United States v. Abramson

• Decision Date: 20 January 2023
• Docket Number: 18 CR 681
• Parties: UNITED STATES OF AMERICA, v. MICHAEL ABRAMSON.
• Court: U.S. District Court — Northern District of Illinois

UNITED STATES OF AMERICA, v. MICHAEL ABRAMSON.

No. 18 CR 681

United States District Court, N.D. Illinois, Eastern Division

January 20, 2023

MEMORANDUM OPINION AND ORDER

Virginia M. Kendall, Judge.

A federal grand jury returned an indictment against Defendant Michael Abramson charging him with 13 counts of filing false tax returns in violation of 26 U.S.C. § 7206(1). (Dkt 1). Abramson moved to dismiss Counts 3-9 of the Indictment arguing that the applicable returns were never filed as a matter of law. (Dkt. 80). For the following reasons, the Court denies Abramson's Motion. [80]

Background

The government has charged Defendant Michael Abramson with making false statements in both his personal tax returns and in tax returns that he directed to be prepared and submitted for Leasing Employment Services (LES), a business in which he has an ownership interest. (Dkt. 1). Counts 1, 2, 11, and 13 of the Indictment charge Abramson with knowingly making false statements on his personal tax returns for tax years 2011-2014. (Dkt. 1 at 1-6; 15, 17). Counts 10 and 12 charge Abramson with knowingly making false statements on LES's corporate tax returns for tax years 2013 and 2014. (Id. at 14, 16). Counts 3-9 charge Abramson with knowingly making false statements on Forms 1120X for LES for tax years 2006-2012.^[1](Id. at 7-13).

The Indictment alleges that, on or about August 12, 2014 Abramson

did willfully make and subscribe and caused to be made and subscribed, an Amended United States Corporate Income Tax Return 1120X for Leasing Employment Services with schedules and attachments for the calendar year 2006, which return was verified by a written declaration that was made under penalties of perjury, and filed with the Internal Revenue Service, which return defendant did not believe to be true and correct as to every material matter ....

(Id. at 7). Each of Counts 3-9 repeats the same language for the respective calendar years from 2006 through 2012. (Id. at 7-13). Each Count then details a different dollar amount of allegedly improper deductions that Abramson claimed for that year, but otherwise, the operative language is identical. (Id.)

Abramson moves under Federal Rule of Criminal Procedure 12(b)(1) to dismiss Counts 39 of the indictment. (Dkt. 80). He argues that they can be resolved as a matter of law because the 1120X Forms on which those charges are based were never filed. (Id.) The Government opposes the motion. (Dkt. 91).

Legal Standard

“A party may raise by pretrial motion any defense, objection, or request that the court can determine without a trial on the merits.” Fed. R. Crim. P. 12(b)(1). When a 12(b)(1) motion seeks to dismiss an indictment, “its resolution will turn on pure questions of law regarding the sufficiency of the indictment's allegations.” United States v. Dion, 37 F.4th 31, 33-34 (1st Cir. 2022) (citing United States v. Brissette, 919 F.3d 670, 675 (1st Cir. 2019)). To be legally sufficient, an indictment must only “(1) state[ ] the elements of the offense charged; (2) fairly inform[ ] the defendant of the nature of the charge so that he may prepare a defense; and (3) enable[ ] him to plead an acquittal or conviction as a bar against future prosecutions for the same offense.” United States v. Chanu, 40 F.4th 528, 539 (7th Cir. 2022) (quoting United States v. Miller, 883 F.3d 998, 1002 (7th Cir. 2010)); see also Fed. R. Crim. P. 7(c)(1).

When considering a motion to dismiss a criminal indictment, the Court assumes all facts in the indictment are true and “view[s] all facts in the light most favorable to the government.” United States v. Black, 469 F.Supp.2d 513, 518 (N.D. Ill. 2006) (quoting United States v. Yashar, 166 F.3d 873, 880 (7th Cir. 1999)); see also United States v. White, 610 F.3d 956, 958 (7th Cir. 2010) (per curiam) (“An indictment is reviewed on its face, regardless of the strength or weakness of the government's case.”).

Discussion

To prove a criminal offense under § 7206(1) of the Internal Revenue Code,

the government must prove that the defendant (1) filed a return, statement, or other document that was false as to a material matter; (2) signed the return, statement or other document under penalty of perjury; (3) did not believe the return, statement or other document was true as to every material matter; and (4) willfully subscribed to the false return with the specific intent to violate the law.

United States v. Hanson, 2 F.3d 942, 945 (9th Cir. 1993) (citing United States v. Bishop, 412 U.S. 346 350 (1973)); see also I.R.C. § 7206(1). Filing the return is an essential element of the charge. Id.; see also United States v. Pansier, 576 F.3d 726, 736 (7th Cir. 2009) (“Section 7206(1) is a perjury statute, and therefore requires only that the taxpayer file a return which he does not believe to be true and correct as to every material matter.” (internal citations and quotation marks omitted)).

