Instructions In this short paper, you will formulate a pre-sentence investigation report using the provided template and based on the scenario on page 85 of the textbook regarding Defendant Jones. To

Chapter Review

4-6eCase Study Exercise No. 2 Sample Federal Presentence Investigation Report

Below you will find an example of a federal PSI report in which all names and places are fictitious. After reading the report, you may wish to discuss the case in class or use the information below to construct your own electronic PSIR in a fillable PDF file. See: http://www.txnp.uscourts.gov/sites/default/files/files/txnproform1a.pdf

In the United States District Court for the Western District of Atlantis, United States vs. Frank Jones

Part A. The Offense

Charge(s) and Conviction(s)

1. Frank Jones was named in a three-count indictment filed by a Western District of Atlantis grand jury on November 1, 2013. Counts one through three charge that the defendant attempted to evade income tax due and owed by him and his wife for calendar years 2010, 2011, and 2012, in violation of 26 U.S.C. § 7201. On November 15, 2013, superseding information was filed by the United States Attorney’s Office in the Western District of Atlantis. The information charges that on October 15, 2012, Mr. Jones evaded income tax due and owed by him and his wife for the calendar year 2012 by writing a check to the American Medisearch Organization in the amount of $20,000, for which he received 90% back in cash, and by filing a false tax return in which he deducted as a charitable contribution the entire amount of $20,000, in violation of 26 U.S.C. § 7201.

2. On November 21, 2013, Mr. Jones was released on his own recognizance and was ordered to report to the Pretrial Services Agency. On December 1, 2013, in accordance with the terms of a written plea agreement, the defendant pleaded guilty as charged. Mr. Jones is scheduled to be sentenced on June 5, 2014.

3. According to his supervising pretrial services officer, Mr. Jones made satisfactory adjustment while under pretrial services supervision and reported as directed. Additionally, Mr. Jones maintained employment, and there were no substance-related issues with the defendant.

The Official Version

1. The American Medisearch Organization (AMO) is a not-for-profit national corporation that supervises fungus research. Across the country, the AMO derives its funds from 50 charter divisions, which are separately incorporated not-for-profit organizations. Atlantis Division, Inc. of the AMO is located in Breaker Bay, Atlantis. In late 2012 the AMO began to raise funds through an annual fall dinner-dance called Casino Night.

2. Nancy Oscar began employment with the AMO in 2009 as a field services representative. Ms. Oscar, who created the dinner-dance fund-raising event, was responsible for the fund-raising activities of the AMO. Three schemes developed from the dinner-dance, all of which were aimed at enabling various “contributors” to inflate or falsify their “charitable” donations that they would then report and deduct on personal, corporate, partnership, or private foundation federal income tax returns.

3. At the dinner-dance, which was usually held in October, guests were permitted to write checks, payable to the AMO, to purchase gambling chips. Ten percent of the value of each check was retained by the AMO as a donation, but 90% was returned to the contributor in the form of gambling chips.

4. Although the AMO raised money from other fund-raising events, its major source of income was from the annual dinner-dance. Over the years the number of people attending the dinner-dance increased, the amount of advance check cashing increased, the amount of checks written for gambling chips increased, and the amount of money raised for the AMO increased. In 2009, the organization raised $73,000, whereas in 2012 the organization raised $360,000.

5. This scheme was in essence a check-cashing operation, allowing contributors to draw on checks to the AMO several weeks before the dinner-dance affair.

6. After the checks cleared the account, Ms. Oscar and other employees at her direction arranged for the bank to ship cash to the dinner-dance site. Ms. Oscar and some of the officers and members of the AMO then met in rooms at the dinner-dance site where they placed the cash in envelopes in amounts corresponding to 90% of the face value of the checks sent in advance of the dinner-dance by the contributors. Ms. Oscar also arranged for additional cash to be available at the dinner-dance for those members who chose to redeem their chips for cash. The scheme was able to continue and flourish not only because of the greed of the so-called contributors but also due to Ms. Oscar’s bookkeeping methods.

7. In support of their income tax submissions, contributors often attached to their tax returns copies of the fraudulent checks they had written to the AMO, and during routine audits they furnished original copies of these fraudulent checks to agents of the Internal Revenue Service (IRS), thus directly or indirectly misrepresenting the full amount of the checks as charitable contributions to the AMO.

