McDonald Hopkins secures full acquittal of mortgage broker charged with tax fraud and conspiracy to file false tax returns

In a notable victory, Richard Blake, a Member with McDonald Hopkins and Chair of the firm’s Government Compliance, Investigations and White Collar Defense Practice Group, successfully defended his client against charges brought by the U.S. Department of Justice Tax Division.

Earlier this year, the DOJ Tax Division indicted Todd Marra, a mortgage broker from Macomb County, Michigan on charges of conspiracy and filing false personal tax returns in the federal district court in Detroit. The trial concluded on November 7 when the jury unanimously acquitted Marra on all counts after just over an hour of deliberation.

“This case shows the troubling tendency to mischaracterize errors and good faith mistakes as intentional fraudulent actions and how it too often results in criminal cases against ordinary individuals. The vast resources available to federal prosecutors make it very difficult for individual citizens to adequately defend themselves against drawn out investigations and trials,” said Blake, who has 35 years of trial experience as both a federal prosecutor and private practitioner. “At McDonald Hopkins, we understand these challenges and work closely with clients to analyze each case to make certain the best team is assembled for their individual situation.”

During the trial, the DOJ Tax Division argued that Marra knowingly conspired with his former partner to falsify their company’s internal QuickBooks files, not accounting for cash draws and personal expenses paid with the company’s credit card as personal income. In doing so, the DOJ Tax Division argued that both Marra and his former partner knowingly understated income on their personal tax returns.

In the face of voluminous documents and numerous witnesses presented by the government, Blake secured not guilty verdicts on all counts.

The trial

The DOJ Tax Division presented its case through the testimony of numerous witnesses and extensive bank records, which included:

• Testimony from Marra’s former partner, who pleaded guilty in 2022 to conspiring with Marra to commit tax fraud.
• Testimony from an IRS Revenue Agent who analyzed relevant bank records, monthly credit card statements, business and personal tax returns, handwritten ledgers maintained by Marra and his former partner, and summary exhibits detailing the government’s conclusions.
• Testimony from IRS Agents who executed search warrants on Marra’s business location and the home of his former spouse.
• Testimony on cross examination from an IRS Agent that the government had conducted undercover surveillance of Marra outside his home and elsewhere.
• Testimony of personal acquaintances of Marra discussing gifts and financial assistance he provided to them.
• Testimony of automobile salesmen regarding two vehicles Marra purchased for himself and his family.

The defense

Blake’s prevailing defense strategy centered on the notion, “if you cannot trust the messenger, you cannot trust the message.” Blake demonstrated the deficiencies in the prosecutor’s case through the following evidence:

• On cross examination, Marra’s former partner was shown to have provided contradictory versions of events and acknowledged that Marra had no access to the company’s QuickBooks files and no role in maintaining the financial data provided to accountants.
• Summary evidence provided by the government failed to recognize that a large portion of the cash withdrawn over the six years in question was provided to customers and not shared 50/50 between Marra and his former partner.
• Summary evidence provided by the government regarding personal expenses incurred on the company credit card inaccurately showed the amounts Marra and his former partner actually spent.

“Richard’s admirable dedication to his clients ensures that they receive the best defense available,” said Jim Giszczak, co-president of McDonald Hopkins. “He has an exceptional blend of practicality and tenacity and it paid off, yet again, in a case where the evidence seemed insurmountable.”