One of the defendants, Charles Bolton, pled guilty to a single conspiracy count alleging a conspiracy with three objectives -- a defraud /
Klein objective and a two offense objectives and objectives (false statement (18 USC § 1001,
here) and to impair and impede the IRS (§ 7212(a),
here). The trial judge sentenced Bolton to a 15 month term of imprisonment and imposed a $3 million fine. Bolton appealed both this term of imprisonment and his fine. Just a couple of comments before moving to the sentencing:
- Plea agreements usually have a term waiving appeal with, in some cases, appeal permitted on some issues; apparently Bolton's permitted an appeal on these issues;
- This conspiracy count was different from the conspiracy count on which the others were tried which involved a defraud / Klein conspiracy objective and two offense objectives (evasion (§ 7201, here) and false statement (18 USC § 1001).
- The assertion of a defraud / Klein conspiracy and an offense conspiracy to violated § 7212(a) seems to be redundant. What am I missing here? The redundancy, if it exists, is irrelevant to any real world issue, but it seems odd. (At one point, DOJ Tax in the CTM described § 7212(a) as a one person Klein conspiracy, so the concept of a conspiracy to commit a conspiracy is odd.)
Now, moving to the facts, Bolton, the operator of an investment firm used to implement investing strategies for the shelters, was involved in the concerted action among the defendants. For example, Bolton proposed a the following "cover story" for a shelter that the trial defendants adopted to pass on to the IRS:
That cover story attributed a key step in the Add-On transaction—the transfer of digital options from the individual partnership to a newly formed LLC—to a request from trader Andrew Krieger to consolidate accounts for administrative convenience. There was no meaningful dispute at trial that the "consolidation cover story" was false.
On appeal, Bolton challenged the procedural and substantive reasonableness of his 15 month sentence.
