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Fraudulent payment for an I.R.S. debt was a nexus to obstructing I.R.S. administrative proceedings

Graham’s IRS problems started because he only paid a small portion of the money he made running bingo games from 2006 through 2009. When Graham’s payments to the IRS were too small to satisfy his debt, they became more aggressive and after sending lien and levy notices they began to confiscate and selling several pieces of his real estate. Those sales still fell short of is debt which by June of 2014 reached $3.6 million. Graham met a Thomas Walker who claimed to specialize in credit repair. Walker introduced Graham to two individuals Ben and James that he knew who claimed they could help him pay off his taxes with the help of a bill of exchange that would only cost Graham $10,000. After paying the fee, Ben and James sent Graham and Walker a packet of documents which Graham and Walker took to the IRS building in Montgomery, Alabama. Theses documents included a $3.6 million check entitled an “international bill of exchange. The bill of exchanged was not processed because it looked suspicious and determined to be fraudulent. Graham was indicted on one count of passing a fictitious financial instrument in violation of USC 514(a)(2) and one count of corruptly endeavoring to obstruct the administration of the internal revenue laws in violation of 26 USC 7212(a).

Following his federal criminal trial and conviction  Graham took this appeal arguing that there was insufficient evidence of a nexus between his actions and the administrative proceedings.   The issue here was whether Graham’s submission of a falsified bill of exchange to the IRS had a relationship in time, causation, or logic with some administrative proceeding by the IRS.

The court of appeals found that the nexus to an administrative case existed here because it found that for years the IRS took targeted administrative action against Graham well beyond the ordinary course of the agency’s actions with taxpayers.   The IRS officers had issue him notices of liens and levies and they oversaw seizure and sale of some of his property. Just before he submitted the international bill of exchange the IRS had sent him another notice of levy reminding him he owed about $3.6 million.

Another issue Graham appealed was the that the district court gutted his ability to offer a defense aby adverse evidentiary rulings that kept him from telling his competing story. This issue involved the limitation placed on witness Walker’s testimony. Graham wanted to offer Walker’s testimony and opinion about whether he personally believed that the international bills of exchange were valid forms of payment. The court found that restricting Walker’s testimony was not error because it had no bearing on Graham’s intent or that Walker ever discussed his thoughts to Graham. The court upheld the restriction on Walker’s testimony because the court did not prevent Graham from telling his story. It only prevented Graham from telling Walker’s story and what Walker thought and believed. If Graham had drawn any connection between how Walker’s subjective believe impacted him, the result may have been different.

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