Posted by Carlos R. Rodriguez.

The article “Ex-U.S. Tax Court Judge, Husband Indicted in Tax Case” written by The Associated Press mainly discusses the topic of how a former U.S. Tax Court Judge, Diane Kroupa and her husband, Robert Fackler have been charged with conspiracy to defraud the United States, tax evasion, making and subscribing false tax returns and obstruction of an IRS audit, U.S. Attorney Andrew Luger announced. The charges were brought in Minnesota and allege that the couple conspired to evade at least 400,000 dollars in federal taxes. In a statement, U.S. Attorney Andrew Luger stated that “Tax laws apply to everyone, and those of us appointed to federal positions must hold ourselves to an even higher standard.”

Diane Kroupa was served as a tax court judge by then-president George W. Bush in 2003 and retired in 2014. The charges brought on her and her husband allege that between 2004 and 2010, the couple understated their taxable income by about $1 million and they owe at least $400,000 in taxes. Also, federal prosecutors accuse Kroupa and Fackler of fraudulently deducting at least $500,000 of personal expenses they listed as expenses at Fackler’s consulting firm, and another $450,000 in purported business costs for which clients had reimbursed Fackler, the Star Tribune reported. Kroupa also failed to report about $44,520 that she received from the sale of land in 2010 in South Dakota instead of claiming it as an unrelated inheritance which was stated in the court documents.

In my opinion, as a Tax Court judge, Diane Kroupa should be held to a higher standard of ethics. Also, any tax cases for which she was present should be investigated because Diane’s judgment is clearly out of line if she is found guilty for these charges. Given her comprehensive understanding of tax laws, it should be obvious to her that reporting personal expenses as business expenses is a way to defraud the IRS and it was done intentionally in order to evade taxes. Going forward, a solution to an issue of this nature should be that government officials should be checked for things like tax evasion more often because if their moral judgment is incorrect, their decisions can be detrimental to the country as a whole.

Carlos is a graduate accounting student with a certificate in forensic accounting at the Feliciano School of Business, Montclair State University, Class of 2017.

Posted by Michael Cappelluti.

It is no surprise that our society is on the brink of a technological revolution. It is projected that “65% of elementary school students will hold jobs that do not exist yet when they enter the workforce” (Frank Diana). By 2029, Ray Kurzweil predicts we will have technology that will allow us to live forever. While these technologies may benefit us, our society will be forced to react to these changes. Ethics and law will be crucial in making these reactions a reality. A more pressing issue, though, is the introduction of autonomous vehicles on the road. The article, “Law & the Problem of Autonomous Cars” by Nicholas Stringfellow, offers a legal perspective on the implications of this new technology.

Autonomous vehicles will disrupt many aspects of law, but the article starts off by discussing statutory law. Stringfellow believes that the state and federal levels of government will have to create a body of law about self driving cars—specifically about what happens when the “autopilot system” fails and the passengers are forced to disengage the autopilot and take control. Four states currently have a statutory law for autonomous vehicles, but they differ in some ways. Some states require a person to sit in the driver’s seat in case something were to go wrong, whereas some are more lax about an “emergency driver.” A huge ethical issue will be whether the car is programmed to defend the passengers at all cost, or, from a utilitarian standpoint, make whatever decision will save the most lives in the scenario.

The article also goes on to discuss Tort law, specifically, products liability law. “Injured persons could bring manufacturing defect, design defect, failure to warn, or breach of warranty claims [to a court]” in the instance of an accident (Stringfellow). Courts will be forced to respond by “adopting a negligence standard, a strict liability standard, or by refusing to impose liability on carmakers.” Essentially, if a car is programmed to protect the most amount of lives in a situation—what happens? For example, if a car spins out of control onto the sidewalk to avoid a fatal accident pile-up on the road ahead, will the pedestrians killed by the disoriented car be able to file a law suit? These questions are unknown, at this point. This topic will be heavily discussed by futurists, ethical analysists, and lawyers in the near future—and this will pave way to the future of how we transport ourselves as human beings.

Michael is a marketing and management major at the Stillman School of Business, Seton Hall University, Class of 2019.

Posted by Brennan Smith.

A judge, a deputy constable, and a supervisor of all police, fire, and emergency operations walk into a bar…

Although a common play on the setup of a hysterical joke, the indictment of John I. Waltman, Robert P. Hoopes, and Bernard T. Rafferty is not something the members of Bucks County and Lower Southampton Township are laughing about. The three men named are the judge, supervisor, and deputy constable—respectively—referenced above, who just got indicted for money laundering.

