The opinion of the court was delivered by: BASSLER
I. SENTENCE UNDER THE GUIDELINES.
Defendant Richard Rabin ("Defendant") has pled guilty to conspiracy to evade personal income tax in violation of 18 U.S.C. § 371 and 26 U.S.C. § 7201.
The Presentence Report ("PSR") calculated the amount of tax loss to be $ 118,580, resulting in a base offense level of 14.
The PSR also reflected a two-point increase to the offense level because Defendant's conduct was intended to encourage persons other than or in addition to co-conspirators to violate the internal revenue laws or impede, impair, obstruct, or defeat the ascertainment, computation, assessment, or collection of revenue. U.S.S.G. § 2T1.9(b)(2).
The total base offense level of 16 was then reduced to 13 because the PSR accorded Defendant a three-point reduction for acceptance of responsibility. U.S.S.G. § 3E1.1(a) and U.S.S.G. § 3E1.1(b). A total offense level of 13 with a criminal history category of I results in a guideline range of 12-18 months.
The Government seeks an upward departure on the ground that Defendant's actions resulted in a significant disruption of a governmental function. U.S.S.G. § 5K2.7. The Government bases its request on Defendant's introduction of false statements and false testimony by a co-conspirator in his divorce proceeding, and argues that the conduct is analogous to obstruction of justice, warranting a two-point increase. U.S.S.G. § 3C1.l.
Defendant objected to the PSR on three grounds. First, he argued that the calculation of the tax loss was inaccurate in several respects. Second, he objected to the PSR's two-level enhancement, pursuant to U.S.S.G. § 2T1.9(b) (2), for encouraging others to violate the internal revenue laws. Finally, he objected to the Government's request, under U.S.S.G. § 5K2.7, for a two-level upward departure for significant disruption of a governmental function.
Defendant does not challenge the basic facts of the conspiracy as set out in the PSR. Defendant was a Coca-Cola route driver and union official with the International Brotherhood of Teamsters, Local 125, in Little Falls, New Jersey. In 1981, Coca-Cola offered drivers the opportunity to purchase their routes and operate them as distributorships. Defendant did not purchase his route since it would have created a potential conflict with his role as a union official. Laurice was a supervisor with Coca-Cola. Although Laurice was interested in a Coca-Cola route, as a member of Coca-Cola management, he was ineligible to purchase a distributorship route.
Laurice and Defendant entered into an agreement in 1981 that purported to transfer to Laurice Defendant's right to purchase his route from Coca-Cola. The terms of the agreement required Laurice to pay Coca-Cola $ 60,000 and the Defendant $ 100 per week for 20 years.
In fact, this agreement did not spell out the true terms of the payments. Under the actual terms, instead of a $ 100 flat rate, Defendant received 20 cents per case per week from Laurice. Laurice paid Defendant's "official" $ 100 per week by check, but he paid the remaining amount in cash. Laurice kept the difference between the commission he received per case and the 20 cent per case payment to Defendant.
In 1989, Defendant and Laurice drew up a contract that memorialized the true agreement between the parties. Defendant never reported the cash payments on his income tax returns and never paid taxes on the amount. This tax evasion continued until 1995.
Defendant was initially questioned as part of an investigation into Local 125 activities, but denied underreporting his income. Laurice, however, was granted immunity and revealed the true ...