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United States v. Nguyen

United States District Court, D. Kansas

November 7, 2014

UNITED STATES OF AMERICA, Plaintiff,
v.
DINH NGUYEN, Defendant.

MEMORANDUM AND ORDER ON OBJECTIONS

MONTI L. BELOT, District Judge.

I. Introduction

Defendant has entered a guilty plea to count 2 of an indictment charging tax evasion in violation of 26 U.S.C. § 7201. The factual basis for his plea, as set forth in the plea agreement, is as follows:

The defendant, Dinh Nguyen, owed substantial income tax in addition to the tax liability he reported on his 2006 U.S. Individual Income Tax Return, Form 1040. In June 2007, when the defendant signed, a U.S. Individual Income Tax Return, Form 1040, which was filed with the Internal Revenue Service on June 21, 2007, he knew that the tax return was false and, thus intended to evade or escape payment of a substantial amount of income tax due and owing in excess of the amount of $0.00 which Mr. Nguyen stated was income tax due and owing for the calendar year 2006.
The parties understand that the court will determine the amount of this substantial tax loss/tax owed at sentencing for purposes of guideline calculations under the advisory sentencing guidelines.

(Doc. 24).

A presentence report was prepared. (Doc. 27). Paragraphs 13-23 of the PSR summarize the offense conduct, which includes a description of how defendant and his business partner, Mark Shipley, operated their scooter businesses. The tax loss calculations contained in the PSR were determined by IRS Agent Aaron Hamor. Defendant objected to almost the entire offense conduct section with the exception of ¶¶ 20 and 22. He objected to all paragraphs pertaining to calculation of tax loss and offense level calculation, ¶¶ 23-25, 29-36, 40-49 (except acceptance credit) and criminal history, ¶ 53. In other words, defendant objected to virtually every paragraph of the PSR which has a negative impact on his guideline sentence. (Doc. 27 at 22-23).

The court held an evidentiary hearing on August 5, 2014. The government's expert, Aaron Hamor, testified as to his opinion of the tax loss. Defendant put forth his version of the offense conduct, as well as the support for almost all of his objections, entirely through the written report and testimony of his expert witness, a former IRS agent named R. Dale McDaniel.

In addition to the testimony and evidence introduced at the hearing, both parties have filed sentencing memoranda. (Docs. 30, 31, 39, 40, 41). The court is now prepared to determine the amount of loss as a result of defendant's tax evasion. The court will rule on the objections which impact the guideline sentence. Objections not specifically ruled on may be considered as having no impact on the sentence.

II. Analysis

Under the Guidelines, the court must determine defendant's base offense level by calculating the tax loss and comparing it to the tax loss table in U.S.S.G. § 2T4.1. See U.S.S.G. § 2T1.1(a)(1); United States v. Thompson , 518 F.3d 832, 867 (10th Cir. 2008). "For an offense involving tax evasion, the tax loss is the total amount of loss that was the object of the offense (i.e., the loss that would have resulted had the offense been successfully completed)." Thompson , 518 F.3d at 867.

In this case, both Hamor and McDaniel utilized the bank records method to determine the amount of loss. However, their amounts are drastically different. Hamor concluded that defendant's conduct resulted in a tax loss of $459, 284 for the years 2005 and 2006. McDaniel concluded that the loss during those same years was $88, 831. Because defendant's objections to the PSR and Hamor's calculations rely on McDaniel's testimony and report, the court will first turn to McDaniel's testimony and opinions.

A. The Basis for McDaniel's Opinions and the Corresponding Objections

McDaniel, who testified that he felt "a little bit sorry" for defendant and was "concerned about his future..." (Doc. 38 at 81), interviewed defendant at length as well as defendant's former business partner, Mark Shipley. McDaniel and an unidentified "associate" he described as a "retired FBI agent" obtained a written statement from Shipley which was alluded to on page 10 of McDaniel's written report (but not attached as an exhibit) but which was produced by defendant at the August 5, 2014 hearing (Exhibit 4). McDaniel and his "associate" did not obtain a written statement from defendant, an interesting and, in my view, significant and unexplained contrast, particularly in view of McDaniel's testimony that he handled defendant's interview "... a lot like I would have handled a meeting with the subject of an investigation back in my old days when I was an agent." (Doc. 38 at 86). In his post-sentencing memorandum, defendant makes the rather extraordinary statement that: "... to the extent credibility is based on information gained from Mr. Nguyen, it would appear to impact on weight of evidence but would not go to Mr. McDaniel's credibility." (Doc. 39 at 4). I strongly disagree. Defendant may have a right to refuse to speak with IRS agents, the probation officer and me about his version of the offense. But when he elects to use a former IRS agent to tell ...


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