D.C. District Court Dismisses Tax Evasion and Tax Perjury Counts for Lack of Venue in D.C. (7/23/26; 7/26/26)

In United States v. O’Donoghue, ___ F.Supp.4th ___ (D.D.C. 7/22/26), the Court (Judge Colleen Kollar-Ketelly) dismissed 8 Counts of a 9 Count indictment for lack of venue in the District of Columbia. The opinion can be viewed: CL here, TN  here, and GS here; the indictment can be viewed: CL here. The dismissed Counts were for tax evasion § 7201 and subscribing to false tax returns § 7201(1) (aka tax perjury). The undismissed count (Count 9) was for making false statements in a proffer session at DOJ offices in D.C., in violation of 18 U.S.C. § 1001.

This post will initially be a notice of the opinion with limited comment. I will post further analysis tomorrow. In the meantime, my initial reading is that it covers a lot of ground familiar to fans of tax crimes (the study rather than the commission). I say that because many leading tax crimes cases make at least a cameo appearance in the opinion.

The overall crux of the case is Constitution Article III’s requirement that trial “of all Crimes . . . shall be held in the State where the said Crimes shall have been committed.” This limits statutes that might otherwise permit venue elsewhere. The Government was relying upon such statutes to permit venue. More on this later. The Government was also arguing that the essential conduct for the 8 dismissed counts included conduct that was outside the U.S., thus permitting venue in the District of Columbia. The Court swatted that down. More on this later.

So, I will just post my quick reactions here and be back with more tomorrow.

1. The lawyering for O’Donoghue appears to have been great! He had good counsel, identified in CL here (click the Parties and Attorneys tab). I haven’t read the briefs but may do so tomorrow or even later—emphasize may because I am otherwise busy). I assume that there was good briefing because I infer that the Court worked from the submissions. Added 7/24/26 4:00pm: The CL Docket Entries are here (some with links to the briefing at ## 79, 89, 95 & 113 (all of . those key documents can be viewed rom the CL docket sheet, except the first; if someone who has joined CL will the CL docket sheet and retrieve it from PACER, it should show up on the CL Docket Sheet; I messed it up on PACER and PACER will not let me retrieve it again.)

2. This may be a pyrrhic victory because, even if the statute of limitations has otherwise closed, 18 U.S.C. § 3288, here, extends the statute of limitations for 6-months after dismissal, assuming an original timely indictment in D.C. Thus, it appears that the Government can seek an indictment in the Western District of Texas which will be a bit of an inconvenience because the undismissed Count (Count Nine, for false statements) will presumably be tried in the District of Columbia, which could add major costs to the Government and O’Donoghue.

Added 7/24/26 1:15pm:

Case with Good Discussion of Venue for Tax Evasion Charges (12/10/17)

In United States v. Michael Sang Han, 2017 U.S. Dist. LEXIS 198609 (D. D.C. 12/1/17) (Criminal Action No. 15-142 (JEB)), which I do not link because I provide everything relevant to this post in the post), the Court starts the opinion with this introduction:

Defendant Michael Han allegedly promised investors that his company Envion would usher in a black gold rush by turning plastic back into oil. According to the Government, although that concept never materialized, it did not stop Han from stringing along his financers, ultimately defrauding them out of nearly $40 million. With trial a couple of months away, Defendant now brings several Motions challenging the validity of the Indictment. Specifically, he asks the Court to: (1) require the Government to provide a bill of particulars; (2) dismiss Counts 10 and 11 as lacking venue [for the tax evasion counts]; (3) dismiss Count 12 for first-degree fraud as duplicative of the wire-fraud charges (Counts 1 and 2); and (4) dismiss Count 3 for securities fraud as failing to state an offense. Finding no merit in any of these positions, the Court will deny all of the Motions.

I offer here the Court's discussion of the disposition of the tax evasion venue motion.  Students of tax crimes should find it useful.  I think the Court's discussion is pretty good.  However, for those who want more background and context, I offer here the venue chapter from the latest working draft of my Federal Tax Crimes book which is good through about 2015 and is still good on venue.  (That book is now discontinued because I offer a substantially overlapping Chapter on tax crimes in Michael Saltzman and Leslie Book, IRS Practice and Procedure (Thomsen Reuters 2015).)