Here’s what happened: “The trio conspired to launder about $400,000 in funds represented by investigators to be the proceeds of health care fraud, illegal drug trafficking and bank fraud, according to a federal court indictment unsealed Friday morning, a statement from the U.S. Attorney’s Office said. The men allegedly took laundering fees of $80,000,” (theintell.com). In order to launder the money, the trio went through a series of processes. One source of revenue, and by far the most prominent one, was through Raff’s Consulting LLC—a company with which Rafferty had full control—with which the three used “bogus documents” in order to turn a profit.

To understand how they did this, the facts of the case must be examined. Per the research done by theintell.com, Robert P. Hoopes would arrive to an office building in an unmarked Lower Southampton Township Police car, exchange the false documents for $100,000 cash, and bring the money back to the car (where John I. Waltman and Bernard T. Rafferty would be waiting). From there, Waltman and Rafferty would go to the Philadelphia Credit Union to deposit the money—after paying Hoopes and pocketing their own cuts—into the Raff’s Consulting LLC accounts. The operation lasted from June 2015 to November of 2016 with the trio laundering $400,000 between June and August of 2016—earning $80,000 in laundering fees (Philadelphia.cbslocal.com).

Because of their crimes, the FBI was forced to get involved and finally caught them in an undercover sting. The three will each face one count of conspiracy to commit money laundering, and three counts of money laundering. District Judge John I. Waltman has been suspended without pay, with the other two removed from their positions.

Brennan is a sports management and marketing major at the Stillman School of Business, Seton Hall University, Class of 2019.

Sources:

http://www.theintell.com/news/crime/bucks-county-district-judge-constable-lower-southampton-public-safety-director/article_f23e17b6-f07a-5e1b-8abb-6edf11a47ecc.html

(Article)

http://philadelphia.cbslocal.com/2016/12/16/authorities-judge-director-of-public-safety-deputy-constable-charged-with-conspiracy-money-laundering/

(Article)

In class, we discuss the Fourth Amendment as it pertains to a variety of searches and seizures by government actors. Even though the New Jersey analog is practically identical to the federal Fourth Amendment, the New Jersey Supreme Court has interpreted more protections for privacy than the United States Supreme Court has under the federal amendment.

In a recent case, the New Jersey Supreme Court overturned a prior 2009 decision requiring police officers conducting an automobile search to have probable cause and exigent circumstances, such as time constraints and safety concerns, and obtain a warrant from a judge prior to the search. The court held  officers now merely have to have probable cause to conduct the search–a retreat to the federal standard.

From time to time, courts will break with stare decisis when circumstances permit. The decision in this case, however, drew criticism from two of the Justices and the defense bar. Justice LaVecchia wrote in her dissent, “‘One can only wonder why the State and the majority of this Court find it appropriate to turn from the progressive approach historically taken in this State to privacy and constitutional rights of motorists.’”

But the court held the old standard was “unworkable.” Police were required to get a telephonic warrant in these circumstances; yet, many of them resorted to merely getting the owner of the vehicle to sign a “consent form” for the search instead of calling a judge.

Justice Barry T. Albin, writing for the majority held the standard applied in the 2009 decision “does not provide greater liberty or security to New Jersey’s citizens and has placed on law enforcement unrealistic and impracticable burdens.” The court found that the 2009 standard had the “unintended consequence” of causing an “‘exponential increase in police-induced consent automobile searches,’” suggesting officers may be pressuring drivers to volunteer for searches instead of taking the time to obtain a warrant.

“‘The heavy reliance on consent searches is of great concern given the historical abuses associated with such searches and the potential for future abuses,’” Justice Albin wrote.

Posted by Danielle Lindsay Feoranzo.

It was on June 4^th 2015 that the U.S Supreme Court found the State of Maryland’s system of personal income taxation violated the nondiscrimination prong of the Dormant Commerce Clause. This clause states Congress has been given power over interstate commerce, and that states cannot discriminate against interstate commerce, nor can they unduly burden interstate commerce, even in the absence of federal legislation regulating the activity. The Court found that Maryland did not grant a resident credit for county income tax paid on income earned and taxed in another state. What to keep in mind is this particular state’s personal income tax scheme is of composed of three elements:

(1) A state tax imposed on all income of Maryland residents and the income of nonresidents from sources within Maryland, (2) a county tax (collected by the state) imposed on all income of state residents, and (3) a special nonresident state tax imposed on the income of nonresidents from sources within Maryland, which tax is said to be in lieu of the county tax and is imposed at a rate equal to the highest county tax within the state (pg. 1; Bright, Schulder, Upham).

