White Collar Roundup - August 2015

Extortion: Your Tax Information or an Audit

The Third Circuit in United States v. Fountain addressed the mental states required to violate the Hobbs Act's prohibition of extortion under color of official right. In the case, Patricia Fountain, an employee with the Internal Revenue Service (IRS), orchestrated schemes to file false tax returns in order to fraudulently obtain cash refunds from the IRS. Fountain and her co-conspirators recruited people to provide their information and agreed to pay them a portion of the expected cash refund. Some of the people who agreed to provide their personal information were then directed to pay Fountain a $400 fee. They were told that Fountain would "red flag" them if they refused. Fountain was convicted of Hobbs Act extortion under color of official right and appealed. In its opinion, the Third Circuit laid out the rules regarding color-of-official-right extortion. The court said that it would "uphold a conviction for Hobbs Act