Monday, February 3rd, 2014

Tax Fraud Conviction and Sentence Not Barred on Statute of Limitation Grounds

UNITED STATES V. OSUALA, NO. 12-3573 (2D CIR. FEB. 3, 2014) (CABRANES, LIVINGSTON, AND CARNEY) (SUMMARY ORDER), AVAILABLE HERE

This defendant appealed from convictions for obstructing administration of the IRS, subscribing to false and fraudulent income tax returns, and aiding and assisting the preparation of false individual tax returns.  He claimed expiration of the six-year statute of limitations precluded Indictment and that the district court imposed an unreasonable sentence after considering tax returns that were not a basis for conviction.  Both arguments failed.

First, the defendant failed to raise any statue of limitations claim before the district court.  Thus, he waived the argument on appeal.  Nevertheless, the claim failed on the merits according to the Court.  The limitation period runs from the filing deadline for the relevant tax returns rather than the date on which the return was actually submitted.  As to the obstruction allegations, such a charge is within the limitations period of any act integral to the scheme occurred within that period.  None of the returns ran afoul of the limitations period and an act occurred within the limitations period.

Second, application note 2 at U.S.S.G. ยง 2T1.1(c)(1) states in short that all conduct violating tax laws should be considered as part of a defendant’s conduct, scheme or plan unless the evidence demonstrates that the conduct is unrelated.  As a result, the district court properly considered uncharged conduct and conduct that fell outside the statute of limitations.

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