After being convicted by a federal jury earlier this year, a Neptune, New Jersey chiropractor was sentenced to 54 months in a federal prison. When he is released, he must serve an additional 5 years on supervised release. Jurors convicted David Moleski in February of 3 counts of submitting false tax returns, 1 count of obstructing the IRS, 1 count of wire fraud and 14 counts of mail fraud.
Prosecutors had claimed that Moleski filed 3 tax returns claiming $1.3 million in bogus refunds. Prior to filing the phony refund requests, he had not filed any tax returns for the 6 previous years.
The IRS first tried to go after Dr. Moleski civilly but prosecutors claim he began interfering with a bank that was ordered to seize his bank account. He then used “fake financial instruments that claimed to draw on an account at the U.S. Treasury.” The U.S. Attorney claims one of those “fake financial instruments” was for $500,000. They say that Moleski tried to pay off his mortgage with it.
From the court record, it appears that Dr. Moleski relied on worn out tax protestor rhetoric to defend himself against charges. Prior to the commencement of the trial, U.S. District Court Judge Freda Wolfson ruled that Moleski couldn’t raise arguments that the 16th Amendment to the U.S. Constitution (taxing authority) was invalid or that the federal courts had no jurisdiction to hear the case against him.
Moleski attempted to defend himself without the benefit of counsel. Concerned for his welfare, the court offered to appoint counsel for him. Moleski, however, apparently decided the court and the judge had no jurisdiction to hear his case. That may be his view, but Moleski will now spend the next 4 years of his life in a federal prison. Given his defenses, it is lucky that he did not receive a much longer sentence.
There are many people who buy into the so-called tax defier or tax protestor rhetoric. Some of their arguments appear quite persuasive. Folks like Moleski fail to realize, however, that it is the courts that interpret the laws, not Internet gurus. While we respect Moleski’s decision to seek a jury trial, the results of that trial were all but decided before the trial even began.
No one likes paying taxes. That doesn’t mean jurors are likely to give a break to someone who claims that he can issue his own financial instruments or demand million dollar phony refunds, refunds that would obviously be paid by members of the jury and society in general.
There are a few “tax defiers” (the official IRS term) who have been acquitted for tax evasion. Their stories are all over the Internet. Most folks that tread down that path, however, wind up in prison. Unfortunately, you don’t often hear those stories. The lesson here? If you are a tax protestor and you are indicted by the IRS for tax evasion or tax fraud, don’t give up counsel. Make sure that you know the odds against you and have a trial strategy. Standing up and telling the court it has no jurisdiction over you is not a viable strategy.
I remember a 2008 case in which a Florida man was charged with tax evasion and promoting a scheme in which he would help others avoid paying taxes. That man refused to even participate in the trial against him. Everyday before the trial began the court asked the man if he wished to participate. Everyday he patiently told the judge that he wasn’t a “real” judge and that he wanted to be taken back to his cell. He was convicted in absentia and sentenced to 10 years. Clearly he believed in what he preached but there is a high price for those beliefs.
The criminal tax lawyers at Mahany & Ertl represent taxpayers under criminal investigation or charged with false tax returns, money laundering, tax evasion and failure to file tax returns. Need more information? Contact attorney Brian Mahany at or by telephone at (414) 704-6731 (direct). All inquiries protected by the attorney – client privilege and kept in confidence.