Monday, August 5, 2013
Ninth Circuit Court of Appeals Upholds Convictions of Woman Who Was Preparer of Sham Tax Returns
By a MetNews Staff Writer
The Ninth U.S. Circuit Court of Appeals on Friday upheld the conviction of a tax-preparer who filed fraudulent tax returns claiming almost $600,000 in refunds that weren’t due.
The conviction of Willena Stargell on July 7, 2010, in the courtroom of U.S. District Senior Judge Terry J. Hatter of the Central District of California, was one of a spate of convictions following an Internal Revenue Service crackdown on tax preparers who were assisting people in cheating the government. The IRS acted after it ascertained that tax fraud in 2006 had resulted in a $385 billion loss of tax revenues.
Hatter sentenced Stargell, who operated the Liberty Bell Tax Service in Riverside County’s Moreno Valley, to 3˝ years in prison. A jury had found her guilty of fraud by wire affecting a financial institution, aiding and assisting in the preparation of false returns, and aggravated identity theft.
The judge imposed a $1,200 special assessment and ordered restitution in the amount of $362,796.07. This included $254,864.74 to the IRS and a total of $107,931.33 to two banks.
Refund Anticipation Loans
Part of Stargell’s scheme was to obtain from banks “refund anticipation loans” (RALs) for her customers, based on the phony returns she prepared.
On appeal, Stargell argued that four of the counts required that a “financial institution” be “affected” and the prosecution failed to make such a showing.
That and other contentions were rejected by the Ninth Circuit in an opinion by Chief U.S. District Judge Ralph R. Beistline of the District of Alaska, sitting by designation.
In connection with two of the counts, Beistline said, the banks issued RALs and the IRS blocked the refund, a loss was suffered.
With respect to two other counts, the banks suffered no financial loss, but were nonetheless “affected.” He explained:
“Here, there was sufficient evidence for a rational jury to conclude that Stargell’s fraudulent returns exposed the banks to an increased risk of loss. The senior risk analyst for one of the banks testified that 79.9% of the RALs issued in connection with Stargell’s fraud scheme resulted in a loss to the bank, compared with a general loss rate of less than 1% for non-fraudulent RALs. Therefore, there was sufficient evidence for a rational jury to conclude that Stargell’s fraud scheme affected the banks within the meaning of 18 U.S.C. §1343, regardless of whether the banks ultimately suffered any actual loss.”
Former Lawyer’s Testimony
Stargell also complained that her Sixth Amendment right to counsel was breached and the attorney-client privilege infringed when her former lawyer was called to testify as to some calculations. Beistline responded that it was Stargell’s new lawyer who called the witness, and said that no lawyer-client confidences were divulged.
Arguments were also put forth as to miscalculations by Hatter in connection with the amounts of losses and the restitution. Beistline said the test on appeal was whether there was “clear error,” and found there was not.
Arguing for Stargell was Marisa L.D. Conroy of Encinitas. Assistant United States Attorney Ryan White of the Central District of California represented the government.
The case is U.S. v. Stargell, 11–50392.
Copyright 2013, Metropolitan News Company