Abramson insists that the returns in question-Forms 1120X for the tax years 2006 through 2012-were never filed as a matter of law, so he cannot be charged under § 7206(1) for any allegedly false statements made therein. (Dkt. 80). He does not deny that he ever sent the IRS these forms, or that the IRS received them. (In any event, such denials would raise a factual defense to be asserted at trial.) Rather, Abramson states that in August 2014 he sent the Forms 1120X along with a letter on behalf of LES “requesting a determination that LES and its subsidiaries be allowed an extension of time to file an election under § 1.1502-75 of the Income Tax Regulations which would allow the affiliated group to file amended consolidated returns for the years 2006-2012.” (Dkt. 80 at 3). He later received a letter dated March 16, 2015, from the IRS's Office of Associate Chief Counsel (Corporate) that, in Abramson's words, indicated the IRS had “expressly rejected the request to file them.” (Id. at 1).

A. Indictment Sufficiently Alleges § 7206(1) Violations

As a threshold matter, Counts 3-9 of the Indictment are legally sufficient. The government has alleged each element of a § 7206(1) violation: that Abramson filed or caused to be filed with the IRS Forms 1120X that he signed under penalty of perjury, knowing they contained material, false statements. See Chanu, 40 F.4th at 539. The Indictment fairly informs him of the charges' nature; each count includes the specific claimed deductions to which Abramson was allegedly not entitled but that he knowingly subscribed to in the return. Id. This is sufficient. Even were the Court to assume all Abramson's arguments were correct, the Court may deny a Rule 12(b)(1) motion based on the indictment's legal sufficiency alone. See Yashar, 166 F.3d at 880; White, 610 F.3d at 958.

The government need not prove its case at the charging phase; it need only adequately allege the elements of the crime. See United States v. Rodriguez Rivera, 918 F.3d 32, 35 (1st Cir. 2019) (“[T]he government need not recite all of its evidence in the indictment.”); United States v. DeLaurentis, 230 F.3d 659, 661 (3d Cir. 2000) (“The government is entitled to marshal and present its evidence at trial, and have its sufficiency tested by a motion for acquittal ....”). It is enough at this stage that the government has alleged that Abramson filed the Forms 1120X, along with the other required elements of the offense.

The Court also finds, however, that Abramson's arguments fail on their merits.

B. Abramson's Defense Cannot Be Determined as a Matter of Law

In some circumstances, a court may grant a Rule 12(b) motion when a defendant raises and establishes a defense that is clear from the face of the indictment, such as a statute-of-limitations defense. United States v. Sampson, 898 F.3d 270, 279 (2d Cir. 2018). “But when such a defense raises dispositive ‘evidentiary questions,' a district court must defer resolving those questions until trial.” Id. (citing United States v. Knox, 396 U.S. 77, 83 & 83 n.7 (1969)); see also United States v. Shortt Accountancy Corp., 785 F.2d 1448, 1452 (9th Cir. 1986) (“If [a] pretrial claim is ‘substantially founded upon and intertwined with' evidence concerning the alleged offense, the motion falls within the province of the ultimate finder of fact and must be deferred.” (internal citation omitted)).

The Federal Rules of Criminal Procedure do not provide a mechanism analogous to the motion for summary judgment in the Federal Rules of Civil Procedure. See Sampson, 898 F.3d at 279-81 (collecting cases and explaining that procedural rules in civil cases allow dismissal based on proffered evidence by parties but that no such analogue exists in criminal cases). “[W]hen a defense raises a factual dispute that is inextricably intertwined with a defendant's potential culpability, a judge cannot resolve that dispute on a Rule 12(b) motion.” Id. at 281 (citing United States v. Schafer, 625 F.3d 629, 635 (9th Cir. 2010)).

Here, Abramson's contention that the IRS “rejected” his amended tax returns, such that they cannot be considered filed as a matter of law, is not a defense that is clear on the face of the indictment. He relies on evidence proffered to the Court that purportedly proves that the IRS rejected his attempt to file amended tax returns. This evidence, he says, supports his legal argument that the IRS rejected his returns, so the IRS never accepted them; ergo, they were never filed. (See dkt. 80 at 6-7; see also dkt. 81 (Exhibits filed under seal)). Ignoring, for the moment, his legal argument-that the IRS must “accept” an amended return for it to be considered filed-his defense is “inextricably tied” to the factual premise that the IRS “rejected” his returns. See Sampson, 898 F.3d at 281.

Abramson's defense relies on external evidence to argue...