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United States v. Pieron

United States District Court, E.D. Michigan, Northern Division

December 6, 2019

UNITED STATES OF AMERICA, Plaintiff,
v.
JAMES D. PIERON, JR., Defendant.

          OPINION AND ORDER DENYING THE DEFENDANT'S MOTION TO COMPEL THE TESTIMONY OF SPECIAL AGENT HOLLABAUGH AS MOOT

          THOMAS L. LUDINGTON United States District Judge

         On July 18, 2018, an indictment was returned against the Defendant James D. Pieron for tax evasion for 2008 and 2009. ECF No. 1. A jury found the Defendant guilty of the offense on March 7, 2019.

         The case is now in the sentencing phase and testimony has been received during two hearings. The Defendant has filed a motion to compel the testimony of IRS Special Agent Scott Hollabaugh. ECF No. 138. According to the Government, Agent Hollabaugh is a special agent with IRS Criminal Investigation (“IRS-CI”). ECF No. 140. The Government explains that Agent Hollabaugh was the third IRS-CI special agent assigned to the Defendant's investigation and was brought onto the investigation only after the Government had initiated the grand jury investigation. Agent Hollabaugh testified before the grand jury and the Defendant was furnished with a transcript of that testimony. He did not testify during the Defendant's trial nor has the Government called him as a witness during the Defendant's sentencing hearing.

         For the following reasons, the Defendant's motion to compel will be denied as moot.

         On August 1, 2018, the Government filed a Bill of Particulars which provides, as it is relevant to the immediate issue, as follows:

To demonstrate that James D. Pieron, Jr., willfully attempted to evade paying the federal income taxes he owed for 2008 and 2009, and that he committed affirmative acts of evasion in furtherance of his attempt to evade his tax obligations, the government intends to present evidence of the following at trial:
2. For several years, including 2008 and part of 2009, James D. Pieron, Jr., was a U.S. citizen residing in Switzerland and, as such, was required to annually file federal income tax returns and pay the taxes owed on his income. Between 1998 and 2009, while Pieron lived in Switzerland, the only federal income tax return that Pieron filed was for the year 2000. He reported on that return that he had negative income and no tax due.
3. Pieron received taxable income in 2008, for which federal income tax was due and owing on April 15, 2009. Pieron did not timely file a federal income tax return for 2008, request an extension, nor timely pay any federal income tax owed by him. Pieron had the means to pay his federal income tax for 2008 because he had received approximately $10, 000, 000 between December of 2006 and April of 2007, and $5, 250, 000 between December of 2008 and May 2009. He had sufficient funds available in April 2009 to pay his tax liability for 2008.
4. In July of 2009, Pieron completed and submitted an application to open a personal account with Peregrine Financial Group, Inc., on which Pieron stated that he did not have a social security identification number and that he was not a U.S. citizen. In connection with his application to open the same account, Pieron submitted an IRS form W8BEN from which he withheld his social security number and on which he stated falsely, but subject to the penalty for perjury, that he was “not a U.S. person.” 5. In November of 2009, Pieron wired $750, 000 from a Swiss bank account held by a business that was solely-owned by Pieron to an account at a bank in Mount Pleasant, Michigan held by IB Technologies, Inc., another business owned by Pieron.
9. In April of 2010, Pieron transferred $250, 000 from IB Technologies, Inc., to his personal bank account and then transferred $250, 000 from his personal account to Navitas Investments, LLC.
10. At various times in 2010, Pieron made wire transfers from Swiss bank accounts to his personal bank account in Mt. Pleasant, Michigan. Pieron did not use the funds to pay his tax liabilities. Rather, in August 2010, he transferred over $100, 000 to Navitas Investments, LLC.
11. In November of 2010, approximately five weeks before he filed his 2008 and 2009 returns, Pieron withdrew approximately $820, 000 from one of his personal foreign bank accounts. Later in November of 2010, Pieron transferred $800, 000 from his personal Swiss bank account to an account in Mount Pleasant, Michigan, for his solely owned business entity, Komplique, Inc.
12. In June of 2010, Pieron contacted American Tax Solutions, Inc., seeking assistance in the preparation of his tax returns for 2007, 2008 and 2009. Pieron provided spreadsheets, rather than source documents, to ATSI for use in preparing those tax returns. Based on the information provided by Pieron, ATSI prepared income tax returns for Pieron for tax years 2007, 2008 and 2009.
14. Shortly before he filed his 2007, 2008 and 2009 returns, Pieron retained the services of Kim Pavlik, a CPA with an accounting firm in Saginaw, Michigan. Pieron gave Pavlik spreadsheets with information that was different from the information that was on the spreadsheets Pieron had provided to ATSI. The spreadsheets that Pieron provided to ...

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