Evasion of Excise Taxes—Lion Boulos

On June 30, 1994, Lion Boulos, also known as Adolphe Moussa, was convicted by a jury on conspiracy and evasion of excise taxes charges.^[1] The charges related to a conspiracy to avoid paying federal excise taxes on the sale of diesel fuel. Shortly after being convicted, Mr. Boulos fled the country and lived in Lebanon for 10 years; he returned to the United States in 2005 voluntarily.^[2] He has been sentenced to 87 months in prison, and fined $125,000.^[3]

His co-conspirator was Pierre Tanios, also known as Pierre Torres, was convicted by the same jury, and was sentenced to 24 months in prison and a $6,000 fine.^[4] He appealed his conviction but lost.^[5]

According to the Fifth Circuit Court of Appeals, the two men were indicted after Mr. Boulos formed Moussco Investment, Inc, “which operated as a wholesale distributor of diesel fuel, purchasing from a supplier and reselling to retail outlets.”^[6] In that time period, “payment of the excise tax was the responsibility of the wholesale distributors like Moussco, with tax liability attaching upon sale to a retailer. Moussco’s tax accountability exceeded $250,000.”^[7] Mr. Tanios was the owner of several of the retail outlets serving as Moussco’s customers, and the two men had a long-standing personal and business relationship.^[8] The jury found Mr. Boulos guilty on all counts but, initially, it could not agree on a verdict for Mr. Tanios, notifying the court in writing that “it had reached an impasse with ten voting to convict and two voting to acquit,” a fact which was not disclosed to the parties.^[9] After further deliberations, the jury found Mr. Tanios guilty of the conspiracy charge.^[10]

His appeal in 1996 serves to highlight some of the non-procedural or –evidentiary arguments that are often made after being convicted.

Mr. Tanios first argued that “as a matter of law the evidence is insufficient to sustain his conviction.”^[11] The court analyzed that argument by reviewing the record under the miscarriage of justice rubric, “examining to see if there is evidence indicative of Tanios’ guilt.”^[12] To convict a person on a conspiracy to evade federal excise taxes, the government had to prove that the two men “agreed to evade federal excise taxes and committed at least one overt act in furtherance of their agreement.”^[13] Tax evasion requires proof of a tax deficiency, willfulness, and an affirmative act which constitutes evasion or attempted evasion of the tax.^[14] Since Moussco was obligated to pay the excise taxes, and Tanios was “fully aware that Moussco was a dummy corporation” designed for the evasion of paying excise taxes, the Court of Appeals “entertain[ed] no doubt” that there was a sufficient basis to sustain his conviction.^[15]

The other important matter on appeal was the sufficiency of the modified “Allen charge” given to the jury when it told the judge they were deadlocked. An Allen Charge “is a supplemental jury instruction that advises deadlocked jurors to reconsider their positions. Supplemental jury instructions are permissible so long as they are not coercive. Jury coercion is determined by (1) the content of the instruction, (2) the length of the deliberation after the instruction, (3) the total length of deliberations, and (4) and indicia in the record of coercion.”^[16] It takes its name from the 1896 US Supreme Court case Allen v. United States.^[17]

In Mr. Tanios’s case, he wanted certain language to remain in the pattern Allen charge, the omission of which, he contended, “amounted to a tacit coercion of the instant jury to return a verdict of guilty.”^[18] The court acknowledged that “[d]eviations from the pattern Allen instruction must be done with care and prudence,” but the standard of review is “for prejudice, giving due consideration to the coercive potential in all relevant circumstances surrounding the giving of this special charge.”^[19] Because the jury violated the judge’s instructions when it told the judge how the deadlocked vote was split (10-2), the omitted text was removed because it “conceivably could have prejudiced Tanios as much or more than it might have helped him.”^[20] Therefore, the language was removed, and the Court of Appeals held that it did not lead to coercion of the jury to return a verdict of guilty.^[21]

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[1] US Attorneys Office, Long Time Fugitive Sentenced to Federal Prison for Conspiring to Evade Diesel Fuel Excise Tax, Feb. 6, 2006.
[2] Id.
[3] Id.
[4] Id.
[5] Id. See also United States v. Tanios, 82 F.3d 98 (5th Cir. 1996).
[6] Tanios, supra note 5, at 99.
[7] Id. at 99-100.
[8] Id. at 100.
[9] Id.
[10] Id.
[11] Id.
[12] Id.
[13] Id.
[14] Id. at n. 6.
[15] Id. at 100.
[16] United States v. Evans, 431 F.3d 342, 347 (8th Cir. 2005).
[17] 164 U.S. 492 (1896).
[18] Tanios at 102.
[19] Id.
[20] Id.
[21] Id.