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State v. Cobbs

Superior Court of New Jersey, Appellate Division

June 23, 2017

STATE OF NEW JERSEY, Plaintiff-Respondent,
v.
GREGORY P. COBBS, Defendant-Appellant.

          Submitted November 29, 2016

         On appeal from the Superior Court of New Jersey, Law Division, Mercer County, Indictment No. 13-07-0893.

          Joseph E. Krakora, Public Defender, attorney for appellant (Jaime B. Herrera, Assistant Deputy Public Defender, of counsel and on the brief).

          Angelo J. Onofri, Acting Mercer County Prosecutor, attorney for respondent (Mary E. Stevens, Special Deputy Attorney General/ Acting Assistant Prosecutor, of counsel and on the brief).

          Before Judges Fisher, Ostrer and Leone.

          OPINION

          OSTRER, J.A.D.

         This appeal requires us to determine when the five-year statute of limitations begins to run against a prosecution for intentional failure to pay New Jersey taxes. N.J.S.A. 54:52- 9(a). Upon reconsideration, the trial court denied defendant's motion to dismiss count one of the July 10, 2013 indictment, which charged him with failure to pay $194, 817.56 in gross income tax for tax year 2007. Thereafter, defendant entered a conditional guilty plea to that charge, and the State dismissed count two of the indictment, which timely alleged failure to pay $18, 336 in 2008 tax. Defendant did so after the court affirmed denial of his application to pretrial intervention (PTI).

         Having considered the plain language of the tax law, and applicable principles of statutory interpretation, we conclude that the limitations period under N.J.S.A. 2C:1-6 for failure to pay tax under N.J.S.A. 54:52-9(a) begins to run when the defendant has failed to pay taxes when due and owing, and has done so with the intent to evade, avoid or otherwise fail to make timely payment. This can occur on the day taxes are first due, or on a later date when the necessary state of mind first emerges.

         In this case, the indictment alleged that both non-payment and intent coexisted as early as July 8, 2008. Therefore, count one of the July 10, 2013 indictment was time-barred. We reject the State's argument that the limitations period was tolled until February 2010, when defendant engaged in his last affirmative act to evade and avoid payment.

          We also affirm the court's denial of defendant's PTI appeal. We therefore reverse defendant's conviction and remand for further proceedings with respect to count two of the indictment.

         I.

         For purposes of this appeal, we assume the facts alleged in the indictment. State v. Morrison, 188 N.J. 2, 12-13 (2006) (on motion to dismiss indictment, court must consider evidence presented to the grand jury in light most favorable to the State); State v. Riley, 412 N.J.Super. 162, 167 (Law Div. 2009) (on motion to dismiss indictment, court accepts facts alleged by State). According to count one, "on diverse dates between July 8, 2008 and February 27, 2013, " defendant "fail[ed] to pay or turn over when due" $194, 817.56 in tax due for tax year 2007, and he did so "with the intent to evade, avoid or otherwise not make timely payment or deposit . . . ." Count two alleges that between October 15, 2008 and February 27, 2013, defendant failed to pay when due $18, 336 in tax for the 2008 tax year, while having the same state of mind. Neither count charged defendant with failing to pay a specific amount of interest, fees or penalties.

         The State also alleged, and defendant did not dispute for purposes of his motion, that defendant filed his gross income tax return on July 7, 2008. It was due April 15, 2008 and he did not seek an extension. Defendant reported over $2.3 million in taxable income, but failed to remit any tax then due, which he calculated to be $196, 065. Defendant was thereafter given a modest credit, producing the $194, 817.56 amount stated in the indictment.

         On February 17, 2009, an outside tax collector for the Division of Taxation (Division), Pioneer Credit Recovery, Inc. (Pioneer), notified defendant by mail of his tax delinquency and sought payment of $274, 453.82, consisting of $194, 065 in tax; interest of $16, 012.28 through March 15, 2009; penalties of $38, 915.20; and a recovery fee of $24, 950.34.[1] Pioneer personnel communicated with defendant by telephone multiple times between March 2009 and February 2010. Defendant repeatedly promised Pioneer and Division personnel that he would make payments, but he did not. On February 9, 2010, defendant contacted the Division and said the proverbial "check was in the mail" - actually in a Federal Express package. He supplied the tracking number, but no payment was enclosed. The case was transferred to the Attorney General in April 2010. Aside from his continuing non-payment, the State proffered no acts of evasion thereafter, although the indictment referred to actions on "diverse dates" as late as February 2013.

         Over three years later, a Mercer County grand jury returned the two-count indictment against defendant.[2] Defendant was denied admission to PTI, and the trial court rejected defendant's appeal. After the plea cut-off date, see R. 3:9-3(g), defendant filed his motion to dismiss count one as time-barred.

         The court initially granted the motion, but reversed itself upon the State's reconsideration motion. Defendant contended the five-year limitations period under N.J.S.A. 2C:1-6(b)(1) began to run on April 16, 2008, the day after his taxes were due. The State argued the crime was complete, and the statute of limitations commenced, after defendant satisfied two elements: he failed to pay the tax when due; and he engaged in his last affirmative act to evade or avoid payment, which was in February 2010, when defendant falsely stated he sent a check by Federal Express.[3]

         In ultimately denying defendant's dismissal motion, the court held that the Legislature intended to designate criminal failure to pay tax under N.J.S.A. 54:52-9(a) as a continuing crime, although it did not do so explicitly. The court agreed the limitations period began to run after a defendant's last act that evidenced an intent to evade or avoid payment of tax. As that occurred in February 2010, the July 10, 2013 indictment was timely.

         Defendant thereafter entered an open, conditional plea of guilty to count one. In his allocution, defendant admitted he filed his 2007 tax return on July 8, 2008; it reflected $194, 817.56 in tax due; he intended to avoid payment; and he thereafter made multiple unkept promises to pay, and sent an empty Federal Express envelope after promising to enclose a payment. On April 17, 2015, the court sentenced defendant, then fifty-one years old, to five years of probation and 100 hours of community service. The court required restitution of $150, 000, in monthly payments of a least $500 over ten years.[4]

         This appeal followed. Defendant raises the following points for our consideration:

         POINT I

THE STATUTE OF LIMITATIONS BEGAN TO RUN ON JULY 7, 2008 BECAUSE FAILURE TO PAY IS A POINT-IN-TIME CRIME AND NOT A CONTINUING OFFENSE .[5]

         POIN ...


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