The Court's tax evasion venue discussion in Han is as follows:

B. Venue (Counts 10 and 11) 

Han next moves to dismiss the tax-evasion counts (10 and 11) on the ground that venue is not proper in the District. See ECF No. 45. The Government has a choice of forum in which to prosecute but still ultimately bears the burden of establishing proper venue by a preponderance of the evidence. See United States v. Lam Kwong-Wah, 924 F.2d 298, 301 (D.C. Cir. 1991). The Court views such evidence in the light most favorable to the Government when determining whether it has done so. Id. 

The Indictment charges Han with violations of 26 U.S.C. § 7201, the prosecution of which requires a willful "affirmative act constituting an evasion or attempted evasion of" a tax deficiency. Sansone v. United States, 380 U.S. 343, 351 (1965). Tax evasion is a continuing offense, meaning that it may be prosecuted in any jurisdiction "through which a process of wrongdoing moves." United States v. Johnson, 323 U.S. 273, 276 (1944); see also 18 U.S.C. § 3237(a) (allowing for "any offense against the United States [that is] begun in one district and completed in another, or committed in more than one district" to be "prosecuted in any district in which such offense was begun, continued, or completed"). The offense is not completed until the person's tax return is filed, signed, and mailed, but it begins whenever the defendant makes a "willful attempt to defeat and evade" tax liability. Spies v. United States, 317 U.S. 492, 499 (1943). Venue is thus proper in any district where the defendant "beg[a]n, continued, or completed" an affirmative act with a "tax evasion motive." United States v. Strawberry, 892 F. Supp. 519, 521 (S.D.N.Y. 1995). 

Here, Han argues that § 7201 requires that he commit an act while actually present in the District, which he believes the Government has not sufficiently alleged. Defendant is correct that the Indictment does not state that Han committed any act with a tax-evasion motive while in D.C. Instead, it alleges that he (1) "cause[d]" a fax to be transmitted "from the District directing the transfer of $20 million to" his personal bank account, see Indictment, ¶ 46, and (2) provided false information to Envion bookkeepers who were located in D.C., which resulted in the creation of false business records. Id., ¶¶ 52, 54. Han acknowledges that the Indictment contains information that he interacted with individuals within the District but contends that he "cannot be subject to venue in the District of Columbia due to the alleged acts of a third party." ECF No. 57 (Reply) at 4; see Mot. at 2 (noting that Indictment "claims that [he] concealed information from, or misled, unnamed Envion employees who were allegedly located in the District of Columbia for some period of time").

Court Rules on Pretrial Motions for Venue, Evidence and Other Matters (12/25/15)

In United States v. Barrett, 2015 U.S. Dist. LEXIS 171727 (ED NY 2015), here, the defendant was charged with submitting false claims to the U.S., money laundering, tax perjury at the individual and corporate levels, and aiding and assisting at the corporate level.  The principal locus of the non-tax offenses was the Eastern District of New York (EDNY).  The defendant resided and filed his tax returns from the Southern District of New York (SDNY) and his tax return preparer did his work from SDNY.  The tax omissions related to the income allegedly at the center of the nontax crimes.  Asserting improper venue in EDNY, the defendant initially moved to transfer the tax counts to SDNY, and then moved to dismiss the tax counts.  In this opinion, the Court rejects the venue assertions as, on the facts, premature at this stage and deals with some other issues related to the evidence and bill of particulars.  I will address certain points here.

Prior to moving to the issues, there is an interesting cryptic statement of the nature of the allegations based on an undercover operation with respect to certain drug stores defendant directly or indirectly owned.  The indictment charge the defendant ""submitted and caused the submission of claims for reimbursement to Medicare and Medicaid for drugs purportedly dispensed from [the drug stores] which were in fact never dispensed to Medicare or Medicaid beneficiaries."  A key part of the evidence:

Three undercover patients entered Economy Drug with prescriptions that [4]  also allowed for refills. (Id.; see also Gov't Resp. at 2.) After defendant properly filled and billed the initial subscriptions, the undercover agents did not request or receive refills of their prescriptions. (Indictment P 25.) The government contends that defendant nevertheless billed Medicaid for the additional refills. (Id.)

