultimately pleaded guilty in March 2011 to one count of filing a false income tax return on which he wilfully failed to report his Swiss bank accounts.  As part of the investigation, bank records indicated that Gurary directed UBS AG to wire funds from his undeclared Swiss bank account, which was held in the name of a nominee Bahamian entity, and requested that confirmations of the transfers be sent to a U.S. fax number in the (317) area code.  The investigation established that the fax number was associated with Krivozus.  He was subpoenaed to testify before the federal grand jury and testified falsely. 

My blog entry on Gurary's plea is even more cryptic: Another Plea for Taxpayer with UBS & Credit Suisse Accounts (Federal Tax Crimes Blog 3/8/11), here.

I tried to pull down the plea agreement from the docket entries on Pacer, but the plea agreement was sealed.  That perhaps explains why the press release is so cryptic.

I was able to pull down the indictment, which is here.  The indictment states the Counts as follows:  False Statements to Law Enforcement (18 USC 1001, Two Counts),  False Declarations Before a Grand Jury (18 USC 1623(a), One Count), and Obstruction of Obstruction of an Official Proceeding (18 USC1512(c)(2), 1 Count).

Addendum 5/27/15 2:00 pm:

I have now looked over the indictment.  It is fairly standard for the type of charges made, so I won't comment on the general thrust of the indictment.

I did pick up an item that interested me.  The indictment alleges as follows:

The Criminal Investigation of Edward Gurary

18. From on or about August 18, 2009, through at least February 16. 2011, the Internal Revenue Service- Criminal Investigation (IRS-CI), part of the executive branch of the Government of the United States, acting within its jurisdiction, in coordination with the United States Department of Justice (DOJ), the United States Attorney's Office for the Northern Division of Ohio, and a federal grand jury in the Northern District of Ohio, Eastern Division, conducted an investigation of Edward Gurary pertaining to his federal income tax returns and other federal tax obligations. The investigation began after UBS bank provided DOJ with records of Gurary's Demko account, the existence of which and income from which Gurary had not reported as required on a number of federal income tax returns he filed with the IRS. Gurary had also failed to report his ownership of the Demko account to the IRS on a Form TD F 90-22.1 (Report of Foreign Bank and Financial Accounts, also known as "FBAR"), which was a separate form a taxpayer was required to file with the IRS to disclose additional information about such foreign financial accounts having an aggregate value exceeding $10,000 at any time during the year.

The compulsory process alleged in paragraph 21 is a grand jury subpoena.

Paragraph 18 (quoted above) says in critical part that the IRS "conducted an investigation" in coordination with DOJ [Tax], USAO and a grand jury.  Perhaps I quibble.  I don't think an investigation as described can lawfully occur.  There is a single investigation -- a grand jury investigation.  That investigation has actors other than the grand jury members.  Those actors are the attorney(s) for the Government (see e.g., FRCrP 6(d)(1) and (e)(3)(A)) and other government personnel "necessary to assist" the attorney(s) for the Government (FRCrP 6(e)(3)(B)).  IRS agents are usually assigned to assist grand jury investigations and, in that capacity, serve as assistants to the grand jury.  In these investigations, the attorney(s) and the assistants assist the grand jury in the grand jury investigation.  The investigation is not a joint investigation of the agencies mentioned, which seems to be the purport of the statement alleged.

FRCrP Rule 6 may be viewed here.

For that reason, I wonder whether Counts 1 and 2 are proper counts.  They allege the crime of false statements under 18 USC 1001, here.  Section 1001, here, requires that the matter be "within the jurisdiction of the executive, legislative, or judicial branch of the Government of the United States." The statements were made to the DOJ Attorney and the IRS agent who appear to have been serving in their roles as attorney and assistant to the grand jury, respectively.  The grand jury is not within the jurisdictions described in § 1001, because the grand jury functions independent of the executive, legislative and judicial branches.  See United States v. Williams, 504 U.S. 36, 48 (1992), here, which I quote:

"[R]ooted in long centuries of Anglo-American history," Hannah v. Larche, 363 U.S. 420, 490 (1960) (Frankfurter, J., concurring in result), the grand jury is mentioned in the Bill of Rights, but not in the body of the Constitution. It has not been textually assigned, therefore, to any of the branches described in the first three Articles. It "`is a constitutional fixture in its own right.'" United States v. Chanen, 549 F.2d 1306, 1312 (CA9 1977) (quoting Nixon v. Sirica, 159 U.S.App.D.C. 58, 70, n. 54, 487 F.2d 700, 712, n. 54 (1973)), cert. denied, 434 U.S. 825 (1977). In fact, the whole theory of its function is that it belongs to no branch of the institutional Government, serving as a kind of buffer or referee between the Government and the people. See Stirone v. United States, 361 U.S. 212,218 (1960); Hale v. Henkel, 201 U.S. 43, 61 (1906); G. Edwards, The Grand Jury 28-32 (1906). Although the grand jury normally operates, of course, in the courthouse and under judicial auspices, its institutional relationship with the Judicial Branch has traditionally been, so to speak, at arm's length. Judges' direct involvement in the functioning of the grand jury has generally been confined to the constitutive one of calling the grand jurors together and administering their oaths of office. See United States v. Calandra, 414 U.S. 338,343 (1974); Fed. Rule Crim. Proc. 6(a).  

The grand jury's functional independence from the Judicial Branch is evident both in the scope of its power to investigate criminal wrongdoing and in the manner in which that power is exercised. "Unlike [a] [c]ourt, whose jurisdiction is predicated upon a specific case or controversy, the grand jury `can investigate merely on suspicion that the law is being violated, or even because it wants assurance that it is not.'" United States v. R. Enterprises, Inc., 498 U.S. 292, 297 (1991) (quoting United States v. Morton Salt Co., 338 U.S. 632, 642-643 (1950)). It need not identify the offender it suspects, or even "the precise nature of the offense" it is investigating. Blair v. United States,250 U.S. 273, 282 (1919). The grand jury requires no authorization from its constituting court to initiate an investigation, see Hale, supra, at 59-60, 65, nor does the prosecutor require leave of court to seek a grand jury indictment. And in its day-to-day functioning, the grand jury generally operates without the interference of a presiding judge. See Calandra, supra, at 343. It swears in its own witnesses, Fed. Rule Crim. Proc. 6(c), and deliberates in total secrecy, see United States v. Sells Engineering, Inc.,463 U.S. 418, 424-425 (1983).

I have not exhaustively researched this issue, but I did find some case notes that, as presented, seem to address the issue (this is from LEXIS-NEXIS version of Code 18 USC 1001 with annotations:

Defendants' statements were exempt from prosecution pursuant to "judicial function" exception to 18 USCS § 1001, where they were made to FBI agents acting under authority of grand jury, as specifically stated by indictment, and as demonstrated by fact that they served subpoena duces tecum on defendants' business records for that grand jury. United States v Wood (1993, CA10 NM) 6 F3d 692 (criticized in Hubbard v United States (1995) 514 US 695, 131 L Ed 2d 779, 115 S Ct 1754, 95 CDOS 3581, 95 Daily Journal DAR 6212, 9 FLW Fed S 3). 

Defendant had been improperly indicted under 18 USCS § 1001 because federal grand jury is not "agency of the United States" within meaning of section, and because section was not intended to cover situation in which defendant is accused of having made false and fraudulent reply when interrogated by grand jury. United States v Allen (1961, SD Cal) 193 F Supp 954.

I was unable to determine that Hubbard, here, criticized this aspect of the holdings.  I further note that Section 1001 was expanded in 1996 to cover legislative and judicial branches.

I would appreciate readers' learning on this issue.