Free Response to Motion - District Court of Arizona - Arizona

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Plaintiff, United States of America, by and through its counsel of record, Larry J. 5. David Trepas; Defendant. United States of America, Plaintiff, v. Government's Response to Defendant David Trepas' Motion To Continue Sentencing CR03-344-PHX UNITED STATES DISTRICT COURT DISTRICT OF ARIZONA
LARRY WSZALEK State of Wisconsin Bar No. 1003722 MARK T. ODULIO District of Maryland Bar No. 26348 Trial Attorneys U.S. Department of Justice Tax Division Two Renaissance Square 40 N. Central Avenue, Suite 1200 Phoenix, Arizona 85004-4408 Telephone (602) 514-7661 PAUL K. CHARLTON United States Attorney District of Arizona

21 Wszalek and Mark T. Odulio, Trial Attorneys, Department of Justice, Tax Division, files its 22 23 24 25 objects. On March 27, 2006, IRS Special Agent Tom Klepper delivered to defense counsel a CD Response to Defendant David Trepas' Motion To Continue Sentencing. The Government

26 containing records supporting the three different tax loss methodologies employed by the 27 28

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1 Government in this case. The CD contained a spreadsheet outlining methodology 1, 2 & 3; 2 3 4 The Government recognizes the records are voluminous. However, it opposes any and scanned images of IRS records establishing the respective tax loss computations.

5 further motions to continue the sentencing in this case. As an alternative, the Government is 6 7 8 testimony of Special Agent Klepper on April 18, 2006, to explain the basis for each tax not opposed to bifurcating the sentencing hearings. The Government intends to offer the

9 loss methodology. Thereafter, the Government would not oppose deferring until a later date 10 the cross examination of Agent Klepper and the defendants' presentation of other evidence 11 challenging the tax loss methodologies. 12 Moreover, there are sentencing issues that can be addressed at the April 18, 2006, 13 14 hearing that do not require the taking of evidence. These issues include: 15 16 17 18 19 ¶45. 20 ¶44. Defendant Objection. Whether a 2-level enhancement should apply because Ms. Ensign failed to report income exceeding $10,000 income which was derived from criminal activity. 2T1(b)(1) Defendant Objection. Whether a 2-level enhancement should apply because the offense involved "sophisticated concealment". 2T1.1(b)(2) Patricia Ensign:

21 Keith Priest 22 23 24 25 ¶45. 26 ¶44. Defendant Objection. Whether a 2-level enhancement should apply because Mr. Priest failed to report income exceeding $10,000 income which was derived from criminal activity. 2T1(b)(1) Defendant Objection. Whether a 2-level enhancement should apply because the offense involved "sophisticated concealment". 2T1.1(b)(2)

27 David Trepas 28
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1 ¶47. 2 3 4

Government Objection. Whether a 2-level enhancement should apply based upon the Government's position that David Trepas provided materially false testimony at trial. 3C1.1

Rachel McElhinney Defendant Objection. Whether a 2-level enhancement should apply because Mr. Priest failed to report income exceeding $10,000 income which was derived from criminal activity. 2T1(b)(1) Defendant Objection. Whether a 2-level enhancement should apply because the offense involved "sophisticated concealment". 2T1.1(b)(2) Government Objection. Whether a 2-level enhancement should apply based upon the Government's position that Rachel McElhinney provided materially false testimony at trial. 3C1.1 Defendant Objection. Whether a 2-level reduction for Acceptance of Responsibility should be afforded Defendant McElhinney. 3E1.1

5 ¶44. 6 7 8 9 10 11 12 ¶50. 13 14 15 ¶48. ¶45.

It is in the Government's interest to start the sentencing hearing in this case. It is in the

16 Government's interest to have all objections to the presentence reports filed in a timely 17 fashion; to have a final presentence report prepared for each defendant; and to have those 18 issues that do not require the taking of evidence addressed at the April 18, 2006 sentencing 19 20 hearing. 21 22 23 24 Special Agent Klepper will be testifying to the tax loss methodologies in this case, the Lastly, the Government notes that individual sentencing hearings, with staggered starting times, have been scheduled for each of the five defendants on April 18, 2006. To the extent

25 Government requests the hearings for all defendants be joined to permit the efficient 26 27 28
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1 presentation of the Government's case. The Government expect Agent Klepper's testimony 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28
4
1628094.1

will last no longer than 1 hour. Respectfully submitted this 5th day of April, 2006. PAUL K. CHARLTON United States Attorney District of Arizona /s/ LARRY J. WSZALEK MARK T. ODULIO Trial Attorneys
I hereby certify that on April 5, 2006, I electronically transmitted the attached document to the Clerk's Office using the CM/ECF system for filing and transmittal of a Notice of Electronic Filing to the following CM /ECF registrants:: Stephen Kunkle 111 W. Monroe, Suite 1212 Phoenix, AZ 85003 Counsel for Dennis Poseley Alex Gonzalez 1811 S. Alma School Road, Suite 230 Mesa, AZ 85210 Counsel for Patricia Ensign Rena P. Glitsos 45 W. Jefferson Luhrs Tower - Suite 512 Phoenix, AZ 85003 Counsel for David W. Trepas Richard L. Juarez 2450 South 4th Avenue Suite 400 Yuma, AZ 85364 Counsel for Rachel McElhinney Gregory T. Parzych 1811 South Alma School, Suite 200 Mesa, AZ 85210-3005 Counsel for Keith D. Priest

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