Federal judge declines to stop IRS seizure of funds in tax scheme case
Senior U.S. District Judge Philip Pro called it a case of "buyer's remorse" on the part of convicted tax schemer Gaetano Fiore.
In a written order Wednesday, Pro refused to stop the Internal Revenue Service from trying to seize $99,316 Fiore had placed in the client trust fund of his lawyer, Michael Gowdey, as part of a restitution promise in the case.
At Fiore's sentencing June 20, Gowdey told Pro that he came prepared to hand over a $99,316 check to the IRS if the judge showed leniency toward his client.
Gowdey asked Pro to sentence Fiore, a 52-year-old Canadian citizen who prosecutors allege has ties to an anti-tax group, to the 15 months he spent behind bars after his arrest in an $850,000 fraudulent tax scheme.
Pro declined the offer and instead handed out a 30-month prison term with the order for $99,316 in restitution sought by the government.
Gowdey ended up not turning over the restitution check to the IRS, but two weeks later the IRS filed notice it intended to take possession of the $99,316.
That prompted Gowdey to ask Pro to allow him to return the money to its "rightful owner," Fiore's 87-year-old father, who had mortgaged his longtime Montreal home to come up with the cash.
Gowdey argued that the elder Fiore had agreed to lend the money only if his son got credit for time served and paid it back within 60 days.
The father now is unable to make the $800 monthly mortgage on his modest government pension, Gowdey wrote.
Federal prosecutors opposed Gowdey's effort.
And on Wednesday, Pro sided with the government, finding there was no basis to return the borrowed money to Fiore or "anyone else."
That ended the fight.
"We respect the court's decision," Gowdey said. "We'll comply with the order. We've got no choice."
Fiore pleaded guilty in January to two counts of receipt of stolen public money.
He admitted in his plea agreement that he helped two people with Canadian addresses fraudulently obtain tax refund checks totaling more than $850,000. He also admitted filing a fraudulent 2006 tax return seeking a $99,316 refund.
Contact Jeff German at jgerman@reviewjournal.com or 702-380-8135.
