Michael Thiel, 66, a resident of Baton Rouge, Louisiana, pleaded guilty to one count of evading the payment of federal income and employment taxes for 2003 through 2013. According to documents filed with the court, Thiel operated a criminal defense law practice in Hammond, Louisiana. Despite earning substantial income through his law practice, Thiel did not timely file income tax or employment tax returns, and did not timely pay tax due and owing to the United States. Thiel agreed that as of April 30, he owed federal income tax, penalties and interest totaling $736,527, and employment tax, penalties and interest totaling $261,725.
In January 2007, in an effort to conceal the ownership of his property and evade the payment of his tax liabilities, Thiel used nominees and the trusts he beneficially owned to purchase his principal residence for $435,000. The nominees obtained a mortgage on the principal residence, and used a nominee bank account beneficially funded by Thiel to make the payments. Thiel entered into a lease agreement with the nominees to falsely characterize the monthly mortgage payments as rent. In addition, between January 2007 and January 2014, Thiel deposited $416,283.56 into the nominee bank account with funds from the trusts and other accounts not held in his name.
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Pursuant to the plea agreement, Thiel faces a maximum sentence of 37 months in prison * * * *.The key documents are:
- The Information, here.
- The Plea Agreement, here.
- The Fact Statement, here.
- The Minute Entry for the Plea Hearing, here.
1. The plea is to one count of tax evasion under § 7201, here, which has a maximum sentence of five years. However, the plea is a special plea pursuant to Rule 11(c)(1)(C), FRCrP, here, which permits the parties to "agree that a specific sentence or sentencing range is the appropriate disposition of the case, or that a particular provision of the Sentencing Guidelines, or policy statement, or sentencing factor does or does not apply (such a recommendation or request binds the court once the court accepts the plea agreement)." In this case, the plea agreement specifies a maximum sentence at the top of the indicated guidelines range at the agreed offense level of 19 (reflecting a stipulated tax loss in the range $550,000 to $1,500,000 for purposes of Sentencing Guidelines 2T1.1 and 2T4.1 and a 3-level reduction for acceptance of responsibility reduction). The tax evasion count to which Thiel pled is a five-year felony under § 7201, here. At the plea hearing, the judge deferred approving the Rule 11(c)(1)(C) agreement until it has reviewed the sentencing report.
2. The type of tax evasion is evasion of payment based on self-assessed individual and employment tax returns Thiel filed without payment. In order to hide assets that could be levied by the IRS for payment, he used a trust, styled a family trust, and nominees. He did file those returns, sometimes substantially later than the due date. The information is worded to accept the tax due based on his filing. With that tax due assessed, he then evaded payment.
3. As usual in plea agreements, the defendant agrees to pay restitution which, to the extent not previously assessed, will be assessed under § 6201(a)(4), here. In this case, the taxes in the information have already been assessed, but the tax loss has a sufficiently wide range that unassessed tax loss could also be included by the time of sentencing.
4. Otherwise, the plea agreement is more or less standard.