1.  Venue.

Venue for tax crimes is generally where the defendant resides, signs the return or files the return.  However, 18 USC § 3237(b), here, provides that, where venue

is based solely on a mailing to the Internal Revenue Service, and prosecution is begun in a judicial district other than the judicial district in which the defendant resides, he may upon motion filed in the district in which the prosecution is begun, elect to be tried in the district in which he was residing at the time the alleged offense was committed.

But, the provision further provides that the motion must be filed within 20 days after arraignment.  That was the first problem with the motion.  It was filed five months after arraignment on the initial indictment.

The second problem was that venue was not based solely on mailing to the IRS as expressly required for the provision to apply.

SDNY District Court Denies Statute of Limitations and Venue Motion for Offshore Account Defendant (6/18/15)

In United States v. Canale, 2015 U.S. Dist. LEXIS 78619 (SDNY 2015), here, the defendant, Peter Canale, is charged with a defraud / Klein conspiracy and an offense conspiracy (both in one count). See 18 USC § 371, here.  These counts relate to foreign bank accounts with the use of sham entities.  See also my prior blog on this indictment:  Another UBS/Wegelin Related Indictment in SDNY (Federal Tax Crimes Blog 11/19/14), here.  In addition, Peter Canale's brother previously pled guilty to an FBAR and tax perjury violation for offshore accounts.  See U.S. Taxpayer Pleads to FBAR and Tax Perjury Violation (3/14/13), here.  Finally, see the USAO announcement of the indictment, here, which notes that Peter is alleged to have conspired with his brother, Michael, among others.

In the opinion, the court denies Peter Canale's request for dismissal on statute of limitations grounds and for change of venue to the state of Kentucky where he resides.  Michael Canale, a co-conspirator, resided in Jupiter, Florida and was charged and pled in SDNY.

The court's resolution of the issues are fairly routine.  The bullet points are:

1. The conspiracy charge is for a continuing offense so long any co-conspirator commits an act in furtherance of the charged conspiracy.  Here, there were acts in furtherance of the charged conspiracy well within the statute of limitations.

2. Venue is proper in any district where acts in furtherance of the charged conspiracy occurred.  Here, the indictment alleges several acts in SDNY.  Those acts were "part and parcel of the charged conspiracy."  The court does go through the so-called Platt factors (Platt v. Minnesota Min. & Mfg. Co., 376 U.S. 240, 243-44 (1964)), here, finding that, although a Kentucky forum might be more convenient for the defendant, the defendant is not unduly prejudiced by trial in SDNY.

A key takeaway is the scope of the choices that the Government has for venue in conspiracy cases.   I doubt that any conspiracy includes planning to limit a prosecutor's venue choices, but still conspirators should put this on the check list in planning the conspiracy.

The Government did not arbitrarily pick the SDNY venue in this particular case.  The bank involved was Wegelin.  Wegelin was investigated, charged and convicted in SDNY.  Moreover, some of the Wegelin related parties -- Beda Singenberger and Hans Thomann -- were investigated and charged in SDNY.

Credit Suisse Criminal Venue in EDVA; More on Venue in Tax Cases (5/23/14)

There is a good article in NYT's DealBook on how the Credit Suisse criminal investigation and prosecution ended up in the United States District Court for the Eastern District of Virginia ("EDVA"). Ben Protess, From Virginia, Chasing Down Credit Suisse (NYT DealBook 5/23/14), here.

This is a good write up on how the USA EDVA snared the Credit Suisse investigtion and brought it across the goal line.  Why EDVA?  That is a good question.  The article offers insight into the answer to the question.

Federal prosecutors have a lot of power over where to locate prosecutions.  The word for placing the prosecution of a federal crime is venue.  Venue has constitutional dimensions.  I offer at the end of this blog, a cut and paste of some portions of my Federal Tax Crimes book discussing venue.  Suffice it to say for now that, for tax prosecutions alleging a conspiracy (either offense or defraud), the conspiracy will often directly or indirectly touch a lot of federal districts that could thereby serve as sufficient nexus for venue for the prosecution.

The big tax shelter prosecutions of the mid-to-late 2000s were brought in SDNY.  A lot of people with their substantial presence outside SDNY and less than strong connections with SDNY in terms of the crimes alleged were herded into the prosecution in SDNY simply because some conduct of the alleged conspiracies occurred in SDNY.