In this instance, the Wynnes were state residents and subject to tax in 39 other states because they owned a corporation that resides in multiple states. The Wynnes were able to take a tax credit in Maryland against taxes paid to other states on their corporation income but were not allowed to take a credit against Maryland county tax for taxes paid to other states on the corporation income. The Court held that:

Maryland’s personal income tax system was not internally consistent under the Commerce Clause and therefore unconstitutionally discriminatory. According to the Court, if every state imposed their personal income tax in the same way as Maryland, an individual who lived in one state and worked in another would always be subject to a higher tax burden than an individual who lived and worked in the same state. The taxing scheme gave preferential treatment to purely intrastate activities versus interstate activities.

Therefore, the Court concluded that Maryland’s personal income tax system was not consistent under the Dormant Commerce Clause, and thus, unconstitutional.

In conclusion, the Wynnes were within their constitutional right to get a tax credit not only on their state tax but also on their county tax. This because it was protected under the Dormant Commerce Clause not to discriminate wherever that income is earned.

Danielle is a business administration major with a concentration in management information and technology at Montclair State University, Class of 2016.

Posted by Connie Huang.

According to Merriam Webster dictionary, fraud is “the crime of using dishonest methods to take something valuable from another person; a person who pretends to be what he or she is not in order to trick people; [or] a copy of something that is meant to look like the real thing in order to trick people.” Therefore, a person who pretends to be something they’re not in order to trick people and using dishonest ways to take something valuable from someone is fraud.

A former general counsel of a law firm in South Florida was sentenced to 18 months in federal prison. He was sentenced to federal prison because he helped a managing partner  “swindle investors by selling them ‘income’ from faked settlements.” He will probably be testifying against other defendants.

According to the article, defendant’s attorney argued that his client “had been punished enough by losing his New York law license and his home and declaring bankruptcy.” I agree that defendant has been punished enough, because losing one’s ability to work and make money (a law license) and maintain a house is hard on his life as it is. That is a lot to lose. The defendant apologized in court to his family members, which I believe is a rightful thing to do. He has declared he has been guilty to charges relating to wire fraud.

“Former General Counsel of Notorious Rothstein Law Firm Gets 18 Months for Fraud.” ABA Journal. N.p., n.d. Web. 14 Feb. 2015.

Connie is an international business major at Montclair State University, Class of 2017.

Posted by Danielle Lindsay Feoranzo.

It was on June 4^th 2015 that the U.S Supreme Court found the State of Maryland’s system of personal income taxation violated the nondiscrimination prong of the Dormant Commerce Clause. This clause states Congress has been given power over interstate commerce, and that states cannot discriminate against interstate commerce, nor can they unduly burden interstate commerce, even in the absence of federal legislation regulating the activity. The Court found that Maryland did not grant a resident credit for county income tax paid on income earned and taxed in another state. What to keep in mind is this particular state’s personal income tax scheme is of composed of three elements:

(1) A state tax imposed on all income of Maryland residents and the income of nonresidents from sources within Maryland, (2) a county tax (collected by the state) imposed on all income of state residents, and (3) a special nonresident state tax imposed on the income of nonresidents from sources within Maryland, which tax is said to be in lieu of the county tax and is imposed at a rate equal to the highest county tax within the state (pg. 1; Bright, Schulder, Upham).

In this instance, the Wynnes were state residents and subject to tax in 39 other states because they owned a corporation that resides in multiple states. The Wynnes were able to take a tax credit in Maryland against taxes paid to other states on their corporation income but were not allowed to take a credit against Maryland county tax for taxes paid to other states on the corporation income. The Court held that:

Maryland’s personal income tax system was not internally consistent under the Commerce Clause and therefore unconstitutionally discriminatory. According to the Court, if every state imposed their personal income tax in the same way as Maryland, an individual who lived in one state and worked in another would always be subject to a higher tax burden than an individual who lived and worked in the same state. The taxing scheme gave preferential treatment to purely intrastate activities versus interstate activities.

