Appellate Circuit

Fifth Circuit Affirm Lengthy Jail Sentence for “Sophisticated” Tax Fraud Conviction against a Tax Preparer. The Same Cannot Be Said When Banks Commit Fraud. Not One Banker Went to Jail in Texas

The Government’s first sample of returns estimated a $4,805,820.50 tax loss. To arrive at this figure, the Government reviewed 100 income tax returns prepared by Patel in 2010.

COURT OF APPEALS FOR THE FIFTH CIRCUIT; No. 18-10302

UNITED STATES OF AMERICA, Plaintiff – Appellee
v.
PRITESH PATEL, also known as Tony Patel, Defendant – Appellant

Appeal from the United States District Court for the Northern District of Texas ; USDC No. 4:16-CR-267-1

Before SOUTHWICK, WILLETT, and OLDHAM, Circuit Judges. PER CURIAM:*

Pritesh Patel pled guilty to two counts of aiding and assisting in the preparation of false tax returns. On appeal, his only claims of errors concern his sentence. He challenges the district court’s application of the sophisticated-means enhancement and its calculation of tax loss. We AFFIRM.

FACTUAL AND PROCEDURAL BACKGROUND

Patel operated a tax-preparation business in Arlington, Texas. During tax years 2007 through 2011, Patel prepared fraudulent tax returns for his clients that improperly claimed education credits. After an Internal Revenue Service (“IRS”) investigation, Patel was indicted on 12 counts of aiding and assisting in the preparation of false tax returns. Patel pled guilty to two counts and the other counts were dismissed.

The Government’s first sample of returns estimated a $4,805,820.50 tax loss. To arrive at this figure, the Government reviewed 100 income tax returns prepared by Patel in 2010. All claimed an education credit. A key part of the government’s evidence was the absence of the T-1098 Tax Form for many who claimed the credit. Educational institutions are required to file that form when a taxpayer pays educational expenses. The Government found that only 46 of the reviewed returns — or 46 percent — had a corresponding Form 1098-T on file with the IRS. Therefore, it concluded that 54 percent of the returns were fraudulent. Accordingly, the Government determined that of the total education credits of $9,802,317 claimed by Patel’s clients for tax years 2007 through 2010, 54 percent — or $4,805,820.50 — were fraudulent.

Patel pointed out that the sample contained 99 tax returns, not 100, but more importantly, that 63 of the taxpayers were actually entitled to the education credits even though a Form 1098-T for some of them was missing from the sample. The Government conceded that the sample contained 99 returns and that there were inaccuracies about missing Form 1098-T’s in that sample. To remedy these errors, the Government had the IRS Scheme Development Center (“SDC”), which was not the source of the data for the original sample, conduct a second sample. This second sample yielded an estimated tax-loss amount of $6,707,011.50. We discuss later the relevant details of this second sample.

Patel objected to the second sample and to the sophisticated-means enhancement. The district court overruled his objections and applied the sophisticated-means enhancement. Patel appealed.

DISCUSSION

I. Tax-loss calculation

The base-offense level for a tax-fraud offense is determined by calculating the loss that was the object of the offense. UNITED STATES SENTENCING GUIDELINES §§ 2T1.1(a), (c), 2T4.1 (2018). The Guidelines’ commentary states that when “the amount of the tax loss may be uncertain,” the district court may “make a reasonable estimate” of the loss “based on the available facts.” Id. § 2T1.1, cmt. n.1. A district court’s loss calculation is a finding of fact reviewed for clear error. United States v. Johnson, 841 F.3d 299, 303 (5th Cir. 2016). A district court’s method of determining the amount of loss is an application of the Guidelines which we review de novo. United States v. Harris, 597 F.3d 242, 250–51 (5th Cir. 2010). “To prevail on an argument that the district court’s calculation of tax loss was clearly erroneous, a defendant must introduce evidence to contradict or rebut the alleged improper computation of the loss.” Johnson, 841 F.3d at 303.

The Government estimated the tax loss in the following manner. An IRS agent testified that he identified the Patel-prepared tax returns by using an electronic filing identification number (“EFIN”), an employer identification number, and a preparer taxpayer identification number (“PTIN”) registered to Patel and his business by the IRS. According to the agent, for the 2007 tax year, Patel filed 1019 tax returns claiming education credits in the amount of $1,289,281. For tax year 2008, the agent determined that Patel filed 1631 tax returns claiming education credits in the amount of $2,058,341.

Next, the agent determined the validity of these claimed education credits for those two tax years. To do so, the agent examined an IRS database for the Form 1098-T, which would reflect that an educational institution received a relevant payment from the taxpayer. When the agent could not locate a Form 1098-T on file to correspond with the education credit claimed by a taxpayer, the education credit was categorized as false.

Based on this process, the agent determined that 509 of the 1019 tax returns Patel filed for tax year 2007, or almost exactly half, did not have a corresponding Form 1098-T on file with the IRS. For tax year 2008, 59 percent did not have a corresponding form. Using 50 percent as the figure for each year, the agent calculated the tax loss for 2007 through 2011 to be $6,707,011.50.

Patel objected to the Presentence Report’s (“PSR”) recommendation that a tax loss of over six million dollars had occurred. The district court found the figure to be “a reasonable estimate based on the available facts.” Patel renews his objection on appeal. The Government counters that the method it used to estimate Patel’s tax loss produced a reasonable estimate, which is all that is required by the Guidelines.

According to Patel, the Government’s premise for its calculations that the absence of a Form 1098-T equates to a fraudulent education tax credit is incorrect. Patel relies on the first sample performed by the Government, which made the same assumption and overlooked many of the forms. Thus, Patel reasons that the second sample must be flawed too.

Further, two documents produced by the National Association of College and University Business Officers show that educational institutions sometimes lose or misidentify a taxpayer identification number (“eTIN”) on the Form 1098-T. Finally, Patel argues the second sample itself contained errors where data on an IRS spreadsheet was incorrectly entered.