Readers will recall that much of the visible criminal prosecution activity regarding Swiss banks and Swiss bank enablers has been in SDNY.  The Wegelin actions were in SDNY.  And, I understand that USAO SDNY is conducting some other Swiss bank criminal investigations.

So, it appears at this time, for the Swiss banks, SDNY and EDVA are the centers of activity.

Here is the cut and paste (footnotes omitted):

Coplan #3 - Venue for False Statements (18 USC 1001) (12/3/12)

This is the third in the series on the major and lengthy opinion in United States v. Coplan, et al., 703 F.3d 46 (2d Cir. 11/29/12), here and here (bookmarked version).  Venue is the topic of this blog.

One of the defendants, Vaughan, challenged venue for the false statement count (18 USC 1001, here) in the Southern District of New York, DOJ's preferred venue for the mega tax shelter trials) rather than in Tennessee where he made the statement.  The key facts are that the statement was made in Tennessee but worked its way to SDNY where the agents considered the statement in the investigation being conducted in SDNY.  Essentially, the Court held that the false statement crime can be committee wherever the statement is properly considered, so that venue can be in the district where the statement is made and the district where the statement is considered.

I thought I would just cut and paste the major portion the discussion of venue for those not familiar with some of the venue concepts (some case citations omitted and some footnotes omitted):

Because "[p]roper venue in criminal proceedings was a matter of concern to the Nation's founders," the United States Constitution "twice safeguards the defendant's venue right." United States v. Cabrales, 524 U.S. 1, 6 (1998). Article III requires that "the Trial of all Crimes . . . shall be held in the State where the said Crimes shall have been committed." U.S. Const. art. III, § 2, cl. 3. The Sixth Amendment further provides that "[i]n all criminal prosecutions, the accused shall enjoy the right to a speedy and public trial, by an impartial jury of the State and district wherein the crime shall have been committed." Id. amend VI; fn31 see also Fed. R. Crim. P. 18 (requiring that "the government must prosecute an offense in a district where the offense was committed"). 

  fn31 "Technically, Article III specifies 'venue' and the Sixth Amendment specifies 'vicinage,' but that refined distinction is no longer of practical importance." United States v. Royer, 549 F.3d 886, 893 n.8 (2d Cir. 2008).

Is FBAR Venue Criminal Venue for the Convenience of the Government or in No District for the Convenience of the Filer? (7/23/11)

In United States v. Bradley, ___ F.3d ___, 2011 U.S. App. LEXIS 13260 (11th Cir. 13260), a decision of considerable length (195 pages), the Court addressed inter alia, venue in a case involving an FBAR violation. In a nutshell, the FBAR form permits filing at the Detroit Service Center or any IRS office. There is no special venue provision for FBAR charges, so the general rule applies which makes venue in any district where the crime was committed. Since the filer could file in any district, does that make his or her failure to file a crime that occurred in any district, giving the Government choice of any venue? Without deciding whether that sweeping opportunity for venue choice was available to the Government at its whim, the Court sustained venue for the FBAR charges based on the district court's inquiry into the convenience of that district for trial of the charges, even though the defendant resided elsewhere. 

I have linked the opinion above, but because of its length, I am just cutting and pasting it below for readers' easier access (pp. 56-60 of the pdf slip opinion):

Count 284 alleged that Bradley III failed to disclose an interest in a foreign financial account while committing mail fraud, wire fraud, and money laundering, in violation of 31 U.S.C. §§ 5314 and 5322(b). Section 5314 authorizes the Secretary of the Treasury to require a taxpayer to keep records and file reports "when th[at] resident, citizen, or person makes a transaction or maintains a relation for any person with a foreign financial institution." 31 U.S.C. § 5314(a). The Secretary has exercised that authority by requiring all persons subject to the jurisdiction of the United States to disclose whether he or she has "an interest in, or a signature or other authority over, a bank, securities or other financial account in a foreign country." 31 C.F.R. § 103.24(a). If a person owns such an account, he is obligated by 31 C.F.R. § 103.24 to file Form 90-22.1 with "the Commission of the Internal Revenue." That form instructs the person that the filing may be accomplished "by mailing this report to the Department of the Treasury . . . or by hand-carrying it to any local office of the Internal Revenue Service for forwarding to the Department of the Treasury" in Detroit, Michigan.

