The US Government Accuses Roger Stone of Rat-Fucking the IRS
The US government is suing Roger Stone and his spouse, Nydia, for failure to pay their taxes. The suit gets awfully close to accusing the couple of fraud, which raises questions about why the government didn’t charge them with fraud instead.
This may be an effort to seize their condo which — because they live in Florida — might otherwise be sheltered under Florida’s Constitution.
But since it comes close but stops short of accusing the couple of fraud, I want to unpack precisely what it alleges.
The suit alleges that the Stones, filing jointly, underpaid their taxes from 2007 to 2011, currently owing almost $1.6 million. It also alleges that Stone, filing individually, underpaid his taxes by $400K in 2018. Then, the suit alleges, the Stones took efforts on 2018 and 2019 to shelter their income and, ultimately, their home from the IRS.
The Stones had been on a payment plan with the IRS for the jointly owed taxes (though it sounds like they had gone off and on payment plans in the past).
In 2018 and 2019, they used Drake Ventures, a limited liability corporation that the suit claims in just a legal alibi for the Stones, to pay personal expenses, including groceries, dentist bills, spas, salons, clothing, and restaurant expenses. Effectively, the suit claims, that allowed the Stones to dump funds into their lifestyle while shielding those funds from the IRS. Then, in the wake of Stone’s indictment, the Stones paid a $140K downpayment for a condo out of Drake Ventures, then created a trust, the Bertran Trust, in Nydia’s name to own the house. Literally the day after the Trust was recorded in Broward County, the Stones stopped paying their monthly tax payments to the IRS.
The government is effectively going after Drake Ventures and the house to cover the $2 million in taxes they owe.
The timing of all this is the really interesting bit.
The suit doesn’t say whether the Stones only started to pay their personal expenses out of Drake Ventures funds in 2018, or whether the government only discovered it in that year — when the investigation into Stone and those he paid to help with his rat-fucking really accelerated. The suit does mention that the Stones paid people out of Drake Ventures funds without filing 1099s for them, something that Mueller’s team likely discovered as they tried to sort through what Stone was paying these people for.
The Stones used Drake Ventures to pay Roger Stone’s associates, their relatives, and other entities without providing the required Forms 1099-MISC (Miscellaneous Income) or W-2s (Wage and Tax Statement).
But the suit makes the tie between the effort to shelter their home in the Bertran Trust and Stone’s indictment explicit.
Roger Stone was indicted on January 24, 2019, and the indictment was unsealed on January 25, 2019.
After Roger Stone’s indictment, the Stones created the Bertran Trust and used funds that they owned via their alter ego, Drake Ventures, to purchase the Stone Residence in the name of the Bertran Trust.
[snip]
On March 5, 2019, the Stones established the Bertran Trust.
On March 22, 2019, the Stones purchased the Stone Residence in the name of the Bertran Trust for $525,000. The Stones used the $140,000 they transferred from a Drake Ventures’ Wells Fargo account as a down payment for this purchase. No assets of the Bertran Trust were used to purchase the Stone Residence.
The suit includes the tie between his indictment and their effort to shelter the money as one sign of intentional fraud.
The Stones faced the threat of litigation. Roger Stone had just been indicted;
And the moves to shield their money in advance of defaulting on their repayment plan with the IRS took place even as — per a dodgy claim from Roger Stone — Stone refused to cooperate against Trump, the claim Stone deployed to get first a commutation and then a pardon from Trump to avoid any prison time.
Mind you, the IRS was still working on collecting that money from the Stones. It’s not like Trump made Stone’s tax troubles go away like he did his other legal troubles.
But what’s weird about the seeming tie between Stone’s indictment and the efforts to shelter their funds is that there was never any risk of forfeiture based on the charges Stone actually faced. He was definitely investigated for things that might have included forfeiture (and Drake Ventures paid for Stone’s phone service and some other telecommunications service he used in his 2016 rat-fuckery).
That said, it was a piss poor way to try to cheat the IRS, because the Stones did this at a time when the government was closely scrutinizing Drake Ventures.
He was creating too many of his own cookie jars to stick his hand into.
Very stupidly, too. Bugs the crap out of me this country has been repeatedly ratfucked by a guy who’s high on his own supply and not particularly bright.
I can imagine him chuckling over the name of the venture, Drake => male duck => Stone ducking taxes.
Meanwhile, he assumed no one was going to look very closely at the payments from Team Trump to Stone and whether taxes were paid on the income, in spite of the fact both Manafort and Gates had their financial houses combed through carefully. What arrogant, stupid hubris.