In our analysis, we start with the fact that, though Patel produced evidence that he had Form 1098-T’s that were missing from the first sample, he offered no similar evidence for the second sample that surveyed different tax-year returns. We do not agree with the district court that the errors in the first sample were irrelevant to the second. Indeed, those errors raise questions about the significance of a missing Form 1098-T. Nevertheless, Patel needed to show that the Government’s second sample did not bear sufficient indicia of reliability on which to base an estimate.

To support that the second sample contains significant errors, Patel relied on the National Association of College and University Business Officers Advisory Report, which indicated that educational institutions sometimes fail to provide a student’s correct TIN number on a Form 1098-T. The Government introduced evidence that the highest taxpayer identification error rate due to educational institutions’ mistakes from tax year 2009 through 2012 was just 3.6 percent. That figure does not correlate at all to the error rate in the initial sample, but it is affirmative evidence supporting the methodology that was not directly rebutted. Thus, although error rates are relevant and indeed indicate that the tax-loss estimate is imperfect, Patel has not shown that the tax-loss estimate was unreasonable. See Johnson, 841 F.3d at 305.

Finally, at sentencing, Patel questioned the IRS agent about the purported errors in the second sample’s spreadsheet. The agent defended the spreadsheet entries and explained why the spreadsheet did not contain the kinds of errors Patel claimed. After Patel concluded this line of questioning, the district court asked the agent whether the “objections or the substance of them ha[d] caused [him] to change [his] opinion on the fairness and reasonableness of the estimate.” The agent still believed it to be “a fair estimate.” Patel fails to support that any error was material to the final tax-loss estimate. See Johnson, 841 F.3d at 305.

II. Sophisticated-means enhancement

A defendant’s offense level is increased two levels if the offense involved “sophisticated means.” U.S.S.G. § 2T1.4(b)(2). That phrase is defined as “especially complex or especially intricate offense conduct pertaining to the execution or concealment of an offense.” Id. § 2T1.4, cmt. n.3. The determination is a factual finding, which this court reviews for clear error. United States v. Clements, 73 F.3d 1330, 1340 (5th Cir. 1996). The PSR itself “generally bears sufficient indicia of reliability” to be competent evidence. United States v. Narviz-Guerra, 148 F.3d 530, 537 (5th Cir. 1998). “Bald, conclusionary statements do not acquire the patina of reliability by mere inclusion in the PSR.” Id. (quoting United States v. Elwood, 999 F.2d 814, 817–18 (5th Cir. 1993)).

According to the PSR, Patel filled out applications for several PTINs using employees’ information without their knowledge. Patel would use these PTINs to prepare tax returns. “This allowed [Patel’s business] to prepare a large number of returns each year without the IRS knowing Patel was the preparer.”
Patel says the district court erred in finding that the offense involved sophisticated means.

Specifically, he argues that “there is no evidence as to how many returns used the PTINs in question or whether they were used on any of the returns allegedly claiming a false education credit.” He also asserts that prior to 2011, all tax preparers had to use the PTIN of the business owner. As such, he applied for PTINs in the name of others only for the 2011 tax year. Finally, Patel argues that according to the IRS agent’s testimony, registering multiple PTINs did not aid in masking his scheme.

First, although Patel used only his and his wife’s PTINs in filing returns from 2008 through 2010, Patel used the PTINs of two other individuals to file

approximately 270 tax returns in 2011, in addition to the 870 returns he filed using his wife’s PTIN that year. The PSR does not state which of the 270 tax returns filed under the other two employees’ names, if any, fraudulently claimed an education credit. This, though, does not show clear error. The district court reasonably estimated that 50 percent of the tax returns Patel filed were fraudulent.

It would therefore be unreasonable to find that all 270 tax returns were not fraudulent. Even if none of the 270 returns he prepared under the others’ names were fraudulent, he still took steps to “obscure the link between the” actual false tax returns and himself by decreasing the total number of prepared tax returns with his PTIN. Clements, 73 F.3d at 1340.

Next, at the sentencing hearing, the agent testified that regardless of which PTIN is used by a tax preparer, a return can be traced back to the tax preparer by using an EFIN. Indeed, the agent traced all the returns filed by Patel via one EFIN registered to him. The agent’s testimony was in the context of explaining how, after the scheme was discovered, he was able to verify the fraudulent returns Patel was responsible for filing. Patel ineffectively relies on the agent’s testimony.

Patel has failed to show that the district court’s finding was clearly erroneous. One circuit has concluded that the “essence of [sophisticated means] is merely deliberate steps taken to make the offense more difficult to detect.” United States v. Kontny, 238 F.3d 815, 821 (4th Cir. 2001). We have upheld sophisticated-means enhancements when defendants have used the names of other people to make it more difficult for their offenses to be detected, even if that method was not by itself particularly sophisticated. E.g., United States v. Conner, 537 F.3d 480, 492 (5th Cir. 2008); United States v. Wright, 496 F.3d 371, 379 (5th Cir. 2007); Clements, 73 F.3d at 1340.

Patel took deliberate steps to make his offense more difficult for the IRS  to detect. He used PTINs of other employees without their knowledge to repare tax returns. This allowed Patel to prepare a larger number of tax returns in 2011 without the IRS knowing that he was the sole preparer.

AFFIRMED.

