Originally published on Forbes.com.
Anthony Charles Dwight Box was at what I consider the end of the line in tax litigation – appealing his sentence from prison – when he heard from the Eleventh Circuit last month. It was not good news. The Circuit Court approved the 36 month sentence handed down by Judge Federico Moreno of the Southern District of Florida.
Judge Moreno had made an upward adjustment from the 24 to 30-month sentence called for by the guidelines because Mr. Box’s legal education should have made him know better, a conviction in 1989 and failure to make any restitution.
A Crime That Could Have Been Prevented
Although, the discussion of the sentence has some interest, what I really find intriguing is the crime that he pled guilty to. He stole nearly a million dollars from the United States with a phony tax return. It is totally ridiculous that the transparent scheme worked well enough to get a check issued to him. He should have gotten a nasty warning and some sort of frivolity penalty. Instead, his back taxes were wiped and he received a check for over $700,000, much of which was squandered. All this followed with a stay in a federal facility.
Before entering his guilty plea Mr. Box listened to a federal prosecutor describe his crime. A phony W2-G purportedly issued by Seminole Casino Coconut Creek was attached to his 2011 tax return. The W2-G showed gross gambling winnings of $3,775,0000 and federal withholding of $1,057,000 (That does work out to 28%, which apparently is what it is supposed to be.)
Of course with the top federal rate being 35% in 2011 28% withholding on millions of income is going to put you behind not ahead, but that is mostly taken care of with $3,525,266 in phony gambling losses resulting in a refund of $986,618. After offsetting some tax debts Mr. Box received a check for $735,463.69.
According to this story, this sort of thing should not work anymore as the IRS accelerates matching to occur before issuing refunds beginning with 2017 returns. Still that it ever worked for refunds of this magnitude is shocking. It is also tragic as it tempted people who might otherwise been harmless to turn themselves into big-time criminals.
By the time the IRS caught up with him all the money was gone, as Judge Moreno remarked –
Apparently, the fraud was uncovered from another case not the routine matching that should have caught it even before the refund issued.
Age Does Not Give Leniency
There was an interesting comment by Judge Moreno when he heard that the defense attorney would be proposing a downward adjustment based on Mr. Box’s advanced age (57). The attorney offered that there are statistics that show recidivism declines with age. Judge Moreno expressed skepticism about the applicability of the statistics to white-collar crime and threw in an interesting observation about gender.
…people as they get older they supposedly mellow out, the armed, the violent. And I think that’s true. Young men do stupid thing, right? And I say men because it is usually men, not women. But crimes that deal with the mind, by the way, there the women get a little bit or a few more percentage points because they’re smarter than men , and it has nothing to do with violence.
But what does age have to do with anything?
Given all the abuse they get with all those lawyer jokes, you would think they would stick together more, but that is not what happened here. Mr. Box’s legal education was held against him. He should have known better. His sentence six months over the guideline and a year more than what the government asked for was upheld on appeal.
About The Guidelines
When you read news reports of people being indicted you will see references to enormous amounts of time they might spend behind bars if convicted. These figures are arrived at by adding up the statutory maximum sentences in the various counts. Actual sentences rarely, if ever, come to that amount. The United States Sentencing Commission issues guidelines for judges to use. It is a complicated process which you can read about here if you care too. Judges are not bound by the guidelines, but they do have to justify deviations as Judge Moreno did in the case of Mr. Box.
Other Coverage
Yvonne Juris has 3-Year Fraud Sentence OK For Law Degree Holder: 11th Circ. behind the Law360 paywall.