8. Over the years the number of participants in this scheme substantially increased from 120 in 2007 to approximately 650 in 2009, according to available records, the federal government has sought prosecution of only those contributors who participated in the various kickback schemes and filed fraudulent tax returns when the total amount of their checks written to the AMO was $30,000 or more over several years, or $20,000 in one given year. To date, the government has prosecuted Nancy Oscar, who was the organizer and creator of this scheme. She recently pleaded guilty to a three-count indictment charging her with mail fraud, income tax evasion, and wire fraud along with five “contributors”—namely, the defendant Frank Jones together with Samuel James, Brian McDonald, Vincent St. James, and Donald Goodman. In total, the government expects to obtain indictments of approximately 30 additional contributors. Although the value of the checks written to the AMO varied from contributor to contributor, the check writers are equally culpable.

9. Frank Jones participated in this false deduction scheme involving the Atlantis division of the AMO and filed fraudulent income tax returns for the years 2010, 2011, and 2012. During each of these years Mr. Jones made contributions of $20,000, but he received 90% of the contribution (or $18,000) back in cash or in gambling chips, some of which he gambled with but the majority of which he redeemed for cash. However, on each of his individual income tax returns, filed jointly with his wife, Mr. Jones deducted the full amount of $20,000 as a charitable contribution, even though he was only entitled to deduct $2,000 in each tax year, which represents the 10% retained by the Atlantis Medisearch Organization as a contribution.

Victim Impact Statement

The IRS is the victim. In each tax year of 2010, 2011, and 2012, Frank Jones deducted $20,000 as a charitable contribution from his taxable income, when in fact he was only entitled to deduct a total of $2,000 as a charitable contribution during each tax year. As a result, Mr. Jones underreported his taxable income by $54,000. According to the results of an IRS audit, Mr. Jones had outstanding tax liabilities, not including interest and penalties, in the amount of $27,000.

Adjustment for Defendant’s Acceptance of Responsibility

1. During an interview with IRS agents, Mr. Jones readily admitted his involvement in this offense. He explained that he had falsely claimed the charitable deductions on his personal tax returns because everyone else who attended the dinner-dance was claiming the deductions.

2. Mr. Jones added that his involvement in this offense has had an adverse effect on his career and in retrospect he never envisioned the potential impact such wrongdoing would have on his life. He expressed feelings of both embarrassment and regret, and assumes full responsibility for his criminal conduct, as supported by his recent tax payment to the IRS in the amount of $27,000. Mr. Jones indicates that he will immediately pay the balance of his tax liabilities once the IRS has assessed interest and penalties.

Offense Level Computation

1. In this offense, the total amount of evaded taxes is $27,000. According to USSG. §2T4.1(D), the base offense level for tax losses of more than $12,500 but less than $30,000 is computed as Level 12.

Part B. The defendant’S Criminal History Juvenile Adjudications

None.

Criminal History Computation

A check with the FBI and local police authorities reveals no prior convictions for Frank Jones. Therefore, Mr. Jones has a criminal history score of zero. According to the sentencing table (Chapter 5, Part A), 0 to 1 criminal history points establish a criminal history category of I.

Part C. Offender Characteristics: Personal and Family Data

Frank Samuel Jones was born on March 19, 1981, in Breaker Bay, Atlantis, to the union of Samuel and Patricia Jones. Mr. Jones is an only child and was raised by his parents in the Upper River section of Breaker Bay in an upper middle-class socioeconomic setting. Mr. Jones has fond memories of his developmental years, indicating that he was reared according to Roman Catholic traditions by concerned, loving parents who emphasized hard work, respect, and honesty.

The defendant’s father was a partner in the Atlantis Tallow Company, a refinery and exporting company that manufactured tallow, the main ingredient in soap. When the defendant was in his senior year of high school, his father became critically ill with tuberculosis and was not expected to recover. Mr. Jones worked at his father’s company and managed to finish high school with decent grades. According to the defendant, his father died following a massive heart attack. While reporting a positive relationship with his father, Mr. Jones advised us that he had felt much closer to his mother who is still living.

Mr. Jones married Nancy Lipson Smith. This union produced two children—Frank, Jr., and Melissa, ages six and eight, respectively. For the past five years, the defendant and his family have resided in a rather upper-class area in Breaker Bay. A home investigation found this five-bedroom bi-level, ranch-style home to be impeccably maintained.

Mrs. Jones describes her marriage in harmonious terms and states that the defendant is a kind, considerate, and devoted husband and father. Mr. Jones, for the most part, is a private person and has suffered embarrassment as a result of the publicity in this case. The defendant’s wife believes that her husband’s actions “were not very well thought out,” adding that “he never thinks about the impact his actions may have on his life or family.” Mrs. Jones considers the defendant’s conduct in this offense as an isolated incident contrary to his otherwise “law-abiding lifestyle.” According to Mrs. Jones, her husband has been described by his children as a “workaholic,” but he never allows himself to neglect the needs or concerns of his family.