United States v. Patel

(4:16-cr-00267)

District Court, N.D. Texas

U.S. District Court
Northern District of Texas (Fort Worth)
CRIMINAL DOCKET FOR CASE #: 4:16-cr-00267-P-1

Create an Alert for This Case on RECAP

Case title: USA v. Patel Date Filed: 11/09/2016
Date Terminated: 02/28/2018

Assigned to: Judge Mark Pittman
Appeals court case number: 18-10302 United States Court of Appeals Fifth Circuit
Defendant (1)
Pritesh Patel
TERMINATED: 02/28/2018
also known as
Tony Patel
TERMINATED: 02/28/2018
represented by F Clinton Broden
Broden & Mickelsen
2600 State St
Dallas, TX 75204
214-720-9552
Fax: 214-720-9594
Email: clint@texascrimlaw.com
LEAD ATTORNEY
ATTORNEY TO BE NOTICED
Designation: Retained
Bar Status: Admitted/In Good StandingJohn W Stickels
Stickels & Associates PC
PO Box 121431
Arlington, TX 76012
817-479-9282
Fax: 817-622-8071
Email: john@stickelslaw.com
ATTORNEY TO BE NOTICED
Designation: Retained
Bar Status: Admitted/In Good Standing

Phillip C Umphres
The Law Office of Phillip C Umphres
8627 Royalbrook Ct.
Dallas, TX 75243
214-558-1285
Fax: 214-999-0037
Email: phil@umphreslaw.com
ATTORNEY TO BE NOTICED
Designation: Retained
Bar Status: Admitted/In Good Standing

Pending Counts Disposition
AIDING IN THE PREPARATION OF A FALSE TAX RETURN (Violation of 26 U.S.C. § 7206 (2))
(1)
36 months as to count 1 and 36 months as to count 11 to run consecutively, for a total term of 72 months. 1 year supervised release per count to run concurrently, for a total of 1 year. $200 MSA, Restitution of $6,011.
AIDING IN THE PREPARATION OF A FALSE TAX RETURN (Violation of 26 U.S.C. § 7206 (2))
(2-10)
Dismissed
AIDING IN THE PREPARATION OF A FALSE TAX RETURN (Violation of 26 U.S.C. § 7206 (2))
(11)
36 months as to count 1 and 36 months as to count 11 to run consecutively, for a total term of 72 months. 1 year supervised release per count to run concurrently, for a total of 1 year. $200 MSA, Restitution of $6,011.
AIDING IN THE PREPARATION OF A FALSE TAX RETURN (Violation of 26 U.S.C. § 7206 (2))
(12)
Dismissed
Highest Offense Level (Opening)
Felony
Terminated Counts Disposition
None
Highest Offense Level (Terminated)
None
Complaints Disposition
None

Plaintiff
USA represented by Mark L Nichols-DOJ
US Attorney’s Office
801 Cherry Street
Suite 1700
Fort Worth, TX 76102
817/252-5253
Fax: 817-252-5455
Email: mark.nichols@usdoj.gov
LEAD ATTORNEY
ATTORNEY TO BE NOTICED
Designation: Retained
Bar Status: Admitted/In Good Standing

 

