We have reported before on the rather shocking criminal tax case of a former Tax Court judge. We reported on her indictment in April of last year, her guilty plea in the fall of last year and of the fallout in some of her cases stemming from the criminal matter. The case has moved into the phase in which the judge must sentence former Judge Kroupa for the crime to which she plead guilty. The sentencing phase has moved slower in this case than I would have anticipated; however, it has been many years since I worked regularly on criminal tax cases and my expectation of the tempo may be outdated.
The sentencing phase usually involves a review of the situation and then a write-up of facts and recommendations by a probation officer followed by an opportunity for the defendant and the government to offer comments on a proposed sentence. At the time of the plea, the parties knew that the sentencing guidelines would produce a recommended prison sentence in the range of 30-37 months. Although the guidelines do not bind the judge, the parties know that the guidelines have a significant influence in most cases and certainly serve as a starting point for the judge’s decision. Based on the crime to which she pled guilty and some upward and downward adjustments for knowledge, position and cooperation, the parties knew when they reached the plea agreement where the starting point for sentencing would place this case.
In recent filings with the district court, the defendant and the government have set out their positions. The defendant takes the position that 20 months would be an appropriate sentence under the circumstances. The government argues for the guideline amount of time in prison. Both documents bear reading if you want to gain a better understanding of the process in general. The document filed by former Judge Kroupa lays open her life in a way that you would not want to do unless compelled to do so by the circumstances existing here.
In recent posts, we have talked about privacy of information in a court proceeding. In last Friday’s post concerning designated orders, Samantha Galvin described for us a recent order concerning the privacy of information. In a post earlier this week, I described the efforts of a taxpayer in a refund suit to keep his name out of the public record. In this criminal case where the defendant fights for her freedom with a difference of potentially 17 months (or more because the sentencing judge is not bound by the guidelines or the recommendation of the government) of incarceration hanging in the balance, she does not raise privacy as a concern. The case demonstrates how naked one becomes in a criminal case and how rights of privacy that can cause such concern in a civil case do not apply. Because our blog focuses on civil and not criminal tax matters, we will not delve further into the arguments by the parties. Even for those of us who practice in the civil arena, knowing what happens in the worst case, a criminal indictment, benefits us and our clients as we work to keep them from committing a tax crime.
I read the entire argument from the defendant in favor of a 20 month sentence. In my opinion, it holds no water. Essentially she blames her bipolar disorder for her actions. I’ve had several bipolar clients and it is very common for them to spend wildly and go deeply into debt. However, that is not what happened with Judge Kroupa and her husband. They choose to finance their lifestyle by failing to report income and by grossly inflating business expenses. This was intentional and knowing and took planning by Judge Kroupa.
I have had bipolar clients who, notwithstanding their frequent hospitalizations, manage the debt they get themselves into reasonably well, and who stay within the bounds of the law with all of their financial transactions.
It is disgraceful that white collar crime has such low sentences. The high end here is 3 years in prison. That is for cheating of over $400,000 for 10 years, plus obstruction of the investigation by forging documents. To me, a reasonable sentence would be 3 years for each of the 10 years of false tax returns (why aren’t these treated as distinct crimes, as they would be if it was larceny?) plus 5 years for a lawyer judge forging documents. That would come to 35 years. 3 years is nothing— just another, short, phase of her career. Indeed, she’s lost more of her life than that already in dealing with her alcoholism. And though it’s not a crime, to conceal her mental illness and alcoholism while remaining a judge is disgraceful. She should have resigned and dealt with her problems—it’s not that she and her husband needed the salary. It is certainly possible to live normally and work normally with major depression and manic depression, since medication often eliminates all symptoms, but she seems to be claiming that sometimes she didn’t have proper treatment and the rest of the time even the best treatment wasn’t working for her.