Canadian Orange County Resident on Lamb for 5 Years Extradited From Germany

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Canadian Orange County Resident on Lamb for 5 Years Extradited From Germany

The IRS issued a press release earlier this month about the sentencing of Donald Baxi, a former Orange County resident with Canadian citizenship.  Interestingly, he had fled the United States shortly after he was indicted about 5 years ago on tax charges.  He was sentenced to one-year and a day (which, notably, is better than just 365 days because the sentence in excess of a year bestows additional rights on the individual – potentially 54 days credit for “good time” served).  According to the press release:

Baxi pleaded guilty in March to one count of aiding and abetting in the preparation of a false income tax return. According to the plea agreement filed in the case, Baxi was responsible for having the partnership income tax returns of Vintages Wine Bar, LLC (“VWB”), prepared and filed with the Internal Revenue Service. For each of the years 2003, 2004, and 2005, Baxi deliberately provided false and incomplete information to his tax return preparer so that VWB’s interest income would not be reported to the IRS. During these years however, VWB received interest income from two separate sources totaling $201,142. This unreported interest income caused a tax loss to the government of $56,319. In November 2010, a federal grand jury indicted Baxi on six counts of aiding and assisting in the preparation of false income tax returns. Upon learning of those charges, Baxi fled the United States. Five years after being indicted by a federal grand jury on tax charges, Baxi was arrested by German authorities and extradited back to the United States to face the charges contained in the indictment.

As a Former prosecutor, I am familiar with the extradition process.  It does require some additional paperwork, as I recall, something called a “red” notice was the first step.  This essentially alerted Interpol (Yes, that’s a real thing not just a Hollywood conceit!)  to the fact that someone was charged and to hold the person if they came through Customs.  Once the person was held, the prosecutor would get notice and have a very short time to get the necessary information to the responding country.  The European countries, like Germany (which is a country I provided some assistance to once as well as a prosecutor) were generally understood to be favorable places for extradition.  Though, in many countries, this was also an easier process if the person was not a citizen of the holding country.

In this case, it is notable that the defendant received a sentence that is within the guideline range, irrespective of having fled.  This would have been a good case to see the inner workings of the sentencing hearing to hear the judge’s reasoning – as well as the defense counsel’s arguments.

Daniel W. Layton, the author of this post, is a former Federal prosecutor and former IRS attorney.  He is the principal attorney in Tax Attorney OC.

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