Date Filed # Docket Text
11/09/2016 1 INDICTMENT as to Pritesh Patel (1) count(s) 1-12. (wxc) (Entered: 11/09/2016)
11/09/2016 3 Standing ORDER Concerning Paper Filing in Cases Assigned to District Judge John McBryde…see order for specifics. (Ordered by Judge John McBryde on 11/9/2016) (wxc) (Entered: 11/09/2016)
12/16/2016 5 Summons Returned Executed on 12/15/16 as to Pritesh Patel. (wxc) (Entered: 12/16/2016)
12/20/2016 6 Entry of Appearance of Counsel by John W Stickels appearing for Pritesh Patel (wxc) . (Entered: 12/20/2016)
12/20/2016 7 Minute Entry for proceedings held before Magistrate Judge Jeffrey L Cureton: Initial Appearance as to Pritesh Patel held on 12/20/2016. Date of Arrest: 12/20/2016 Location interval set to: LR. Bond executed. Defendant released. Attorney Appearances: AUSA – Mark Nichols; Defense – Roger Heath for John Stickels. (Court Reporter: Digital File) (No exhibits) Time in Court – :4. (wxc) (Entered: 12/20/2016)
12/20/2016 8 ORDER SETTING CONDITIONS OF RELEASE (Ordered by Magistrate Judge Jeffrey L Cureton on 12/20/2016) (wxc) (Entered: 12/20/2016)
12/20/2016 9 Minute Entry for proceedings held before Magistrate Judge Jeffrey L Cureton: Arraignment as to Pritesh Patel (1) Count 1-12 held on 12/20/2016. Plea entered by Pritesh Patel: Not Guilty on count(s) 1-12 Location interval set to: LR. Attorney Appearances: AUSA – Mark Nichols; Defense – Roger Heath for John Stickels. (Court Reporter: Digital File) (No exhibits) Time in Court – :2. (wxc) (Entered: 12/20/2016)
12/20/2016 10 SCHEDULING ORDER as to Pritesh Patel: Jury Trial set for 2/27/2017 08:30 AM before Judge John McBryde. Motions due by 1/4/2017. (Ordered by Judge John McBryde on 12/20/2016) (wxc) (Entered: 12/20/2016)
12/22/2016 11 (Document restricted to court users only) Receipt for Surrender of Passport as to Pritesh Patel. (ewd) (Entered: 12/22/2016)
01/04/2017 12 Government’s NOTICE of Possible Use of Video and Audio Recording and Transcript filed by USA as to Pritesh Patel. (tln) (Entered: 01/04/2017)
01/04/2017 13 ORDER as to Pritesh Patel: The court orders that: By 4:00p.m. on January 27, 2017 each party who has given timely notice of intent to use any audio or videorecording in the trial of this action shall: a. File with the Clerk, and deliver to the other party, a list of each recording such party might use inthe trial, which list shall state as to each such recording (i) the date on which the recording was made,(ii) the identity of each person whose voice is heard on the recording, and (iii) an indication by the best descriptive means available of the parts of the recording such party might use. See Order for specifics. (Ordered by Judge John McBryde on 1/4/2017) (mlm) (Entered: 01/05/2017)
01/27/2017 14 Government’s Notice of Transcript Identification filed by USA as to Pritesh Patel (wxc) (Entered: 01/27/2017)
02/07/2017 15 Unopposed Motion to Have Case Declared Complex and for Continuance of the Trial Date filed by Pritesh Patel (wxc) (Entered: 02/07/2017)
02/07/2017 16 ORDER… This case is reset for jury trial before the Honorable John McBryde at 8:30 a.m. on May 8, 2017, at which time and date PRITESH PATEL (“defendant”), counsel, and all witnesses will be present in the Fourth Floor Courtroom, United States Courthouse, Fort Worth, Texas… The court further ORDERS that all other deadlines and provisions of such December 20, 2016 order remain in effect and that all deadlines and provisions in the order the court issued in this case on January 4, 2017, remain in effect. (Ordered by Judge John McBryde on 2/7/2017) (wxc) (Entered: 02/08/2017)
03/23/2017 17 Notice of Appearance as Counsel & Notice of Appearance as Lead Counsel for Defendant by Phillip C Umphres appearing for Pritesh Patel (wxc) (Entered: 03/23/2017)
04/21/2017 18 ORDER… The court ORDERS that the re-arraignment hearing of defendant, PRITESH PATEL, be and is hereby, set for 10:30 a.m. on April 28, 2017, before the undersigned in the 4th Floor Courtroom of the United States Courthouse, Fort Worth, Texas. The court further ORDERS that Pritesh Patel, his attorney, and the attorney of United States of America responsible for handling this case be present at such time, date, and place. (Ordered by Judge John McBryde on 4/21/2017) (wxc) (Entered: 04/21/2017)
04/28/2017 19 Minute Entry for proceedings held before Judge John McBryde: Rearraignment Hearing as to Pritesh Patel held on 4/28/2017. Plea entered by Pritesh Patel (1) Guilty Count 11. Bond continued. Attorney Appearances: AUSA – Mark L. Nichols; Defense – Phillip C. Umphres. (Court Reporter: Debbie Saenz) (Exhibits admitted) Time in Court – :34. (wxc) (Entered: 04/28/2017)
04/28/2017 20 Court’s Exhibit and Witness List from Rearraignment Hearing held 4/28/17 as to Pritesh Patel. (wxc) (Entered: 04/28/2017)
04/28/2017 21 Factual Resume as to Pritesh Patel (wxc) (Entered: 04/28/2017)
04/28/2017 22 PLEA AGREEMENT as to Pritesh Patel (wxc) (Entered: 04/28/2017)
04/28/2017 23 Sentencing Scheduling Order as to Pritesh Patel: Presentence Investigation Report due by 6/19/2017. Objections to Presentence Investigation Report due by 7/3/2017. Presentence Investigation Addendum due by 7/17/2017. Objections to Presentence Investigation Addendum due by 7/24/2017. Sentencing set for 8/11/2017 09:00 AM before Judge John McBryde. (Ordered by Judge John McBryde on 4/28/2017) (wxc) (Entered: 04/28/2017)
05/04/2017 24 Government’s Notice Regarding Acceptance of Responsibility filed by USA as to Pritesh Patel (wxc) (Entered: 05/04/2017)
06/16/2017 25 MOTION to Extend the Date for Delivery of the PSR filed by USA as to Pritesh Patel. (bdb) (Entered: 06/16/2017)
06/16/2017 26 ORDER granting 25 … The court ORDERS that the government’s motion to extend the date for delivery of the presentence report be, and is hereby, granted and the probation officer shall deliver the presentence report to the court, and provide copies to defendant and counsel for the parties by 4:00 p.m. on June 26, 2017. In all other respects, the scheduling order for sentencing remains in effect. (Ordered by Judge John McBryde on 6/16/2017) (wxc) Modified to correct filed date on 6/19/2017 (wxc). (Entered: 06/19/2017)
06/28/2017 28 Defendant’s Unopposed MOTION for Extension of Time to File Response and Objections to PSR filed by Pritesh Patel. (bdb) (Entered: 06/28/2017)
06/28/2017 29 AMENDMENT TO SCHEDULING ORDER FOR SENTENCING as to Pritesh Patel: Objections to Presentence Investigation Report due by 7/10/2017. Presentence Investigation Addendum due by 7/24/2017. Objections to Presentence Investigation Addendum due by 7/31/2017. (Ordered by Judge John McBryde on 6/28/2017) (bdb) (Entered: 06/28/2017)
07/17/2017 31 Defendant’s Request for Downward Variance in Sentencing filed by Pritesh Patel (wxc) (Entered: 07/17/2017)
08/04/2017 35 ORDER RE PLEA AGREEMENT as to Pritesh Patel: The court ORDERS that each party file by 4:00 p.m. on 8/8/2017, a document containing each legal authority and each argument such party has on the subject of whether the court should accept such plea agreement. (Ordered by Judge John McBryde on 8/4/2017) (bdb) (Entered: 08/04/2017)
08/08/2017 37 Defendant Pritesh Patel’s Response to Court’s August 4, 2017 Order Re Plea Agreement by Pritesh Patel re: 35 Order (wxc) (Entered: 08/08/2017)