Therefore, the Court concluded that Maryland’s personal income tax system was not consistent under the Dormant Commerce Clause, and thus, unconstitutional.

In conclusion, the Wynnes were within their constitutional right to get a tax credit not only on their state tax but also on their county tax. This because it was protected under the Dormant Commerce Clause not to discriminate wherever that income is earned.

Danielle is a business administration major with a concentration in management information and technology at Montclair State University, Class of 2016.

Posted by Yuanda Xu.

On Oct. 30, 2014, Sembcorp Marine’s finance director Wee Sing Guan was sentenced to 39 months in prison for falsifying the accounts of the group’s Jurong Shipyard, Sembcorp’s wholly owned unit. The company lost “hundreds of millions of dollars’ worth of marked-to-market losses that Wee had incurred on foreign exchange and options trades positions he held with a host of banks, including OCBC Bank, DBS Bank, BNP Paribas (BNP), Societe Generale (SocGen) and Standard Chartered Bank.”

According to criminal law, falsifying account records is an unlawful action. Falsifying records can influence the stock market by making investors believe the company’s stock is worth it to buy. But after a company goes bankrupt, people who hold the stock will lose all their money. The offenses “carry a maximum penalty of an unspecified fine and a seven-year jail term, for each charge.”

Yuanda is a business management major at Montclair State University, Class of 2017.

Both sides of the political isle are pressuring the Fed to be more transparent regarding its monetary policy and cease “cozying up” to the banks it oversees. There are several legislative proposals that some prior Presidents of the Fed consider to be a threat to its independence. If any one of them are passed, it would be the first major overhaul of the institution since the Full Employment and Balanced Growth Act of 1978.

Senate Banking Committee Chairman Richard Shelby is concerned with the Fed’s portfolio, because since 2008 the Fed more than quadrupled its balance sheet to $4.5 trillion. It purchased bonds to suppress longer-term interest rates, but Shelby is at a loss to discover as to what the Fed is going to do with them.

Sen. Rand Paul, along with 29 other Republican Senators, the Majority Leader, and one Democrat, is sponsoring a bill requiring the Fed to be subject to “regular audits” of its monetary policy by the General Accounting Office (GAO). Paul reasoned it is “‘unseemly that an organization that we’ve given the power, the monopoly, of making money uses that power then to try to thwart transparency.’”

Representative Bill Huizenga of Michigan, head of the House Financial Services panel’s subcommittee on monetary policy, wants to require the Fed to use a mathematical rule when it changes interest rates. New Jersey Republican Representative Scott Garrett has introduced a bill entitled, the “Federal Reserve Transparency and Accountability Act” that “would require the central bank to perform a cost-benefit analysis of any new banking rule, submit internal audits and performance reviews to Congress and send a top official to testify before lawmakers on financial rule-making.”

There is at least some change to the selection of governors. Current law now requires at least one member of the seven-member Board of Governors to have community banking experience. It brings experience other than the traditional “academic” or “megabank” experience, as the proponent of the original bill, Sen. David Vitter of Louisiana, described. Individual governors on Fed’s Board of Governors are required to be confirmed by the Senate. The Board of Governors makes important decisions on interest rates and how banks are regulated. But specific expertise in banking is not a requirement for any of the positions. “Of the board’s current five members, three are economists and two are lawyers.” The addition of a governor with community banking experience, however, lends more diversity in the decision-making process.

The New York branch has been the target of Democrats, in particular Sen. Elizabeth Warren from Massachusetts. She has been critical of the current president, William C. Dudley, of being too chummy with big banks. Warren wants more congressional oversight of the central bank. Democratic Senator Jack Reed of Rhode Island suggests that selection of the New York Fed president should be confirmed by the Senate and has proposed a bill requiring it. Currently, the bank’s directors select the twelve district bank presidents who are then sent on for approval by the Fed board located in Washington.

A lot of criticism surrounds the amount of power the president of the New York branch has over policy set by the Federal Open Market Committee (FOMC). The president of the New York bank is the only president that does not have to rotate on the committee. Dallas Fed President Richard Fisher called for the “stripping” of the New York president’s permanent role on the FOMC, because the New York branch wields too much power and influence. The Independent Community Bankers of America, a Washington lobby consisting of 6,500 members, agree.

