United States v. Croteau

• Citation: 819 F.3d 1293
• Decision Date: 11 April 2016
• Docket Number: No. 15–11720.,15–11720.
• Parties: UNITED STATES of America, Plaintiff–Appellee, v. Ronald Francis CROTEAU, Defendant–Appellant.
• Court: U.S. Court of Appeals — Eleventh Circuit

819 F.3d 1293

UNITED STATES of America, Plaintiff–Appellee,
v.
Ronald Francis CROTEAU, Defendant–Appellant.

No. 15–11720.

United States Court of Appeals, Eleventh Circuit.

April 11, 2016.

819 F.3d 1297

Cherie Krigsman, U.S. Attorney's Office, Tampa, FL, U.S. Attorney's Office, Fort Myers, FL, for Plaintiff–Appellee.

David Jonathon Joffe, Joffe Law, PA, Fort Lauderdale, FL, for Defendant–Appellant.

Before HULL, JULIE CARNES and BARKSDALE,^* Circuit Judges.

HULL, Circuit Judge:

Following a jury trial, Ronald Croteau appeals his conviction and 56–month sentence for ten counts of making false, fictitious, or fraudulent claims on his tax returns, in violation of 18 U.S.C. § 287 and 2, and one count of corruptly interfering with the administration of internal revenue laws, in violation of 26 U.S.C. § 7212(a). Croteau appeals both (1) the sufficiency of the evidence supporting the jury's verdict, and (2) the procedural and substantive reasonableness of his sentence. After reviewing the parties' briefs and the record, and with the benefit of oral argument, we affirm.

I. BACKGROUND

A. Offense Conduct

The eleven-count indictment against defendant Croteau charged that from September 2008 to September 2010, Croteau filed at least ten false income tax returns with the IRS and created, submitted, and recorded various other false, fictitious, or fraudulent documents with the IRS and other government entities. We recount the evidence presented to the jury, viewing that evidence in the light most favorable to the government and drawing all reasonable inferences in favor of the verdict. United States v. Hunt, 526 F.3d 739, 744 (11th Cir.2008).

In September 2008, defendant Croteau filed three false and fraudulent tax returns for tax years 2006, 2007, and 2008. In these returns, Croteau reported that he was entitled to refunds totaling approximately $400,000 for these years. Croteau signed the forms under penalty of perjury, and he requested that the refunds be deposited into his bank account.

As substantiation for his tax returns, Croteau separately mailed to the IRS "transmittal-of-information" forms with attached 1099–OID (Original Issue Discount) forms purportedly issued to him by various financial institutions. The 1099–OID forms reported that the financial institutions had issued interest income to Croteau and had withheld sums for federal tax purposes. Croteau's tax returns sought refunds of the money withheld.¹

819 F.3d 1298

Not only was the financial information in these forms false, but so were the forms themselves. None of the financial entities listed on Croteau's 1099–OID forms had issued any interest income, much less withheld such income for which Croteau sought a refund. In response, a month later in October 2008, the IRS mailed Croteau a letter notifying him that he had provided the IRS with frivolous tax information.²

In November 2008, after Croteau submitted amended tax returns for 2006, 2007, and 2008, which still contained fictitious and fraudulent information, the IRS sent Croteau another letter. The letter warned Croteau that the tax return information he had submitted in September 2008 contained frivolous tax information, which reflected "a desire to delay or impede the administration of Federal tax laws." The letter explained that "[f]ederal courts, including the Supreme Court of the United States, [had] considered and repeatedly rejected, as without merit, positions" that Croteau had taken in his tax returns.

The IRS gave Croteau 30 days in which to file corrected information and threatened to impose a $5,000 penalty if he did not or if he again submitted a frivolous tax return. The IRS included with the letter a copy of a publication entitled "Why Do I Have to Pay Taxes?" and urged Croteau to seek advice from a competent tax professional or qualified attorney. Croteau promptly contacted the IRS in December 2008 requesting the IRS to cancel the 2007 and 2008 returns he had filed because the amounts were incorrect, and he indicated that he would contact his accountant. The IRS responded with a letter thanking Croteau for his cooperation.

