Free Motion for Departure - 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 21 22 23 24 25 26 27 28

PAUL K. CHARLTON United States Attorney District of Arizona LARRY W SZALEK MARK T. ODULIO Trial Attorneys U.S. Department of Justice Tax Division Two Renaissance Square 40 N. Central Avenue, Suite 1200 Phoenix, Arizona 85004-4408 Telephone (602) 514-7500 Telephone (202) 514-8032 Facsimile: (202) 514-9623

UNITED STATES DISTRICT COURT DISTRICT OF ARIZONA United States of America Plaintiff, vs. 7. Jeffrey G. Lewis Defendant. Plaintiff, United States of America, by and through its counsel of record, Larry J. Wszalek and Mark T. Odulio, Trial Attorneys, Department of Justice, Tax Division, hereby moves this court pursuant to USSG 5K1.1 to depart downward approximately 20% from the total offense level as determined by the Court at sentencing to reflect defendant JEFFREY G. LEWIS' substantial assistance in the prosecution of other persons in this case. Federal Sentencing Guidelines, Section 5K1.1, Substantial Assistant to Authorities (Policy Statement), provides that the court may depart from the guidelines if it determines that a reduction is appropriate for reasons stated that may include, but are not limited to, consideration of the following conduct: CR03-00344-PHX-MHM MOTION FOR DOWNWARD DEPARTURE

1

1821486.1

Case 2:03-cr-00344-MHM

Document 961

Filed 08/01/2006

Page 1 of 5

1 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

(1) the court's evaluation of the significance and usefulness of the defendant's assistance, taking into consideration the government's evaluation of the assistance rendered; (2) the truthfulness, completeness, and reliability of any information or testimony provided by the defendant; (3) the nature and extent of the defendant's assistance; (4) any injuries suffered or any danger or risk of injury to the defendant or his family resulting from his assistance; (5) the timeliness of the defendant's assistance. In evaluating the extent of the adjustment that should be given in this case the Government has reviewed those factors set forth in USSG 5K1.1 for guidance. The first consideration is an evaluation of the significance and usefulness of the defendant's assistance, taking into consideration the government's evaluation of assistance rendered. Here, Defendant Jeffrey Lewis ' cooperation was significant and useful. Significant in the sense that he testified against long-time friends and other co-defendants at trial and useful in demonstrating the sham nature of IFC's trusts. Jeffrey Lewis provided significant testimony "shamming" the trusts by describing the utter lack of fiduciary duties he exercised as a trustees over many of IFC's trusts. He testified that although he was a trustee in name, he had no input into the management of trust assets, exercised no control over the trust at all, and was not even aware of the trust's beneficiaries. He testified that the trust purchasers, called "managing directors" by IFC, retained exclusive dominion and control over all assets and income placed into the trust and that the trustees were totally ignorant of the trust's assets and income. He testified the trustees signed sham minutes on a regular basis depicting fictitious meetings thereby creating the false appearance of independent trustees. The second consideration is the truthfulness, completeness, and reliability of information or testimony provided by the defendant.

2

1821486.1

Case 2:03-cr-00344-MHM

Document 961

Filed 08/01/2006

Page 2 of 5

1 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

In this case, Defendant Jeffrey Lewis provided truthful, complete, and reliable information and testimony. First, he candidly admitted his own guilt. Jeffrey Lewis testified that he engaged in criminal conduct when, serving as a trustee, he blindly signed trustee minutes without knowing what property was in the trust. Although on cross examination, Jeffrey Lewis stated that it was not his intention to break the law while working at IFC and that he didn't think he did anything wrong, in the Government's estimation, the defendant's seemingly contradictory statements reflected an unsophisticated understanding of the offense conduct rather than an intentional attempt to deceive. Although Jeffrey Lewis was unable to specify what precise crime he violated while employed at IFC, he knew the pure trusts were operated in an abusive manner and he knew the trusts were used to conceal property and assets from the IRS. Indeed, on re-direct examination, he testified that despite having significant concerns about his trustee duties, which included in one instance signing blank checks, he continued to serve as a trustee even after the IRS executed a search warrant on IFC office on February 28, 2001. He acknowledged that he was wrong to engage in this conduct. Next, the defendant's information and testimony was reliable. Generally, none of the co-defendants challenged the factual accuracy of Jeffrey Lewis' testimony. Nor did the IRS investigation yield any materially different information to that provided by Defendant Jeffrey Lewis. The third consideration is the nature and extent of the defendant's assistance. In this case, Defendant Jeffrey Lewis pleaded guilty on December 10, 2003 eight months after the original indictment was returned in this case and over a year and a half prior to trial in the case. He was the very first defendant to plead guilty. Jeffrey Lewis met with authorities on numerous occasions following his plea and provided a detailed interview consistent with the cooperation provision of his plea agreement. Thereafter, in the weeks preceding trial, Defendant Jeffrey Lewis met with the prosecutor on no less than two occasions to prepare for trial. In addition, from time to time since defendant's guilty plea, IRS agents from other 3
1821486.1

Case 2:03-cr-00344-MHM

Document 961

Filed 08/01/2006

Page 3 of 5

1 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

parts of the country who are investigating individual clients of IFC for possible tax crimes have inquired of Jeffrey Lewis whether he had any personal knowledge concerning their targets. On one occasion, Jeffrey Lewis has provided testimony in a criminal trialof an IFC client in U.S. District Court for Massachusetts (United States v. Nadine Griffin, 05-CR-10175-WGY-1). The fourth consideration is whether or not there were any injuries suffered or any danger or risk of injury to the defendant or his family resulting from his assistance. The Government is not aware of any injuries suffered by Defendant Jeffrey Lewis as a result of his cooperation; nor is it aware of any danger or risk of injury to him or his family as a result of his cooperation. The fifth consideration is the timeliness of the defendant's assistance. As noted above, Defendant Jeffrey Lewis pleaded guilty on December 11, 2003 over one year before the start of the trial in this case. He was the first defendant to plead guilty and immediately submitted to a lengthy interview regarding his and others participation in IFC. The Government considers the defendant's assistance to be timely. For the forgoing reasons the United States respectfully requests and recommends to this Court that it depart downward approximately 20% from the total offense level determined by the Court at sentencing in order to give defendant JEFFREY G. LEWIS credit for cooperation and substantial assistance to law enforcement consistent with his plea agreement. Dated this 1st day of August, 2006. PAUL K. CHARLTON United States Attorney District of Arizona /S/ LARRY WSZALEK MARK T. ODULIO Trial Attorneys U.S. Department of Justice Tax Divison 4
1821486.1

Case 2:03-cr-00344-MHM

Document 961

Filed 08/01/2006

Page 4 of 5

1 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 5
1821486.1

I hereby certify that on August 1, 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: Alan M Kyman Law Office of Alan M Kyman 331 N 1st Ave Ste 104 Phoenix, AZ 85003-4528 602-253-5331 602-452-2996 (fax) [email protected]

Case 2:03-cr-00344-MHM

Document 961

Filed 08/01/2006

Page 5 of 5