Decades ago I attended a seminar for licensed architects and engineers about protecting personal assets from business problems. One thing they stressed about bankruptcy was that timing mattered; moving assets to a shelter within a certain amount of time before declaring bankruptcy was not effective. They could be seized anyhow. Always assumed this applied to back taxes, too.
In Stone’s case, it looks not just like tax fraud but possible money laundering, perhaps bank fraud depending on real estate financing. We don’t know all his income sources yet, or his/ventures’/trusts’ assets.
I saw it differently. Drake => male duck => Donald
Hmm. Could be, but then we have an entirely new horizon on which to gaze because the first payment in FEC records to Drake Ventures was in 2009.
I took Drake to be a reference to this:
I don’t think it is too much of a stretch (especially if you are Spanish) to say that Privateer Politician Sir Francis was a ratfker before ratfking was a thing.
Oh, believe me, there were rats to fuck back then and it was indeed a thing, way before Sir Frank was around.
LOL It’d be like him to be stupid enough to pick the name of a man who died shitting himself.
Drake sailed right past the Golden Gate in the fog, missing oh, I don’t know, the best sheltered ports on the entire west coast. Settled for landfall at Point Reyes: beautiful by today’s outdoorsy standards, but of minimal value to empire building.
$50,000 from Trump’s election organization to Stone in 4 months. What for? And are they pegged at $10,000 each to avoid some kind of scrutiny from regulators?
I don’t know what runs up the regulators’ flag; recall that Elliot Spitzer got nailed for much smaller payments wrt trafficking. Since it’s a campaign amounts that size aren’t unheard of; the question is whether he paid taxes on them as he was supposed to, or did those payments end up transferred out of his business and into his wife’s trust as a down payment on real estate.
Might also be an issue if the total amount was always intended to become a down payment but it was structured to look like monthly payments for services. ~shrug~
I’m buying popcorn futures, that’s all I’m saying.
I gotta say…
The last few headlines I’ve seen here at Empty Wheel have put a smile back on my face, and a skip in my step…
Yeah, me, too. But calm down, you. Miles to go . . .
Roger Stone. Fraud. Roger Stone committed fraud, says the DOJ.
Hmmm. When Trump — Roger’s Dear Leader — exhorted the bloodthirsty crowd to go down the street to the Capitol, Trump announced that “when you have fraud, you get to play by different rules”. He made it clear to his mob that his accusation of “fraud” wasn’t subject to being proven in a court using actual evidence or facts; no, Trump’s premise was that because he thought there was fraud, it was OK for him to tell his acolytes to take matters into their own hands and little things like “proof” or “admissible evidence” were not a prerequisite for choosing your own “remedy” and administering it. And that, my friends, included smearing your own feces on the walls of the Capitol while assaulting American police while trying to find and assassinate American elected representatives assembled to do their sworn duty under the U.S. Constitution.
I digress because that whole thing sounds like a teaching moment right about now. What say that the DOJ and the Judge arraign Stone on these charges of blatant, run-of-the-mill, financial deadass fraud — then, because Trump and Stone both agree that when someone says it’s “fraud” we get to play by “different rules”, the Judge remands Stone into custody pending trial and, well we’re kinda busy, sets the trial date for sometime in 2048? Bye, Roger, sure you’ll agree this is what Trump says is OK. It’s less destructive than your own application of that principle, for sure.
Lock this guy up, and get to the part where we lock Trump up too.
“And that, my friends, included smearing your own feces on the walls of the Capitol while assaulting American police while trying to find and assassinate American elected representatives assembled to do their sworn duty under the U.S. Constitution.”
________________________
Honestly… in your wildest moments of imagination, did you ever think you’d find yourself writing a line like that one day, that it would simply be the bare-faced, light-of-day truth, and that the people who did this would be convinced that THEY, and they alone, are the true American patriots?
Simply astonishing, no?
Yes, indeed.
I’d much rather see him prosecuted sooner. But, realistically, I think this will drag on awhile yet.
I’m really looking forward to seeing the other shoe drop, though. Stone has a lot more to worry about than this IRS trouble.
Yes, he does. Can he hear the children of the night? Or in the GRU’s case, as the Novichok underpants gambit has failed several times now, the late afternoon .22 caliber “pizza delivery.” Cause I am positive he changes his silk boxers (or are they g-strings?) at least six times per day
This is how Al Capone was taken down, and it may well be Mr.Stone’s ruin as well. And the IRS has that long-delayed case against Mr. Trump that could result in his owing $100,000,000 to the government.
I do hope that the IRS gets a financial boost from the next big spending bill. There are lots of cheats among the ruling class, and this is the way to both get more government revenue and take them down several pegs.
