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ANTHONY P. CAPOZZI, CSBN: 068525 NICHOLAS A. CAPOZZI, CSBN: 275568 LAW OFFICES OF ANTHONY P. CAPOZZI 1233 W. Shaw Avenue, Suite 102 Fresno, California 93711 Telephone: (559) 221-0200 Facsimile: (559) 221-7997 E-mail: capozzilaw@aol.com Attorney for Defendant, Michael S. Ioane IN THE UNITED STATES DISTRICT COURT EASTERN DISTRICT OF CALIFORNIA, FRESNO UNITED STATES OF AMERICA, Plaintiff, vs. Michael S. Ioane, Defendant. ) ) ) ) ) ) ) ) ) ) Case No.: 1:09-CR-00142-LJO REPLY TO THE GOVERNMENTS SENTENCING MEMORANDUM DATE: 1/3/2012 TIME: 2:00 pm Hon. Lawrence ONeill

TO THIS HONORABLE COURT AND TO THE UNITED STATES ATTORNEY FOR THE EASTERN DISTRICT OF CALIFORNIA: Defendant, Michael S. Ioane, by and through his attorney of record, Anthony P. Capozzi, and hereby Replies to the Governments Memorandum. The Recommended Sentence Violates the Spirit and Intent of United States Sentencing Guidelines The clearly Government violates obviously BASIC agrees APPROACH with the PSR that Sentencing Supplemental Sentencing

recommends a 121 month sentence. the

However, the recommendation (Policy Statement)

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pursuant to Chapter One, Part A, Section 3 of the Guidelines which states in pertinent part: . . . The basic objective is to combat crime through as effective, fair sentencing system. Congress sought uniformity and proportionality in sentencing. In United States v. Booker and Fan Fan 543 US 220, 253 125 S.Ct. 738, 761 (2005) the court stated, . . . Congress basic goal in passing the Sentencing Act was to move the sentencing system in the direction of increase uniformity . . . That uniformity does not consist simply of similar sentences for those convicted of violations of the same statute . . . consists, more importantly, of similar relationships between sentences and real conduct . . . The recommended sentence for Dr. Booth is approximately 37 months. The recommended sentence of 121 months for Michael Ioane stains the fabric of reason beyond any spirit and intent of the U.S. Guidelines and case law. Criminal History The defense is not arguing, as the Government alleges, that all The of Court in the is Defendants requested convictions to that apply the are not to of be the counted. 4A1.3(b)(1) Defendants Guidelines determining criminal

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history

over

represents

the

seriousness

of

any

criminal

activity. Exhibit A submitted by the Government is irrelevant and has absolutely nothing to do with the Defendants criminal history. attempt Court. This involved a dispute in a civil case and is an to It tarnish is and prejudice this Defendant that with A the be respectfully requested Exhibit

deleted from the record. Amount of Loss The tax due was not proven at trial by the Exhibits displayed by the Government in its Sentencing Memorandum. Exhibit B is a NOTICE OF DEFICIENCY not a statement of taxes due and owing. Notice of Deficiency. a tax due. Exhibits C and D are requests to rescind the and Objections to the Notice of Deficiency

These documents cannot be considered evidence of In United States v. Robinson, 920 F.2d 1157, 1158

(3rd Cir. 1991) in a taxpayer action to quiet title alleging that the IRSs failed to comply with statutory procedures for creating a lien, the court stated: When the IRSs believes that the taxpayers have not paid all or any part of their income tax due, the following procedures apply: The IRSs mails a Notice of Deficiency to the taxpayers by certified or registered mail. 26 U.S.C. 6212(a) Once this Notice is mailed, the taxpayers have 90 days in which to file a petition for redetermination in the tax court. 26 U.S.C. 6213.
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The court went on to state that: The Notice of Deficiency, sometimes called a Ninety Day letter, is the taxpayers ticket to the Court to litigate the merits of the deficiency determination, (citations omitted) and is a jurisdictional prerequisite to a suit in that forum. (citation omitted) Until 90 days have passed, the IRSs can neither make an assessment nor utilize court procedures for collection. (citation omitted) If the taxpayers file in the Tax Court within that period, the restraint on the IRSs continues until the decision of the court becomes final. 26 U.S.C. 6213(a)(emphasis added). If the taxpayers do not file a petition in the Tax Court within the specified time, the IRSs makes an assessment. 26 U.S.C 6213(c) Within 60 days after making an assessment, the IRSs must issue a Notice and Demand Letter to the taxpayers, specifying the amount due and demanding a payment. 26 U.S.C. 6303. The important and relevant part to the issue here is: The Notice is a pivotal feature of the codes assessment procedures; (citation omitted) because it serves as a prerequisite of a valid assessment by the IRSs . . . By providing an opportunity to litigate the merits of the deficiency in the tax court without requiring payment of the full amount allegedly owed, the statute provides substantial benefits to the taxpayers. Robinson, 920 F.2d at 1158.

