Got OID?

April 12, 2017: WEvGOV.com

THE US GOV'T HAS LOST ITS PATIENCE with the anti-tax movement:

The anti-tax movement can't seem to invent enough ways to get somebody sent to prison. In a manner I see as a way to drive home a message to somebody who's refused to listen to countless warnings in the past, the US government has brought charges in grand fashion against victims of the fraud that is (generally) the anti-tax movement.

Anyone so unfortunate as to be one who's submitted to the IRS or a financial institution any of the contrived securities emanating from the loose collective known as "the anti-tax movement" should take heed and act upon the articles below, pasted directly from the Dept. of Justice's own web site. Of specific concern is the charge of "fictitious obligation" (18 USC § 514, Class B felony) which carries a statutory maximum sentence of twenty-five years per count. One such count for each of only three "1099-OIDs" in your indictment means seventy-five years in prison maximum. In plea negotiations to avoid trial such a defendant will be offered the opportunity to plead down to one or two counts while the prosecution recommends sixty months as agreed; count on forty-eight months followed by three years of supervised release (probation). That's devastating, but it's a slap on the wrist in light of the upward latitude or discretion the court has to be more severe.

In 2014, in Alaska, James R. Back, who had filed six "Pete Hendrickson tax returns," was charged with six counts of filing fraudulent tax documents but was sentenced to only sixteen months. I can see an enormous difference between a tax returns with deductions the IRS refuses, such as Mr. Back's tax returns, and the personal securities (OIDs, other) which seek to represent substantial value or debt. Tragically, a lay person or misinformed individual such as too many of those Americans who come to study the work product of the movement cannot perceive this substantial difference when they consider filing multiple securities instead of multiple 'tax returns' or forms, a multiple of 5 in terms of years in prison. False tax form - 5 yrs. per count under 26 USC § 7206, fictitious obligation - 25 yrs. per count under 18 USC § 514; an enormous difference.

Beyond the severity of the fictitious obligation charge, however, the gov't employs another tactic that's very much hidden from view but which is vitally important to a finding of guilt. My bet would be that the filers of those returns and the issuers of those personal securities, right or wrong, have or had a belief that they were acting within the law when doing so, which makes them factually innocent. But if you ask anyone who's experienced the criminal justice system as a tax defendant they'll tell you that precious little (if any) time was ever spent exploring the mens rea (criminal intent) defense.

The first article below, about a Hermosa Beach couple, indicates that multiple tax returns were mailed to multiple IRS offices, which tells me that those defendants sought to double or triple their take by getting multiple IRS offices to issue refunds or payments relative to the same year or years. The defendants in the second article did not do this, and in my conversation with them I was assured that they believed they were behaving lawfully when they filed OIDs for eleven years - cha-ching - 300+ years in charges. Although therefore innocent, no consideration was given to criminal intent when the DOJ convinced the grand jury that the second defendants were likely guilty.

Some of the figures who peddle the movement's wares are bona fide shysters, while others are well intentioned but ignorant. It all arises from the terrible idea that America should have a twenty-two pound Tax Code and regulations, and this is complimented by a judiciary so profoundly corrupt that obviously innocent people go to prison all the time. Keep your name off this page by ignoring the movement.

Enough said,

David R. Myrland

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1.

Department of Justice
U.S. Attorney’s Office
Central District of California
FOR IMMEDIATE RELEASE
Monday, February 1, 2016

Hermosa Beach Couple Arrested on Federal Charges Related to Tax Scam and Passing False ‘Checks’ and ‘Bonds’ to Pay Off Debts

1. LOS ANGELES – Two Hermosa Beach residents were taken into custody yesterday after being indicted by a federal grand jury on a host of charges related to a scheme to defraud the Internal Revenue Service, which included passing bogus checks and bonds as a way to pay off debt for themselves and others.

2. Sean David Morton, 58, and his wife, Melissa Ann Morton, 50, are expected to be arraigned this afternoon in federal court in Los Angeles on a 56-count superseding indictment that was returned by a grand jury on January 27. The couple was arrested by special agents with IRS - Criminal Investigation in San Pedro Sunday morning after disembarking from a “Conspira-Sea Cruise.”

3. According to the superseding indictment, Sean David Morton filed a series of false income tax returns for the years 2005 and 2010 that sought millions of dollars in refunds. Melissa Morton allegedly filed several false tax returns for the year 2007. The couple “caused multiple copies and multiple versions of their income tax returns to be submitted to various IRS service centers throughout the United States in 2009 and 2010,” according to the indictment, which alleges they attached false Forms 1099-OID to support their claims for refunds.

4. The indictment specifically alleges that Sean David Morton filed a false 2006 income tax return 2010 that requested a refund of $2,809,921, and that in 2012 he filed a document that sought a tax refund of $1,560,634 for 2006.

