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On June 20, 2002, a grand jury returned a nine-count
indictment against petitioner including: (a) One count of
conspiracy to defraud the IRS and to structure currency
transactions to evade reporting requirements; (b) five counts of
subscribing a false Federal tax return; and (c) three counts of
structuring a currency transaction to evade reporting
requirements. The grand jury also returned a three-count
indictment against Mrs. Kosinski, including one count of
conspiracy and two counts of structuring currency transactions.
The Government alleged in the indictment that petitioners
withdrew cash amounting to $7,666,500 for the purpose of
concealing Phillips’s payment of taxable wages in cash to his
employees between 1995 and 1999.
A jury found petitioner guilty of seven counts (the
conspiracy count, all of the false tax return counts, and one
structuring count) and not guilty on two of the three structuring
counts. Petitioner was initially sentenced to imprisonment of
two concurrent 30-month sentences and a 2-year and 1-year
concurrent supervised release. The case was appealed to the
United States Court of Appeals for the Sixth Circuit, which
remanded the case for resentencing. Upon resentencing,
petitioner was sentenced to 6 months in a halfway house, 6 months
in home confinement, and 3 years of probation, in addition to
being ordered to pay a $60,000 fine. The United States Court of
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