II. METHODOLOGY

• The methodology for calculating the Tax Division's drug budget resources is based on actual workyears dedicated to drug-related cases. It also includes a prorated share of the mandatory increases/adjustments to its base budget attributable to the Tax Division's Criminal Prosecution program.

III. PROGRAM SUMMARY

• The Tax Division supports Goal 5 of the National Drug Control Strategy by enhancing programs that reduce domestic drug production and availability, and continue to target for investigation and prosecution those who illegally manufacture or distribute drugs.



• Attorneys in the Tax Division's four Criminal Enforcement Sections investigate and prosecute individuals, corporations, nonprofit organizations, and other taxpayers that attempt to commit tax evasion, willfully fail to file tax returns, file false tax returns, and otherwise intentionally attempt to evade their obligations under the Federal tax laws. The Tax Division investigates and prosecutes tax violations occurring in the context of criminal conduct such as financial institution fraud, narcotics trafficking, bankruptcy fraud, and domestic and international tax conspiracies.



• The Tax Division relies on the Internal Revenue Code to prosecute narcotics traffickers. In some instances, tax violations related to narcotics enterprises are easier to prove than the underlying drug offenses. In other cases, tax charges complement the evidence of the narcotics crimes. Tax Division Criminal Enforcement attorneys serve as the liaisons to the Internal Revenue Service, the United States Attorneys' offices, and the OCDETF program.

IV. BUDGET SUMMARY

1997 Base Program

• The Tax Division's FY 1997 base program is $0.3 million, 3 positions, and 3 FTEs in drug- related resources for the Division's Criminal Tax Enforcement program. The Tax Division anticipates receiving $1.2 million in reimbursable funding to support 14 positions and 12 FTEs for its OCDETF activities.

1998 Request

• The Tax Division's FY 1998 request for its Criminal Tax Enforcement drug-related program is $0.3 million, 3 positions and 3 FTEs, the same program level as FY 1997.



• The Tax Division is also requesting $1.3 million in reimbursable funding to support 14 positions and 12 FTES for its OCDETF activities.

V. PROGRAM STATISTICS

	1996 Actual	1997 Estimate	1998 Projected
Case Receipts:
Complex Cases (non-OCDETF)	49	49	49
Complex Cases (OCDETF)	85	85	85
Total	134	134	134
Grand Jury Investigations (non-OCDETF)	53	53	53
Grand Jury Investigations (OCDETF)	12	12	12
Total	65	65	65
Case Closings:
Complex Cases (non-OCDETF)	23	23	23
Complex Cases (OCDETF)	35	35	35
Total	58	58	58
Grand Jury Investigations (non-OCDETF)	57	57	57
Grand Jury Investigations (OCDETF)	15	15	15
Total	72	72	72

VI. PROGRAM ACCOMPLISHMENTS

• Tax Division Criminal Enforcement attorneys are responsible for investigating, authorizing, and prosecuting criminal tax cases involving narcotics trafficking. Several illustrations follow:



• United States v. Robbins, et al. (S.D. Fla). In December 1995, Harvey Robbins, a prominent South Florida criminal defense attorney was sentenced to 51 months in prison and fined $50,000 for conspiring with large-scale narcotics traffickers to impair and impede the IRS in ascertaining the source, nature, and amount of the drug dealers' income. Robbins' codefendant, Emanuel B. Elfenbein, an accountant, was sentenced to 36 months in prison and also fined $50,000. The evidence at trial showed that from 1981 until 1988, the defendants used complex money laundering schemes to assist narcotics traffickers in hiding their drug profits and that their co-conspirators had ties to such cocaine cartel leaders as Pablo Escobar and Carlos Lehder. Specifically, Robbins and Elfenbein established sham corporations and "front" businesses to assist in the concealment of the illegally earned income, instructed employees of the drug traffickers about how to falsify business invoices and receipts so that they would not draw attention by the Government, and prepared false income tax returns for the narcotics dealers and their businesses.



• United States v. Dethlefs, et al. (D. Me.). In September 1996, Gary Dethlefs and four co- defendants were sentenced to prison after pleading guilty to charges in connection with two conspiracies: a drug conspiracy and a Klein conspiracy to impair and impede the IRS in the ascertainment, computation, assessment, and collection of income taxes. The drug conspiracy, led by Gary T. Dethlefs and Rebecca White, operated out of Mansfield, Massachusetts, between 1986 and 1994. The conspirators imported large quantities of marijuana into Massachusetts from Mexico using suppliers located in Arizona, Texas, and Florida. They sold the marijuana to distributors and customers in Massachusetts, Vermont, Rhode Island, and Maine. Dethlefs was sentenced to prison for 14 years and seven months for possession with intent to distribute more than 1,000 grams of marijuana. He was given a concurrent five year sentence for conspiring to defraud the United States. The other co-defendants sentenced with Dethlefs received lesser prison sentences in connection with both charges. White was sentenced in October 1996 to a 10 year prison sentence for the drug distribution conspiracy charge and also received a five-year concurrent sentence for defrauding the United States.



• United States v. Castor Quintares Gonzales, et al. (S.D. Fla.). In February 1996, a grand jury returned a 19-count indictment against Castor Gonzales (a/k/a "El Ronco") and others in this OCDETF investigation, charging him with engaging in a continuing criminal enterprise, conspiracy to import and distribute cocaine and marijuana, money laundering, and obstruction of justice. The Government is also seeking approximately $287 million in criminal forfeitures. The indictment alleges that Gonzales is one of the leaders of a major narcotics distribution organization in Fort Lauderdale, Florida, that imported approximately 11 tons of cocaine and 100 tons of marijuana into the United States from 1979 through 1993 from the Bahamas and South America. The charges lodged against Gonzales carry a maximum sentence of five life terms plus five years in prison and fines of $18 million. Trial is scheduled to begin in January 1997.