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This review of Robinson, 920 F.2d at 1158 supra, is clear evidence that the Notice of Deficiency does not establish a tax due. Sophisticated Means The arguments set out in Defendants Objections to the PSR on pages were 4-7 adequately cover this and Dr. topic. The Defendants actions may have covered minimal planning but his actions elementary, would that foolish, occur unsophisticated. Booth him was and the who Clearly, if this enhancement were not applied to Dr. Booth, a sentencing person who disparity requested since Defendant act for

benefitted from these actions. 18 U.S.C. 3553(a). Role Enhancement The Government has the burden to establish that the

Defendant qualifies for an aggravating role increase. States v. Jones, 356 F.3d 529 (4th Cir. 2004). be Dr. Booth not Michael Ioane.

United

If anyone

should receive a role enhancement pursuant to 3B1.1 it should In United States v. Mickle, 464 F.3d 804 (8th Cir. 2006), the court upheld a leadership role where the defendant recruited accomplices, planned the offense and received a substantial share of the proceeds. This description fits Dr. Booth not Michael Ioane. Michael Ioane followed the direction of Dr. Booth, who already had trusts in place and advisors informing him of how to evade his taxes and payment of his taxes. Dr. Booth recruited the accomplices, and received the benefits not Michael Ioane.
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The Government has not cited one case to support its argument. The cases cited in Defendants objections, United States v. May, 343 F.3d 1 (1st Cir. 2003); United States v. Kilkenny, 493 F.3d 122 (2nd Cir. 2007); United States v. Wilson, 240 F.3rd 39 (D.C. Cir. 2001); United States v. Litchfield, 959 F.2d 1514 (35 Fed. R. Evid. 280 (10th Cir. 1992); United States v. Sostre, 967 F.2 728 (1st Cir. 1992); and United States v. Parmelee, 42 F.3 387, (7th Cir. 1994). All reject any enhancement for Michael Ioane and support such an enhancement for Dr. Booth. Obstruction of Justice Enhancement The Governments rendition of Michael Ioanes testimony is not accurate as it relates to the obstruction enhancement pursuant to 3C1.1. Michael Ioane testified as to what he did He did what he did in This is not testifying as a result of Dr. Booths request. good faith from his own perspective. falsely nor is it obstruction. The declaration of Patrick Jennings should be stricken as it is unrelated to any obstruction enhancement in the case. The Governments Declaration of Richard Ceraolo and Jay Steven alleges they are victims of Defendants trust scheme. The declarations should be stricken. criminal activity. Michael Ioane.
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None of this evidence

was used at trial as prior similar acts or as any type of The Government is attempting to tarnish

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The Government attempts to discredit Michael Ioane by referring to his personal tax case which has nothing to do with this case. In its Supplemental Memorandum the Government submits a Notice of Tax Due and Owing to Michael Ioane. This has nothing to do with 3C1.1 which relates to the obstruction or impeding of the investigation, prosecution or sentencing of the instant offense Memorandum of conviction. to the Nothing instant in case the and Supplemental related

should not be considered. Conclusion It is respectfully requested that the Court consider

these arguments in the sentencing of Michael Ioane.

Respectfully submitted, DATED: January 27, 2012 /s/ Anthony P. Capozzi Anthony P. Capozzi Attorney for, Michael S. Ioane

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