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January 8, 2003 The United States Attorney's Office for the Northern District of California announced the indictment of Michael James Martin, age 46, of Monterey, CA on seven counts of making false claims in tax returns filed with the Internal Revenue Service. Mr. Martin was indicted yesterday by a federal grand jury in San Jose in connection with these false claims in violation of Title 18, United States Code, Section 287. According to the indictment, Mr. Martin filed seven tax returns for the years 1996 through 2000, including two amended tax returns for 1998, that each claimed a refund of taxes paid based on a false exclusion from income earned from what his tax returns called the "Republic of California." The indictment alleges that Mr. Martin's tax returns each claimed that income earned from the "Republic of California" was excludable from taxable income because California is a foreign jurisdiction. Federal law allows for certain exclusions of income earned by a U.S. citizen who maintains their tax home in a foreign country, receives income from sources within a foreign country, and also be either a bona fide resident of a foreign country for an uninterrupted period which includes an entire taxable year, or is present in a foreign country during any 12 consecutive months during at least 330 days in such period. Mr. Martin was arrested by IRS Special Agents without incident as he left a residence in Monterey, California this morning. He had his initial appearance and was arraigned this afternoon in San Jose by Chief Magistrate Judge Patricia Trumbull. Mr. Martin did not enter a plea today. He was released on bond. The next court date is January 14, 2003 before Chief Magistrate Judge Trumbull for identification of counsel. The maximum statutory penalty for each violation of 18 U.S.C. § 287 is five years in prison and a fine of $250,000. However, any sentence following conviction would be dictated by the Federal Sentencing Guidelines, which take into account a number of factors, and would be imposed in the discretion of the Court. An indictment simply contains allegations against an individual and, as with all defendants, Mr. Martin must be presumed innocent unless and until convicted. The prosecution is the result of a one year investigation by Internal Revenue Service Criminal Investigation special agents. Marcia Jensen is the Assistant U.S. Attorney who is prosecuting the case with the assistance of Tracey Andersen. A copy of this press release may be found on the U.S. Attorney's Office's website at www.usdoj.gov/usao/can. Related court documents and information may be found on the District Court website at www.cand.uscourts.gov or on http://pacer.cand.uscourts.gov. All press inquiries to the U.S. Attorney's Office should be directed to Assistant U.S. Attorney Matthew J. Jacobs at (415) 436-7181 or Assistant U.S. Attorney Ross Nadel in San Jose at (408) 535-5037, Chief, San Jose Branch.
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