Physical Condition

The defendant is 5΄10˝ tall and weighs 180 pounds. He has brown eyes and slightly graying short brown hair. Mr. Jones described his overall physical health as excellent.

Mental and Emotional Health

The defendant states that he has never been seen by a psychiatrist and describes his overall mental and emotional health as good. We have no information to suggest otherwise. Mr. Jones was polite and cooperative during the presentence process and presented himself as a professional and soft-spoken businessman, voicing normal stress and concerns affiliated with pending legal difficulties.

Substance Abuse

Mr. Jones states that he rarely drinks alcohol and has never used narcotics. A urine specimen collected by the probation officer tested negative for illicit drug use.

Education and Vocational Skills

The defendant earned a Bachelor of Science degree in marketing. This was confirmed by the registrar’s office at Atlantis University.

Employment Record

For the last five years, Mr. Jones has been employed by Greater Life Securities, Inc., in Breaker Bay, where he earns approximately $80,000 a year. Prior to that he was employed by Marshall, Jones, and LaBelle Securities. Mr. Jones also worked at his father’s business for several years following high school until he was able to sell it to investors.

Financial Condition: Ability to Pay

A review of the defendant’s amended personal income tax returns for 2010 through 2012 (which now reflect the $57,000 in additional income previously reported as charitable deductions) reveals that he earned approximately $121,000 adjusted gross income.

• Equity in Other Assets: 1701 Seagull Lane, Breaker Bay, Atlantis (family residence), $280,000

• Unsecured debts: auto loan, $17,000; credit cards, −$3,000

• Monthly cash flow: $4,500

• Based on the defendant’s financial condition, he has the ability to pay a fine within the guideline range.

Part D. Sentencing Options

Based on an offense level of 12 and a criminal history category of I, the guideline range of imprisonment, if warranted, is 10 to 16 months. The defendant is eligible for a term of probation in this offense, pursuant to 18 U.S.C. § 3561(a). The authorized term for a felony is not less than one nor more than five years, pursuant to 18 U.S.C. § 3561(c)(1).

Impact of Plea Agreement

Under the plea agreement, Mr. Jones has entered a plea to one count of tax evasion, in return for the dismissal of two other tax evasion counts.

Fine

According to USSG §5E1.2(c)(3), the minimum fine for this offense is $3,000 and the maximum fine for this offense is $30,000.

Restitution

Pursuant to 18 U.S.C. § 3663, restitution may be ordered. Restitution of $62,500 shall be ordered.  to be paid the IRS, and can be forwarded to the following address:

• Internal Revenue Service

• Attention: Uncle Sam Claim

• 111 IRS Tower

• Breaker Bay, Atlantis 11111

Part E. Factors That May Warrant Departure

The probation officer has no information concerning the offense or the offender that would warrant a departure from the prescribed sentencing guidelines.

Part F. Sentencing Recommendation U.S. District Court for the Western District of Atlantis Docket. # CR 05-002-01-KGG

Total Offense Level 12

Criminal History Category: I

Frank Jones is a successful businessman who appears to be a situational offender, having been motivated by opportunistic greed. Although his acceptance of responsibility and remorse are reflected in the guideline calculation, a sentence within the guideline range is recommended. As such, a split sentence of five months in a federal community correctional facility followed by five months of home confinement as a condition of supervised release is the recommended sentence to reflect the seriousness of the defendant’s conduct and to provide just punishment. The defendant earns a considerable income and is employed with a reputable commodities firm. In view of Mr. Jones’s financial profile, restitution of $62,500 and a fine of $20,000 in addition to the $100 penalty assessment are also recommended to be paid immediately. Inasmuch as he does not appear to pose a risk to the community or to be in need of correctional treatment, the minimum term of supervised release of two years will be sufficient. Since the defendant will owe interest and penalties to the IRS as soon as they are calculated, it is recommended that collection of these monies be a condition of supervised release. A restriction against incurring any new debts until the criminal sanctions are paid is an additional recommended condition. Disclosure of financial information is also recommended. As this is a felony conviction, Mr. Jones must submit to DNA testing. Within 72 hours of sentencing, the defendant shall report in person to the Atlantis Federal Community Corrections Center, 123 Willow Lane. While on supervised release the defendant shall not commit any federal, state, or local crimes, and he shall be prohibited from possessing a firearm and all controlled substances. He shall comply with the standard conditions of supervised release as recommended.

• Respectfully submitted,

• Craig T. Doe, U.S. Probation Officer

Source: Adapted from: Administrative Office of the U.S. Courts. 2006. The presentence investigation report, Publication 107. Washington, DC: U.S. Department of Justice. Available at: www.fd.org/pdf_lib/publication%20107.pdf