Both Democrats and Republicans want a more accountable Fed, but there are detractors who believe that legislation would only have the effect of politicizing the central bank. In one poll, 24% of Americans polled believe that politics should stay out of the Fed.

Posted by Shaaliyah T. Lyons. 

Background:

On ­­­­one Saturday night around 11:00pm stopped at a light, I looked up and realized I was being pulled over on Central Ave., in East Orange New Jersey.  Already in the far-right lane, I moved over slightly to get out the way of traffic.  I turned the car off and my two friends and I immediately started trying to figure out why we were being pulled over.  Is it my tinted windows? Was I speeding? What is the speed limit? Did someone throw something out at the window?  All in all, no one was really sure what actually happened but we all assumed it was my tinted windows, which have caused controversy in past.

Finally, the officer comes to the car with her flashlight beaming in the passenger and back seat as her partner comes on the driver side.  First, she asked for my license and registration.  Out of curiosity I asked why was I being pulled over.  She was hesitant and asked for my license again, for me this was a red flag.  I asked again for her reasoning for pulling me over. She proceeded to give me two reasons, one being my tints and the other because I was speeding.  In response to my tinted windows, I quickly explained that according to NJ Tint laws it depends on the part of the car:

Windshield: No tint is allowed on the windshield.

Front Side windows: No tint can be applied legally to this window.

Back Side windows: Any darkness can be used.

Rear Window: Any darkness can be used.

Following this explanation, I showed her that my front windows were not tinted. In regards to the second the reason, I simply questioned what was the speed limit and how fast was I going.  It was at this moment in which friction arose between us.  She could not tell me how fast I was going but mentioned that she had to do 50mph to catch up to me. I gave her my information and waited for her to come back to the car.

As she walked back, her partner’s family member proceeded to pull up to the gas station next to where I was pulled over.  As I continue into the next part of the background of the incident, please keep in mind that the entire time her partner was not in the scene and conversing with his family member in the gas station.

When she came back, she explained that she had given me a careless driving ticket.  A careless driving ticket usually occurs after an accident or when someone is found to be carelessly driving and putting someone’s life in danger.  Her explanation went as follows, “Because I do not have a radar, I cannot give you a speeding ticket; therefore, I am going to issue you a careless driving ticket.” Here is when it gets confusing because at this point no one really knows if I was even speeding and if so how fast I was going.  My follow up question to her (before taking the ticket) was, “Just for clarification, because you cannot prove I was speeding, you have to give me another ticket (which is arguably worse than a speeding ticket)?” She did not answer the question. After a minute or so of going back and forth, she proceeded to aggressively place my tickets and paper work on my dash board.

My Court Appearances

A week after I received my ticket, I called the East Orange Municipal Court to go over my court date. From there, I was informed that the date on the ticket is not an accurate day; the court told me they would enter me as a not guilty plea and I was issued a new court date.  On my new court date, the first person I talked to was the prosecutor, who gave me the opportunity to plead guilty to the obstruction of traffic.  This was a fine under $100, no points on my license, and I wouldn’t have to be in court all day.  I declined this offer, as you can tell from my story, I was doing the opposite of obstructing traffic, I was in fact going with the flow of traffic.  When it was my time to speak to the judge, they realized that even though I previously pled not guilty, the officers involved were not notified.

The following week, I submitted a request for discovery regarding my case.  Almost a month later, I came to court prepared with the copy of my discovery request, my witness, as well as the facts of the case.  The facts of this case went as followed:

1. A cop is not supposed to catch up to a car and proceed to pull them over; they are to pace behind them to have a gage of how fast they are going.A cop is not to place their hand on your property it can be considered trespassing on private property.

2. As stated before, there are no laws against the tints on my car.

3. In a 15 mile radius there is only one speed limit sign that is almost impossible to see at the time I was pulled over (brought in a picture).

4. The officer could not prove that I was driving in a careless manner that could endanger others.

When I entered the court room, I was asked if I wanted to continue to plead not guilty.  I confirmed.  When it was my turn to speak to the judge, he issued me a new court date.  That is when I explained that this is my 2^nd time and court and the officer has already been notified.

I motioned to dismiss this case due to lack of evidence against me, and he approved my motion and dismissed the case!  In the end, I did not have to pay any fine or have any points added to my license.

Shaaliyah is a sports management major with a certificate in entrepreneurial studies, at the Stillman School of Business, Seton Hall University, Class of 2017.