Snipes Petition for Certiorari Raises Venue Issues

Wesley Snipes filed a petition for certiorari on 2/28/11. The petition is here.  You will recall that he was convicted of three counts of failure to file. See blog on affirmance, "Wesley Snipes Conviction and Sentence Affirmed ." The questions raised in the petition are:

QUESTIONS PRESENTED

1. Is an accused person deprived of the right under Article III and the Sixth Amendment to be tried only by a jury of the community where venue is proper, when factual questions determinative of whether venue has been correctly laid are determined solely by a jury selected in the place challenged by the defendant as incorrect?

2. Where venue is a contested factual issue in a criminal trial, does the government bear a burden of proof beyond a reasonable doubt or only by a preponderance of the evidence?

Wesley Snipes Conviction and Sentence Affirmed (7/17/10)

As the world (including likely readers of this blog) know, Wesley Snipes was convicted of 3 counts (years) of failure to file (while being acquitted of more serious offenses). The district court gave him a sentence of 3 years, which is the maximum because the counts of conviction were misdemeanors having a maximum one year sentence and, by stacking them (serving consecutively), he could be sentenced to a maximum sentence of 3 years. Mr. Snipes did not appreciate that. He appealed. The Eleventh Circuit has affirmed here.

The whole case is worthy of reading. I make only a few points of matters that struck me on a quick read.

1. The Court has a good analysis of the importance of venue and why it is an essential element that the Government must prove at trial. One interesting point is that, although it is an essential element of the proof, it is not an element of the crime. Hence, the Government must prove venue only by a preponderance of the evidence.

2. Although all practicing in this area already knew this, use of offshore accounts (the current hot topic) can result in a sentencing enhancement under the Sentencing Guidelines for sophisticated means. (Unless to do so would "double count," although double counting is not addressed in the case.)

3. The Court rejected Snipes' claim that Section 2T1.1 of the Guidelines is invalid because it did not treat a misdemeanor crime (failure to file, of which Snipes was convicted) as a less serious offense than a felony. Those practicing in this know that the key to calculating the Base Offense Level for misdemeanors is the same table that is used for felonies. The benefit of misdemeanor convictions is that the maximum incarceration period will be capped substantially less than felony convictions. Thus, in Snipes' case, his failure to file misdemeanor convictions capped his sentence at 3 years, but had he been convicted of 3 felonies which in the tax arena, have 3 year and 5 year sentences per count of conviction, his maximum sentence (which he would have drawn for reasons noted below) would have been 9 years and 15 years, respectively. But, where the final Offense Level, driven principally by the tax loss, indicates a sentencing range equal to or less than the maximum on the misdemeanor counts of conviction, there is no difference in sentencing if the counts of conviction had been for felonies rather than misdemeanors. This seems odd to me, for in defining the crime and the maximum sentence, Congress seems to have said that a tax misdemeanor is only 1/3 or 1/5 as bad as a tax felony, and yet convictions for tax misdemeanors can in the circumstances noted draw the same sentence as convictions for tax felonies. Again, this is under the Guidelines, and because the Guidelines are no longer mandatory, a sentencing court can take that difference into consideration if it chooses to do so.

4. The sentencing court here did not take that difference into account, apparently. The sentencing court noted that "The district court noted that misdemeanants who, like Snipes, had willfully failed to file their personal income tax returns had engaged in similar behavior to the felons who had received similar sentences." Moreover, it relied upon the exemplary effect of a stiff sentence for Snipes. The court of appeals said:

The district court gave ample consideration to each of the relevant considerations found in 3553(a). Although the discussion about general deterrence was somewhat longer than the discussion of the other factors, its length corresponds with the emphasis the Sentencing Guidelines placed on deterrence in the criminal tax context. The introductory commentary to the Tax section of the Sentencing Guidelines explains that

[b]ecause of the limited number of criminal tax prosecutions relative to the estimated incidence of such violations, deterring others from violating the tax laws is a primary consideration underlying these guidelines. Recognition that the sentence for a criminal tax case will be commensurate with the gravity of the offense should act as a deterrent to would-be violators.

U.S.S.G. Ch. 2 Pt. T, intro. Comment (emphasis added).