5. In relation to the scheme, the indictment alleges that Sean David Morton on multiple occasions submitted to the IRS documents he called “Coupon for Setoff, Settlement, and Closure” in the amounts of $5,286,867 and $8,429,763. “These fictitious financial instruments were a purported bond in exchange for the refunds they sought from the IRS,” according to the indictment.

6. “Those who try to defraud the tax system often try to use complicated ‘legal’ filings to hide their true goal – stealing money paid by other taxpayers,” said United States Attorney Eileen M. Decker. “IRS agents and federal prosecutors have the tools to investigate and prosecute these sophisticated schemes, which undermine the entire tax system and ultimately victimize law-abiding taxpayers.”

7. Melissa Morton allegedly presented to the IRS in 2010 a “Coupon for Setoff, Settlement, and Closure” in the amount of $44,450 as a purported bond in exchange for a $14,450 refund that she sought. And, in 2013, both defendants allegedly presented to the IRS two “Non-Negotiable Discharging Bond and Indemnity” in the amounts of $10 million for Sean David Morton and $600,000 for Melissa Morton.

8. In relation to the tax returns and other documents submitted to the IRS, the Mortons are each charged with one count of conspiracy to defraud the United States and two counts of making false claims to the United States.

9. The indictment also charges Sean David Morton and Melissa Morton each with 24 counts of presenting false and fictitious instruments and documents – specifically items called “Non-Negotiable Discharging Bond and Indemnity” – which purported to be actual securities and financial instruments issued under the authority of the United States. These documents were submitted to the IRS, the California Franchise Tax Board, banks, mortgage companies, student loan companies, and county tax collectors, supposedly as a means to pay off debt. Melissa Ann Morton was charged with 25 counts of presenting or passing these documents. The Mortons allegedly also assisted others in presenting these false and fictitious instruments in amounts as high as $1.5 million.

10. “Driven by insatiable greed and a blatant disregard for the tax code, Mr. and Mrs. Morton have a long history of allegedly filing bogus tax returns and fictitious instruments claiming fraudulent refunds,” stated Erick Martinez, Special Agent in Charge of the IRS - Criminal Investigation. “People who create elaborate schemes that have no purpose other than to defraud the IRS run the very high risk of prosecution.”

11. An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty in court.

12. If they are convicted of the charges in the superseding indictment, Sean David Morton would face a statutory maximum sentence of 650 years in federal prison, and Melissa Morton would face a statutory maximum sentence of 625 years.

13. The investigation into the Mortons was conducted by IRS - Criminal Investigation

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2.

"JAKE" substituted for names of defendants.

Department of Justice
U.S. Attorney’s Office
Western District of Washington
FOR IMMEDIATE RELEASE
Thursday, April 6, 2017

Kirkland Tax Defier Indicted for Nearly Two Decade Scheme to Avoid Paying Income Taxes

Set up Shell Companies, Filed Frivolous Claims and Sent Forged Money Orders to Evade Taxes

1. SEATTLE - The owner of a Kirkland, Washington interior design business was indicted today in a nearly twenty-year scheme to avoid paying several hundred thousand dollars in income taxes, announced U.S. Attorney Annette L. Hayes. JAKE, 56, was indicted by the grand jury on thirteen counts of tax evasion, eleven counts of providing fictitious financial obligations, and one count of corrupt interference with the administration of the Internal Revenue Code. A second defendant, Mrs. JAKE, 58, also of Kirkland, was indicted on two counts of providing fictitious financial obligations. Arraignment on the indictments is scheduled for April 20, 2017.

2. According to the indictments, JAKE operates Jake's Design, an interior design firm for medical offices. As detailed in the indictment, as early as 1998 and from 2000 to 2007, JAKE refused to pay his income taxes, which over that time totaled more than $340,000. JAKE set up shell companies to hide his income and assets, filed false bankruptcy claims, and filed false claims against the government. For tax years 2010-2013, JAKE continued to use a variety of strategies to hide his income and avoid any tax assessments. In February 2013, JAKE sent eleven fake money orders to the IRS to make it appear he was paying his tax obligations. The total face value of the eleven fake money orders exceeded a million dollars. His long-time partner, Mrs. JAKE, also submitted two fake money orders as payment for back taxes she owed.

3. Tax evasion is punishable by up to five years in prison and a $250,000 fine. Presentation of fictitious financial instruments is punishable by up to 25 years in prison and a $250,000 fine. Attempts to interfere with the administration of the tax code is punishable by up to three years in prison and a $5,000 fine.

4. The charges contained in the indictment are only allegations. A person is presumed innocent unless and until he or she is proven guilty beyond a reasonable doubt in a court of law.

5. The case is being investigated by the Internal Revenue Service Criminal Investigation (IRS-CI). The case is being prosecuted by Assistant United States Attorney Seungjae Lee.

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