Does the timing of this suggest that the government could use the potential forfeiture of Stone’s house by the IRS as leverage to testify against Trump ?
Wouldn’t it be cute if Bertran wrote off the cost of the house? Now you got fraud.
Neither Stone nor Manafort seems likely ever to flip on Trump or the movement for which he is an avatar.
I wouldn’t be so sure about Stone. He successfully demanded that he not spend a day in prison from Trump. Without that guarantee I think he might flip.
I agree as to Stone, but wonder about Manafort. If Trump and the WH told Manafort that his pardon was enough to cover everything, and now he finds other that it only covered everything he had been charged with at the time (and thus exposing him to charges now being pursued/filed), he might not be terribly happy with being misled.
leave no Stone unflipped!
a rolled Stone’s maw’s gathering nothing.
Wait, what? Now you’ve done it, punaise. That line is clearly the malformed child of Syrus and Faulkner, and should never have been born
Too Rolling Stoned
Just rolls off the tongue, doesn’t it? :-)
@ Mar-a-Lago
…a complete unknown.
Poor guy.
The DOJ suit is a civil suit, seeking to reduce the IRS tax debt owed by Roger Stone and his wife (about $2 million covering the years 2007-2011 and 2018) to judgment and to set aside the transfers of certain properties to trust entities. As it is not a criminal case (and is only about the money), it seems implausible that the government will seek to “flip” Stone.
In a suit to reduce taxes to judgment, the government does not have to prove that Stone lived a lavish lifestyle or did anything wrong – merely that tax was owed and remained unpaid. If successful, the DOJ/IRS will have 20 years from the judgment to collect the IRS tax debt.
The IRS ability to administratively collect tax debt ordinarily expires after 10 years, although numerous things that taxpayers do can extend that period. Getting a judgment significantly extends that period. The IRS does not bother to seek judgments from most taxpayers, and the 10 year collection period is allowed to expire. However, every year, the IRS refers hundreds of cases – usually those involving recalcitrant taxpayers who hide income or assets – to the DOJ Tax Division for judgment collection action.
Also, civil suits have this thing called “discovery” …
Given the probable lack of any defense on the merits, my guess is that Stone will attempt to use discovery to determine the extent of any political motivation on the part of the IRS in recommending the suit (the vast majority of taxpayers who owe money are not referred to the DOJ for collection suit) or the DOJ in pursuing it.
I would add that this suit would be a very poor vehicle for an attempt to flip Stone. Any concession the government made (reducing or eliminating the tax obligation) would look like a direct payment for testimony.
Heh, “political motivation” would appear to be specious unless they are manufacturing the amount owed, and, if they were, why has Stone never contested it? That’s going nowhere.
Agreed. Given the predeliction of those in Trump’s orbit to claim that there is a Deep State conspiracy against them, I am just guessing about what might happen in the litigation.
Long….inner smile…..karma seems so sweet sometimes….
Reminded of a quote from the Qur’an;
…” But they scheme, and Allah schemes. And Allah is the best of schemers.”
To quote Ralphie Wiggum, from the Simpsons…
“Ah schadenfreude…
Sweet, sweet schadenfreude…”
Alright, to the tune of “Sweet Caroline”
Hit it,
Sweet schadenfreude…
“Mann Tracht, Un Gott Lacht” is an old Yiddish adage meaning, “Man Plans, and God Laughs.”
Yes, yes, so true
…..and it’s really great that we’re able to capture a glimpse of the Universe’s humor at times. What is it Baha’i’s say?
……God loves laughter?
Oh! Look at THIS!
About Senator Mazie HIRONO, and her book “HEART OF FIRE“, by Rebecca TRAISTER
She was on Colbert earlier “tonight”. If you missed it they will likely re-run it in the next few weeks.
Meanwhile in Tampa:
Kate 🤍: “Shoot!!! We just missed “An evening with Roger Stone and friends” which is the VIP upgrade at “Trumparilla” for only $124.95. 🤡 [screenshots]”
https://twitter.com/ImSpeaking13/status/1383295261015904259
1:44 AM · Apr 17, 2021
PatriotTakes 🇺🇸: “This was just moments ago at Roger Stone’s Trumparilla thing in Florida. [video with really dumb narration by some "anchorpeople"]”
https://twitter.com/patriottakes/status/1383438523798147076
11:13 AM · Apr 17, 2021
Welp, it’s a weekend-long event, there’s always tomorrow:
Zachary Petrizzo: “A rather drab day in Tampa where the pro-Trump boat parade “Trumparilla” happened this morning. Roger Stone claimed he would parachute into the event but instead pulled a no-show. [photos; drabness]”
https://twitter.com/ZTPetrizzo/status/1383477164725526532
1:47 PM · Apr 17, 2021
This, too, though:
Ron Filipkowski: “I’m watching lots of plastic bead necklaces getting thrown in the water to kill Tampa Bay marine life at the Trumparilla boat parade while I look for a storm to blow in. Sponsored by MyPillow with lots of QAnon symbols. [video; the “anchorpeople” are asking for donations @ outset]
https://twitter.com/RonFilipkowski/status/1383458332384452620
12:32 PM · Apr 17, 2021
No jury trial at tax court, right?