Over the course of the next two years, this pattern repeated itself as (1) Croteau would submit tax returns claiming hundreds of thousands of dollars in refunds based on false and fraudulent financial information, (2) Croteau would likewise submit false and fraudulent supporting financial information to substantiate his returns in the form of fraudulent 1099–OID forms containing false income and withholding information, which the banks had not actually issued, (3) the IRS would then warn Croteau that it had discovered his frivolous submissions and that he was required to submit corrected information or be penalized, and (4) Croteau would then respond by admitting that he had made mistakes in his filings. The IRS assessed Croteau with three $5,000 penalties in total. The IRS never issued any refunds to Croteau because it successfully identified all his tax returns and refund information as being frivolous.

Yet again, in April 2009, Croteau filed two more frivolous tax returns containing false and fraudulent information. He filed a 1040 form for 2007 by mail, and he filed one for 2008 electronically. In his 2007 return, Croteau reported that he had earned taxable interest and total income of $147,557, that he owed taxes of $32,977, that $146,665 had been withheld, and that he was due a refund of $113,688. In his 2008 return, Croteau reported that he had earned taxable interest and total income of $1,000,011, that he owed taxes of $325,877, that $952,958 had been withheld, and that he was due a refund of $627,081. As before, Croteau submitted false and fictitious

819 F.3d 1299

1099–OID forms purportedly issued by several financial institutions as substantiation for his tax returns.

In May 2010, Croteau submitted two virtually identical false and frivolous 2009 tax returns claiming a refund of $957,670 based on tax payments he purportedly had made in 2008. He submitted one of these tax return forms by mail and the other electronically. Both his claimed tax payments and returns were false.

Then, in September 2010, Croteau mailed another false and frivolous 2007 tax return but altered the form to pertain to 2008. His supporting documentation likewise pertained to 2008. Croteau claimed a refund of $538,733. He also attached bogus 1099–OID forms purporting to show that 100% of his OID interest income had been withheld.

None of the financial institutions had actually issued the various 1099–OID forms that Croteau submitted along with his tax returns. These financial institutions also had no records that substantiated the information in Croteau's forms.

The IRS also had no record that Croteau had been paid 1099–OID interest income for tax years 2006, 2007, or 2008.

During much of this span, Croteau availed himself of the IRS's Filing Information Returns Electronically ("FIRE") system, an online computer system that businesses and financial institutions typically use to submit information returns to the IRS. The IRS uses these information returns to verify information that individual tax payers submit in their personal tax returns. Croteau used the FIRE system to submit dozens of 1099–OID information files to the IRS between March 2009 and September 2010 in support of his various tax return submissions.

Also from 2008 to 2012, Croteau created, submitted, and recorded various fictitious and fraudulent documents claiming rights to millions of dollars owed him by the U.S. Treasury and various government agencies and officials. For example, Croteau sent multiple fictitious and fraudulent financial instruments resembling stock certificates to the Secretary of the Treasury claiming $300 million in bonds. Croteau asked the Secretary to deposit the bonds for credit into Croteau's "private offset account." Next to his signature on these documents, Croteau affixed a fingerprint. A government witness from the U.S. Department of the Treasury testified that though Croteau's fictitious and fraudulent bond instruments exhibited "indicia or hallmarks ... intended to make [them] appear genuine," other features of the documents including the terminology used made it apparent that the documents were "nonsense."

Croteau also recorded several false, fictitious, and fraudulent liens and documents in the Lee County Clerk's office asserting that the IRS and various IRS officials owed him hundreds of millions of dollars in total. In August 2008, Croteau signed and recorded a "Notice of Lien, Diplomatic Immunity and Identity Bond on Land" and a "Private Discharging and Indemnity Bond" for $300 million. A month later, in October 2009, Croteau recorded a "Constructive Notice & Formal Complaint" printed on "Croteau & Associates The Law Men Group" letterhead. This document stated that "Ronald–Francis of the family Croteau" had discharged debt to the IRS totaling $1,973,692.17 from his Federal Reserve Bank trust account and that he had used the 1099–OID and 1099–A processes to discharge his tax payments for 2007 and 2008. The document also stated that the IRS and certain IRS employees and officials owed Croteau $1.3 million....