The 9th U.S. Circuit Court of Appeals has upheld the tax convictions of former medical consultant Howard Awand and his wife, Linda.
Prosecutors consider Awand, 67, the central figure in a network of lawyers and physicians that might have defrauded clients out of millions of dollars.
Awand and his wife were convicted in January 2010 of willfully failing to pay $2.5 million in income taxes. U.S. District Judge Kent Dawson later sentenced Awand to four years in prison and his 63-year-old wife to three years behind bars. Both are in federal custody.
In its four-page ruling, a three-judge appeals panel said the government did not arbitrarily enforce the tax laws against the Awands, as the couple had argued.
“The sentence does not create a debtor’s prison,” the panel added. “The Awands were convicted and sentenced due to their willful failure to pay taxes on time, not for merely lacking the funds to pay their taxes at the time they were due.”
Awand’s Los Angeles lawyer, Harland Braun, said the panel did not address the key issue in the couple’s appeal, and he planned to ask the court to rehear the matter.
“Howard knew he had to pay his taxes on time,” Braun said. “He thought that was a civil obligation, not a criminal obligation. The Court of Appeals just ducked the issue.”
In its ruling, however, the appeals panel said: “It is not an essential element of the crime that a defendant know his actions can result in criminal sanctions.”
In August, U.S. District Judge James Mahan held Awand in contempt for the second time in eight months for refusing to testify before a federal grand jury investigating fraud within the legal and medical professions.
Federal prosecutors want Awand to provide testimony about lawyers targeted in the investigation.
The contempt order adds more time behind bars for Awand, who is set to be released from federal prison in February 2014.
Mahan ordered Awand to serve up to 16 months — for the duration of the grand jury — before he can resume serving his other prison sentence. If Awand decides to cooperate with prosecutors, the civil contempt order will be lifted.
Also, Awand was sentenced in June 2010 to four months behind bars after a conviction stemming from irregularities prosecutors uncovered in a medical malpractice case.
Contact Jeff German at firstname.lastname@example.org or 702-380-8135.