U.S. v. Kassouf, 1:95CR0199.
| Decision Date | 02 April 1997 |
| Docket Number | No. 1:95CR0199.,1:95CR0199. |
| Citation | 959 F.Supp. 450 |
| Parties | UNITED STATES of America, Plaintiff v. James K. KASSOUF, Defendant. |
| Court | U.S. District Court — Northern District of Ohio |
John M. Siegel, Office of U.S. Attorney, Cleveland, OH, for Plaintiff.
Robert J. Rotatori, Sr., Gold, Rotatori, Schwartz & Gibbons, Cleveland, OH, J. Timothy Bender, Roetzel & Andress, Cleveland, OH, for Defendant.
ORDER DENYING DEFENDANT'S MOTION TO DISMISS COUNTS 1-8 OF THE INDICTMENT AS BARRED BY THE STATUTE OF LIMITATIONS
This case is before the Court on the defendant's motion to dismiss counts 1 through 8 of the indictment as barred by the statute of limitations. For the reasons which follow, the Court denies defendant's motion.
A 26 count indictment was filed against defendant James J. Kassouf on May 8, 1995. Counts 1 through 4 of the indictment charge that Kassouf willfully attempted to evade and defeat income taxes due for calendar years 1987 through 1990 by preparing and filing false individual income tax returns, in violation of 26 U.S.C. § 7201. The government's bill of particulars indicates that overstated net operating losses in 1984, 1985, 1986, and 1989, which were carried over to the 1987 through 1990 returns "are items affecting the computation of Kassouf's correct and unreported income alleged with respect to the attempted tax evasion charges (counts 1 through 4)."
Counts 5 through 8 of the indictment allege that Kassouf made and subscribed individual income tax returns for calendar years 1987 through 1990 which were knowingly false because, among other things, Kassouf claimed a deduction for a carry-over of a net operating loss which was inflated because of falsely overstated losses claimed on tax returns in prior years.
Kassouf asserts counts 1 through 8 should be dismissed to the extent they are based on operating losses carried over from 1984, 1985 and 1986 because these charges are barred by the statute of limitations. The government concedes the statute of limitations has expired with respect to the 1984 to 1986 returns, but asserts new criminal conduct occurred when the defendant claimed a carry-over loss on subsequent returns knowing that the carryover was based on false losses claimed on prior returns.
The parties agree that a six year statute of limitations applies to counts 1 through 8, pursuant to 26 U.S.C. § 6531(2) and (5). The parties also seemingly agree that the statute of limitations has not expired with respect to any allegedly false statements in the 1987 through 1990 returns1 The only issue is whether criminal charges based on carryover deductions are governed by the statute of limitations for the year in which the deduction initially was created, or whether a new offense occurs (and the statute of limitations begins anew) each time the deduction is carried over.
This question appears to be a matter of first impression in this Circuit. The parties have cited little direct authority from other circuits, and the Court has found no additional authority.
Defendant relies primarily on the district court's decision in United States v. Mauser, 723 F.Supp. 995 (S.D.N.Y.1989). In Mauser, the government charged that the defendant made false statements on his 1982 and 1983 individual and partnership income tax returns by overstating the market value of property donated to charity. The Court determined the charges were filed within the statute of limitations with respect to the 1982 and 1983 returns. However, the Court found that the 1982 and 1983 returns did not misstate the market value of property as charged in the indictment, but only included a carry-over deduction for charitable donations made in a prior year. Therefore, as a matter of fact, the evidence did not support the charges.
The...
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