08/08/2017 38 Government’s Response to Court’s Order Regarding the Plea Agreement by USA as to Pritesh Patel re: 35 Order (wxc) (Entered: 08/08/2017)
08/09/2017 39 ORDER… After having received and reviewed the responses of the parties to the August 4, 2017 Order Re Plea Agreement, and upon further review of the objections of defendant, PRITESH PATEL, to the presentence report and its addendum, the court has concluded that the sentencing hearing that is now scheduled to be conducted in this case on August 11, 2017, should be cancelled. The court so ORDERS. (Ordered by Judge John McBryde on 8/9/2017) (wxc) (Entered: 08/09/2017)
08/10/2017 40 Notice of Scheduling Conflicts by Counsel for Defendant as to Pritesh Patel (wxc) (Entered: 08/10/2017)
08/28/2017 44 Government’s Response to Court’s Order Regarding Sentencing by USA as to Pritesh Patel re: 39 ORDER (wxc) (Entered: 08/28/2017)
09/19/2017 47 ORDER… There are a large number of previously made objections that must be dealt with before the court can proceed to sentencing, and the court still has pending the issue of whether defendant’s plea agreement with the government should be accepted. The court has concluded that there should be a separate hearing on matters related to the objections in an effort to resolve all of them before the court proceeds further on the issue of acceptance, vel non, of the plea agreement or sentencing. Therefore, The court ORDERS that such a hearing be conducted commencing at 10:00 a.m. on September 27, 2017, at which time and date counsel for the government, counsel for defendant, defendant, and all witnesses who are to testify at the hearing are to be present in the Fourth Floor Courtroom of the United States Courthouse, Fort Worth, Texas. (Ordered by Judge John McBryde on 9/19/2017) (wxc) (Entered: 09/19/2017)
09/27/2017 49 Minute Entry for proceedings held before Judge John McBryde: Courtroom Hearing as to Pritesh Patel held on 9/27/2017. Hearing on objections to presentence report. Robie Carricato and Larrisa Wilson sworn and testified. Attorney Appearances: AUSA – Mark Nichols; Defense – Phillip C. Umphres, John Stickels (until lunch break). (Court Reporter: Debbie Saenz) (Exhibits admitted) Time in Court – 2:36. (wxc) (Entered: 09/27/2017)
09/27/2017 50 Court’s Exhibit and Witness List as to Pritesh Patel. (wxc) (Entered: 09/27/2017)
09/27/2017 51 Sentencing Scheduling Order as to Pritesh Patel: Supplemental Conference set for 10/10/2017 10:00 AM before Judge John McBryde. Sentencing set for 10/13/2017 09:00 AM before Judge John McBryde. (Ordered by Judge John McBryde on 9/27/2017) (wxc) (Entered: 09/27/2017)
09/29/2017 52 Notice of Intent to Enter Guilty Plea to Count 1 of the Indictment and Request for Rule 11 Hearing on Change of Plea as to Pritesh Patel (wxc) (Entered: 09/29/2017)
09/29/2017 53 Amended Factual Resume as to Pritesh Patel (wxc) (Entered: 09/29/2017)
10/05/2017 54 ORDER as to Pritesh Patel… The court ORDERS that defendant, counsel for defendant, and counsel for the government be present in the Fourth Floor courtroom of the United States Courthouse, Fort Worth, Texas, for the supplemental hearing contemplated by such September 27, 2017 order and for consideraiion of Patel’s wish to change his plea of not guilty to the offense charged by Count 1 of the indictment to a plea of guilty. Because of the need for the probation office to prepare supplemental documentation pertaining to the status of the case as it will exist after such October 10, 2017 hearing, the court is hereby cancelling the sentencing hearing that was scheduled by such September 27, 2017 order to be conducted at 9:00 a.m. on October 13, 2017, subject to rescheduling for a later date, perhaps after the trial of the counts of the’ indictment that must be resolved by trial after such October 10, 2017 hearing mentioned above has been concluded. (Ordered by Judge John McBryde on 10/5/2017) (wxc) (Entered: 10/05/2017)
10/10/2017 55 Minute Entry for proceedings held before Judge John McBryde: Rearraignment Hearing as to Pritesh Patel held on 10/10/2017. Plea entered by Pritesh Patel (1) Guilty Count 1. Defendant bond continued. The court rejected the plea agreement as to count l l of the indictment and gave the defendant an opportunity to withdraw his plea of guilty to count 11 of the indictment. Defendant declined to withdraw his plea of guilty to count 11 of the indictment. The Govt read pertinent part of the amended factual resumed filed on 9/29/2017 and defendant agreed to its truthfulness Attorney Appearances: AUSA – Mark Nichols; Defense – Phillip C. Umphres. (Court Reporter: Debbie Saenz) (No exhibits) Time in Court – :30. (wxc) (Entered: 10/10/2017)
10/11/2017 56 MOTION to Dismiss Counts After Imposition of Sentence filed by USA as to Pritesh Patel. (bdb) (Entered: 10/11/2017)
10/12/2017 57 Amended Sentencing Scheduling Order as to Pritesh Patel: Presentence Investigation Report due by 10/26/2017. Objections to Presentence Investigation Report due by 11/9/2017. Presentence Investigation Addendum due by 11/22/2017. Sentencing set for 12/8/2017 09:00 AM before Judge John McBryde. (Ordered by Judge John McBryde on 10/12/2017) (wxc) (Entered: 10/12/2017)
11/15/2017 60 Government’s Motion for Extension of Time to Deliver its Response to Defendant’s Objections to the Amended Presentence Investigation Report filed by USA as to Pritesh Patel (wxc) (Entered: 11/15/2017)
11/16/2017 61 ORDER granting 60 … Before the Court is the government’s motion to extend the date to deliver its response to the defendant’s response and objections to the amended presentence report. After review of the motion, the Court concludes that it should be and is hereby GRANTED. Accordingly, the Court orders that the response be delivered by November 17, 2017. (Ordered by Judge John McBryde on 11/16/2017) (wxc) (Entered: 11/16/2017)
12/01/2017 65 ORDER… The court ORDERS that the sentencing hearing of defendant, PRITESH PATEL, be and is hereby, reset for 9:00 a.m. on December 29, 2017, before the undersigned in the 4th Floor Courtroom of the United States Courthouse, Fort Worth, Texas. (Ordered by Judge John McBryde on 12/1/2017) (wxc) Modified text on 12/5/2017 (wxc). (Entered: 12/04/2017)
12/18/2017 66 ORDER as to Pritesh Patel: The court ORDERS that the sentencing hearing of defendant, PRITESH PATEL, be and is hereby, reset for 10:00 a.m. on February 28, 2018 (Wednesday), before the undersigned in the 4th Floor Courtroom of the United States Courthouse, Fort Worth, Texas. The court further ORDERS that Pritesh Patel, his attorney, and the attorney of United States of America responsible for handling this case be present at such time, date, and place. All deadlines fixed by the orders signed April 28, 2017, June 28, 2017, September 27, 2017 and October 12, 2017, remain in effect. (Ordered by Judge John McBryde on 12/18/2017) (tln) (Entered: 12/18/2017)
02/28/2018 68 ORDER granting 56 IT IS HEREBY ORDERED that the government’s motion for dismissal of Counts 2, 3, 4, 5, 6, 7, 8, 9, 10 and 12 of the Indictment filed November 9, 2016 is hereby GRANTED and said counts against the above-named defendant are dismissed. (Ordered by Judge John McBryde on 2/28/2018) (wxc) (Entered: 02/28/2018)