5. So, what was the indicated Guidelines sentence? I haven't calculated it exactly, because the intended tax loss as calculated by the PSI was over $40,000,000 which with enhancements for sophisticated means and obstruction of justice would easily produce a Guidelines range well exceeding the maximum 3 year sentence for 3 misdemeanor counts. Hence, the Judge, with the considerations noted, handily imposed the maximum sentence, and the Court of Appeals sustained it without much ado.

Notable Decision in SDNY Criminal Tax Shelter Case (1/14/10)

I have previously blogged that John B. Ohle was an unindictead alleged co-conspirator in the Daugerdas et al. indictment.  See here.  Ohle was indicted apart from that indictment.  He was indicted along with a guy named Bradley.  That indictment generated a significant decision from Judge Leonard Sand in United States v. Ohle, 2010 U.S. Dist. LEXIS 2150 (SDNY No. S2 08 Cr. 1109 (LBS)).  The following are the points that attracted my particular attention:

1. The Court rejected a challenge to the wire fraud count (Count One). Ohle argued that "Count One of the indictment impermissibly uses the wire fraud statute to reach an alleged criminal tax conspiracy, citing United States v. Henderson, 386 F. Supp. 1048 (S.D.N.Y. 1974)." The Court essentially took the life out of Henderson. Prosecutors have their choice of how to charge tax conspiracies. Why does it matter if a conspiracy is a conspiracy and there is a single punishment scheme in 18 U.S.C. § 371? Ah, but there are other potential consequences of wire and mail fraud -- forfeiture and even ramping up to money laundering or RICO -- which are not available for tax crimes and tax conspiracy (either offense or Klein defraud conspiracy). See fn. __ on page __. For the DOJ Tax Division policy for prosecutors to make the choice, see Directive No. 128 here (noting that virtually all tax crimes can be charged as mail or wire fraud, and attempting to provide guidance and preclearance directives so the mine-run tax cases are not willy-nilly charged as mail or wire fraud). Thus, these charging decisions are not tweedle dum / tweedle dee from the defendant's perspective.

2. The Court rejected a challenge to another conspiracy (Count Five) as duplicitous. The indictment contained a "boilerplate" allegation that appeared to allege a single conspiracy. The overt acts, however, seemed to suggest multiple conspiracies. Yet, because the apparent multiple conspiracies were related and involved players not acting in a vacuum, with compensation flowing around, the Court concluded that the allegation is of a single conspiracy and not multiple conspiracies so as to implicate duplicity concerns. In the process of getting to that holding, the Court had a nice discussion of the concerns that are implicated by duplicity in counts (case names and quotation marks omitted to easier see the logical flow):

An indictment is duplicitous if it joins two or more distinct crimes in a single count. Duplicitous pleading is not presumptively invalid; rather, it is impermissible only if it prejudices the defendant. Duplicity is only properly invoked when a challenged indictment affects one of the doctrine's underlying policy concerns: (1) avoiding the uncertainty of a general guilty verdict, which may conceal a finding of guilty as to one crime and not guilty as to other, (2) avoiding the risk that jurors may not have been unanimous as to any one of the crimes charged, (3) assuring the defendant has adequate notice of charged crimes, (4) providing the basis for appropriate sentencing, and (5) providing the adequate protection against double jeopardy in subsequent prosecution.

The Court of Appeals for the Second Circuit has recognized that application of the duplicity doctrine to conspiracy indictments presents "unique issues." In this Circuit, it is well established that [t]he allegation in a single count of a conspiracy to commit several crimes is not duplicitous, for the conspiracy is the crime and that is one, however diverse its objects. A single conspiracy may be found where there is mutual dependence among the participants, a common aim or purpose or a permissible inference from the nature and scope of the operation, that each actor was aware of his part in a larger organization where others performed similar roles equally important to the success of the venture. Each member of the conspiracy is not required to have conspired directly with every other member of the conspiracy; a member need only have participated in the alleged enterprise with a consciousness of its general nature and extent. If the Indictment on its face sufficiently alleges a single conspiracy, the question of whether a single conspiracy or multiple conspiracies exists is a question of fact for the jury. Accordingly, courts in this Circuit have repeatedly denied motions to dismiss a count as duplicitous.