The government filed its case in the federal district court for the Southern District of Florida. Suits to reduce an assessment against a taxpayer to judgment have to be filed in federal district court. Technically, it may be possible to request a jury on at least a portion of the claims (those that are not seeking equitable relief), but I would expect that this core issue (whether there is an unpaid tax) will be resolved on summary judgment, especially since Stone has not denied owing the tax.
Among other things, the Tax Court provides a forum for people who disagree with the IRS auditors about how much tax they owe. Before the government can assess and collect the additional tax asserted to be due, it ordinarily has to give the taxpayer the right to contest this determination by filing a petition with the Tax Court. The taxes in the Stones’ case have already been assessed.
You are correct that cases in the Tax Court are tried solely before a judge. Despite its name, the Tax Court does not handle all things tax-related. For example, taxpayer refund claims ordinarily must be litigated in either the federal district court or the Court of Federal Claims.
Usually, the IRS goes back only 10 years, according to what I’ve read. Why are they going back to 2007? Did the 2011 returns indicate a pattern of under-reporting that opened up that extension?
The IRS generally has only three years from the filing of the tax return in which to make an assessment. This time limitation can be extended in a variety of circumstances. For example, in the case of a fraudulent return, there is no statute of limitations.
After an assessment is made – which might be years after the tax return is filed if the taxpayer contests the amount of an additional assessment – the IRS has 10 years to collect using its administrative powers (tax liens, levies on bank accounts, etc.). If the tax remains unpaid, the IRS has the option of requesting that the DOJ file a suit to reduce the tax assessment to judgment. (The vast majority of collection cases are allowed to expire at the end of the 10 year period, but the DOJ files hundreds of collection actions every year, usually in cases where the IRS believes that there has not been sufficient cooperation or the taxpayer retains significant assets.) If the government obtains a judgment, the IRS and the DOJ have an additional 20 years to collect on the judgment.
Given the persistence of these issues, I have two pet peeves about their coverage:
1) Dispense with the coinage, “active shooter.” It creates a status crime that separates the person from their conduct. It’s also redundant. An inactive shooter might be a threat, but would not be a shooter.
2) Stop saying, “officer-involved” shooting. If someone did something worth reporting, say what it was and who did it. If an officer allegedly shot and killed a 13-year-old boy, say that.
“Active shooter” has always bugged the heck out of me for exactly that reason. More military garbage that has infected civilian police and reportage thereof. And yes as to the second one too, but active just makes me cringe.
Me too. That phrase sends me up the wall – for reasons all of the above. An inactive shooter is an oxymoron – which renders the term “active” with “shooter” redundant.
When a demonstrated liar, guilty of repeated bad faith, claims to do or not do something, a reporter should qualify it. Do Not create the false impression that what they say is true or a fact. Say they claim it, use a truth sandwich, something.
What are the odds, for example, that Marjorie Taylor Greene really rejects her American First Caucus, for which she is an avatar? Compare them to the odds that she is saying so to cover her ass until she can attack from a different angle?
As with Trump, repeating what such bad-faith actors say without qualification promotes their purposes, which are uniformly harmful.
Exhibit A is this absurd headlines from salon.com –
Marjorie Taylor Greene forced to abandon America First Caucus after Republican Outrage
At least two things about it are outrageous, not including MTG’s behavior. One, the evidence for abandment is as thin as it is for Donald Trump ever having been sorry for anything. Two, the outrage that forced MTG to rethink her approach – not her goals – was not Republican, it was national.
Republicans, including the newly centrist Liz Cheney and the opportunistic Kevin McCarthy, just hopped onto the bandwagon. That MTG and the AFC will re-emerge is as probable as that Donald Trump will have problems with the IRS.
https://www.salon.com/2021/04/17/marjorie-taylor-greene-forced-to-abandon-america-first-caucus-after-republican-outrage/
Sounds like the IRS is Rolling the Stones … or at least stopping the Stones from rolling them.