02/28/2018 69 Minute Entry for proceedings held before Judge John McBryde: Sentencing held on 2/28/2018 for Pritesh Patel (1), Count(s) 1, 11, 36 months as to count 1 and 36 months as to count 11 to run consecutively, for a total term of 72 months. 1 year supervised release per count to run concurrently, for a total of 1 year. $200 MSA, Restitution of $6,011.; Count(s) 12, 2-10, Dismissed. Attorney Appearances: AUSA – Mark Nichols; Defense – Phillip C. Umphres and John Stickels. (Court Reporter: Debbie Saenz) (No exhibits) Time in Court – :37. (wxc) (Entered: 02/28/2018)
02/28/2018 70 Notice of Right to Appeal Sentence as to Pritesh Patel (wxc) (Entered: 02/28/2018)
02/28/2018 71 JUDGMENT IN A CRIMINAL CASE as to Pritesh Patel (1), Count(s) 1, 11, 36 months as to count 1 and 36 months as to count 11 to run consecutively, for a total term of 72 months. 1 year supervised release per count to run concurrently, for a total of 1 year. $200 MSA, Restitution of $6,011.; Count(s) 12, 2-10, Dismissed Pursuant to LR 79.2 and LCrR 55.2, exhibits may be claimed during the 60-day period following final disposition (to do so, follow the procedures found at Exhibit Guide). The clerk will discard exhibits that remain unclaimed after the 60-day period without additional notice. (Clerk to notice any party not electronically noticed.) (Ordered by Judge John McBryde on 2/28/2018) (wxc) (Entered: 03/01/2018)
03/08/2018 80 NOTICE OF APPEAL to the Fifth Circuit as to 71 Judgment, Filing fee $505, receipt number FW030313. by Pritesh Patel. T.O. form to appellant electronically at Transcript Order Form or US Mail as appropriate. Copy of NOA to be sent US Mail to parties not electronically noticed. IMPORTANT ACTION REQUIRED: Provide an electronic copy of any exhibit you offered during a hearing or trial that was admitted into evidence to the clerk of the district court within 14 days of the date of this notice. Copies must be transmitted as PDF attachments through ECF by all ECF Users or delivered to the clerk on a CD by all non-ECF Users. See detailed instructions here. (Exception: This requirement does not apply to a Defendant proceeding pro se.) Please note that if original exhibits are in your possession, you must maintain them through final disposition of the case. (tle) (Entered: 03/08/2018)
03/12/2018 81 ENTRY OF APPEARANCE by F Clinton Broden appearing for Pritesh Patel. (bdb) (Entered: 03/12/2018)
04/02/2018 82 Exhibits to Record on Appeal for USCA5 18-10302 (related to 80 appeal) as to Pritesh Patel: Record consisting of: (Government 1-7) Volume(s) or container(s) of trial or hearing original exhibits, transmitted to USA by hand delivery. (tle) (Entered: 04/02/2018)
04/04/2018 83 Transcript Order Form: re 80 Notice of Appeal, transcript requested for Rearraignment Hearing held on 4/28/17, Objections to the PSR held on 9/27/17, Rearraignment Hearing held on 10/10/17, Sentencing Hearing held on 2/28/18 (Court Reporter: Debbie Saenz.) Payment method: Private Funds – Requester has paid or will pay as directed by the reporter. Reminder to appellant: this document must also be filed with the appeals court. (tle) (Entered: 04/04/2018)
05/16/2018 84 Notice of Filing of Official Electronic Transcript of Rearraignment Proceedings as to Pritesh Patel held on 4/28/17 before Judge John McBryde. Parties are notified of their duty to review the transcript. See Misc Order 61 (MO) 61 and Special Order (SO) 19-1. If information that should be redacted under SO 19-1 is in the transcript, contact the Operations Assistance Team at (214)753-2240 immediately. If redaction of personal identifiers under MO 61 is necessary, file a Redaction Request – Transcript within 21 days. If no action is taken, the entire transcript will be made available through PACER without redaction after 90 calendar days. The clerk will mail a copy of this notice to parties not electronically noticed. (43 pages) Court Reporter/Transcriber Debbie Saenz, Telephone number 817.850.6661 or debbie.saenz@yahoo.com. A copy of the transcript may be purchased from the court reporter or viewed at the clerk’s office. Redaction Request under SO 19-1, due immediately. Redaction Request due 6/6/2018. Redacted Transcript Deadline set for 6/18/2018. Release of Transcript Restriction set for 8/14/2018. (dgs) (Entered: 05/16/2018)
05/16/2018 85 Notice of Filing of Official Electronic Transcript of Hearing on Objections to PSR and Addenda Proceedings as to Pritesh Patel held on 9/27/17 before Judge John McBryde. Parties are notified of their duty to review the transcript. See Misc Order 61 (MO) 61 and Special Order (SO) 19-1. If information that should be redacted under SO 19-1 is in the transcript, contact the Operations Assistance Team at (214)753-2240 immediately. If redaction of personal identifiers under MO 61 is necessary, file a Redaction Request – Transcript within 21 days. If no action is taken, the entire transcript will be made available through PACER without redaction after 90 calendar days. The clerk will mail a copy of this notice to parties not electronically noticed. (119 pages) Court Reporter/Transcriber Debbie Saenz, Telephone number 817.850.6661 or debbie.saenz@yahoo.com. A copy of the transcript may be purchased from the court reporter or viewed at the clerk’s office. Redaction Request under SO 19-1, due immediately. Redaction Request due 6/6/2018. Redacted Transcript Deadline set for 6/18/2018. Release of Transcript Restriction set for 8/14/2018. (dgs) (Entered: 05/16/2018)
05/16/2018 86 Notice of Filing of Official Electronic Transcript of Rearraignment Proceedings as to Pritesh Patel held on 10/10/17 before Judge John McBryde. Parties are notified of their duty to review the transcript. See Misc Order 61 (MO) 61 and Special Order (SO) 19-1. If information that should be redacted under SO 19-1 is in the transcript, contact the Operations Assistance Team at (214)753-2240 immediately. If redaction of personal identifiers under MO 61 is necessary, file a Redaction Request – Transcript within 21 days. If no action is taken, the entire transcript will be made available through PACER without redaction after 90 calendar days. The clerk will mail a copy of this notice to parties not electronically noticed. (25 pages) Court Reporter/Transcriber Debbie Saenz, Telephone number 817.850.6661 or debbie.saenz@yahoo.com. A copy of the transcript may be purchased from the court reporter or viewed at the clerk’s office. Redaction Request under SO 19-1, due immediately. Redaction Request due 6/6/2018. Redacted Transcript Deadline set for 6/18/2018. Release of Transcript Restriction set for 8/14/2018. (dgs) (Entered: 05/16/2018)
05/16/2018 87 Notice of Filing of Official Electronic Transcript of Sentencing Proceedings as to Pritesh Patel held on 2/28/18 before Judge John McBryde. Parties are notified of their duty to review the transcript. See Misc Order 61 (MO) 61 and Special Order (SO) 19-1. If information that should be redacted under SO 19-1 is in the transcript, contact the Operations Assistance Team at (214)753-2240 immediately. If redaction of personal identifiers under MO 61 is necessary, file a Redaction Request – Transcript within 21 days. If no action is taken, the entire transcript will be made available through PACER without redaction after 90 calendar days. The clerk will mail a copy of this notice to parties not electronically noticed. (38 pages) Court Reporter/Transcriber Debbie Saenz, Telephone number 817.850.6661 or debbie.saenz@yahoo.com. A copy of the transcript may be purchased from the court reporter or viewed at the clerk’s office. Redaction Request under SO 19-1, due immediately. Redaction Request due 6/6/2018. Redacted Transcript Deadline set for 6/18/2018. Release of Transcript Restriction set for 8/14/2018. (dgs) (Entered: 05/16/2018)
06/08/2018 88 Electronic Copy of Admitted Hearing or Trial Exhibit(s) by Pritesh Patel re: 80 Notice of Appeal, filed by Pritesh Patel. Exhibits are available for public inspection at the clerk’s office. (Attachments: # 1 Government Exhibit 1) (tle) (Entered: 06/08/2018)
06/08/2018 89 Sealed Electronic Copy of Admitted Hearing or Trial Exhibit(s) as to Pritesh Patel re: 80 Notice of Appeal,,,, filed by USA. Sealed exhibits are available for access only through the Electronic Record on Appeal. (Attachments: # 1 Exhibit(s) 1, # 2 Exhibit(s) 2, # 3 Exhibit(s) 3, # 4 Exhibit(s) 4, # 5 Exhibit(s) 5, # 6 Exhibit(s) 6, # 7 Exhibit(s) 7) (Nichols-DOJ, Mark) (Entered: 06/08/2018)
06/08/2018 90 Sealed Electronic Copy of Admitted Hearing or Trial Exhibit(s) as to Pritesh Patel re: 80 Notice of Appeal, filed by Defendant. Sealed exhibits are available for access only through the Electronic Record on Appeal. (Attachments: # 1 Exhibit(s), # 2 Exhibit(s), # 3 Exhibit(s), # 4 Exhibit(s), # 5 Exhibit(s)) (tle) (Entered: 06/11/2018)
06/11/2018 91 SATISFACTION OF JUDGMENT filed by USA re 71 Judgment,,, (Chapman-DOJ, Beverly) (Entered: 06/11/2018)
07/09/2018 92 Unopposed MOTION for Return of Passport filed by Pritesh Patel. (tln) (Entered: 07/09/2018)
07/09/2018 93 ORDER DIRECTING RETURN OF PASSPORT 92 … The Court, having considered Defendant Pritesh Patel’s Unopposed Motion for Return of Passport, FINDS that the motion is well taken and is accordingly GRANTED. (Ordered by Judge John McBryde on 7/9/2018) (wxc) (Entered: 07/09/2018)
07/11/2018 94 (Document restricted to court users only) Receipt for Return of Passport to Phillip Umphres as to Pritesh Patel per Order 93 . (bcr) (Entered: 07/11/2018)
09/19/2018 95 ORDER of USCA No. 18-10302 as to Pritesh Patel re 80 Notice of Appeal. The court has considered the motion of Pritesh Patel to view nonpublic and/or sealed material in the record on appeal. Unless the court granted access to one or more specific documents ONLY, it is ordered, counsel for Pritesh Patel may obtain all ex parte documents filed on behalf of Pritesh Patel, and all other non exparte documents in the record. The non-public and/or sealed materials from the record are for your review ONLY. The integrity of the sealed documents is your responsibility, and if provided in original paper, return to the district court as soon as it has served your purpose. (tle) (Entered: 09/19/2018)
09/20/2018 96 NOTICE OF TRANSFER OF THE 5TH CIRCUIT ORIGINAL RECORD ON APPEAL: Sealed Record on Appeal for USCA5 18-10302 (related to 80 appeal) as to Pritesh Patel: Sealed documents transmitted to F Clinton Broden on per 95 USCA5 Order. (tle) (Entered: 09/20/2018)
11/13/2018 97 ORDER of USCA No. 18-10302 as to Pritesh Patel re 80 Notice of Appeal. The court has considered the motion of United States of America to view non-public and/or sealed material in the record on appeal. Unless the court granted access to one or more specific documents ONLY, it is ordered, counsel for United States of America may obtain all ex parte documents filed on behalf of United States of America, and all other non ex parte documents in the record. The non-public and/or sealed materials from the record are for your review ONLY. The integrity of the sealed documents is your responsibility, and if provided in original paper, return to the district court as soon as it has served your purpose. (tle) (Entered: 11/13/2018)
11/13/2018 98 NOTICE OF TRANSFER OF THE 5TH CIRCUIT ORIGINAL RECORD ON APPEAL: Sealed Record on Appeal for USCA5 18-10302 (related to 80 appeal) as to Pritesh Patel: Sealed documents transmitted to Brian Portugal per 97 USCA Order. (tle) (Entered: 11/13/2018)
11/29/2018 99 ORDER of USCA No. 18-10302 as to Pritesh Patel re 80 Notice of Appeal. The court has granted an extension of time to and including December 20, 2018 for filing appellee’s brief in this case. (tle) (Entered: 11/29/2018)
12/11/2018 100 NOTICE OF TRANSFER OF THE 5TH CIRCUIT ORIGINAL RECORD ON APPEAL: Sealed Exhibits #89-90 Volume(s) or container(s) of trial or hearing original exhibits to Record on Appeal for USCA5 18-10302 (related to 80 appeal) as to Pritesh Patel: Sealed documents transmitted to Brian Portugal per 97 USCA Order. (tle) (Entered: 12/11/2018)
12/13/2018 101 ORDER of USCA No. 18-1302 as to Pritesh Patel re 80 Notice of Appeal. The court has granted an extension of time to and including January 3, 2019 for filing appellee’s brief in this case. (tle) (Entered: 12/13/2018)
01/02/2019 102 ORDER of USCA No. 18-10302 as to Pritesh Patel re 80 Notice of Appeal. The court has granted an extension of time to and including January 10, 2 019 for filing appellee’s brief in this case. No further extensions will be authorized. (tle) (Entered: 01/02/2019)
02/01/2019 103 ORDER of USCA No. 18-10302 as to Pritesh Patel re 80 Notice of Appeal. The court has granted an extension of time to and including February 8, 2019 for filing a reply brief in this case. (tle) (Entered: 02/01/2019)
05/07/2019 104 Public correspondence received as to Pritesh Patel (wxc) (Entered: 05/07/2019)
05/14/2019 105 Public correspondence forwarded from Southern District of Texas as to Pritesh Patel. (edm) (Entered: 05/14/2019)
10/29/2019 106 JUDGMENT/MANDATE of USCA No. 18-10302 as to 80 Notice of Appeal, filed by Pritesh Patel. It is ordered and adjudged that the judgment of the District Court isaffirmed. Issued as mandate: 10/29/19. Pursuant to LR 79.2 and LCrR 55.2, exhibits may be claimed during the 60-day period following final disposition (to do so, follow the procedures found at Exhibit Guide). The clerk will discard exhibits that remain unclaimed after the 60-day period without additional notice. (Clerk to notice any party not electronically noticed.) (tle) (Entered: 10/29/2019)
10/29/2019 107 Opinion of USCA No. 18-10302 in accordance with USCA judgment re 80 Notice of Appeal, filed by Pritesh Patel. We AFFIRM. (tle) (Entered: 10/29/2019)
10/29/2019 108 Received letter from United States Court of Appeals Fifth Circuit re: No. 18-10302. Enclosed is a copy of the judgment issued as the mandate and a copy of the court’s opinion. (tle) (Entered: 10/29/2019)
11/04/2019 109 Return of Government Exhibit 1 to Mark Nichols – USA. No exhibits remain in clerk custody. (EXH-ADM flag removed) Exhibits offered by USA as to Pritesh Patel. (tle) (Entered: 11/04/2019)
11/04/2019 110 Return of Defendant’s Exhibits 1-8 & 10-23 to Phillip C Umphres. No exhibits remain in clerk custody. (EXH-ADM flag removed) Exhibits offered by Pritesh Patel. (tle) (Entered: 11/04/2019)
11/08/2019 111 Acknowledgment of receipt of government’s exhibits 109 filed by USA as to Pritesh Patel. (tle) (Entered: 11/08/2019)
11/18/2019 112 Acknowledgment of receipt of defendant’s exhibits by FPD 110 as to Pritesh Patel. (tle) (Entered: 11/18/2019)
04/25/2022 113 Prob 12B as to Pritesh Patel. (Ordered by Judge Mark Pittman on 4/25/2022) (wxc) (Entered: 04/27/2022)

 


 

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approximately 270 tax returns in 2011, in addition to the 870 returns he filed using his wife’s PTIN that year. The PSR does not state which of the 270 tax returns filed under the other two employees’ names, if any, fraudulently claimed an education credit. This, though, does not show clear error. The district court reasonably estimated that 50 percent of the tax returns Patel filed were fraudulent.

It would therefore be unreasonable to find that all 270 tax returns were not fraudulent. Even if none of the 270 returns he prepared under the others’ names were fraudulent, he still took steps to “obscure the link between the” actual false tax returns and himself by decreasing the total number of prepared tax returns with his PTIN. Clements, 73 F.3d at 1340.

Next, at the sentencing hearing, the agent testified that regardless of which PTIN is used by a tax preparer, a return can be traced back to the tax preparer by using an EFIN. Indeed, the agent traced all the returns filed by Patel via one EFIN registered to him. The agent’s testimony was in the context of explaining how, after the scheme was discovered, he was able to verify the fraudulent returns Patel was responsible for filing. Patel ineffectively relies on the agent’s testimony.

Patel has failed to show that the district court’s finding was clearly erroneous. One circuit has concluded that the “essence of [sophisticated means] is merely deliberate steps taken to make the offense more difficult to detect.” United States v. Kontny, 238 F.3d 815, 821 (4th Cir. 2001). We have upheld sophisticated-means enhancements when defendants have used the names of other people to make it more difficult for their offenses to be detected, even if that method was not by itself particularly sophisticated. E.g., United States v. Conner, 537 F.3d 480, 492 (5th Cir. 2008); United States v. Wright, 496 F.3d 371, 379 (5th Cir. 2007); Clements, 73 F.3d at 1340.

Patel took deliberate steps to make his offense more difficult for the IRS  to detect. He used PTINs of other employees without their knowledge to repare tax returns. This allowed Patel to prepare a larger number of tax returns in 2011 without the IRS knowing that he was the sole preparer.

AFFIRMED.

Fifth Circuit Affirm Lengthy Jail Sentence for “Sophisticated” Tax Fraud Conviction against a Tax Preparer. The Same Cannot Be Said When Banks Commit Fraud. Not One Banker Went to Jail in Texas
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