Daccarett-Ghia v. C.I.R.

1995 WL 17204810 (D.C.Cir.)

For opinion see 70 F.3d 621

United States Court of Appeals,

District of Columbia Circuit.

Johnny DACCARETT-GHIA, Alleged Alter Ego or Nominee of Friko Corporation,

Appellant,

COMMISSIONER OF INTERNAL REVENUE, Appellee.

No. 95-1029.

September 22, 1995.

On Appeal from the Decision of the United States Tax Court

Brief for the Commissioner

Loretta C. Argrett, Assistant Attorney General, Gary R. Allen, (202) 514-3361, Gilbert S. Rothenberg, (202) 514-2914, Sally J. Schornstheimer, (202) 514-4484, Attorneys, Tax Division, Department of Justice, Post Office Box 502, Washington, D.C. 20044.

*ii TABLE OF CONTENTS

Certificate as to parties, rulings, and related cases ... i

a. Parties and amici ... i

b. Rulings under review ... i

c. Related cases ... i

Table of contents ... ii

Statement of the issue ... 1

Statutes and regulations ... 1

Statement of subject matter and appellate jurisdiction ... 1

Statement of the case ... 2

Summary of argument ... 8

Argument:

The Tax Court properly dismissed taxpayer's case because he is a fugitive from justice and, as such, is not entitled to prosecute his case in that court ... 9

A. Introduction ... 9

B. The Tax Court correctly found that taxpayer is a fugitive from justice ... 11

C. The Tax Court correctly held that taxpayer is not entitled to prosecute his case because he is a fugitive from justice ... 12

D. The fugitive disentitlement doctrine applies to civil suits as well as to criminal appeals ... 25

E. The fugitive disentitlement doctrine applies to persons who have been indicted but not convicted ... 32

F. Taxpayers' arguments lack merit ... 40

Conclusion ... 43

Certification as to number of words ... 44

*iii CITATIONS

Cases:

Ali v. Sims, 788 F.2d 954 (3d Cir. 1986) ... 25

Austin v. United States, 113 S. Ct. 2801 (1993) ... 41, 42

Brin v. Marsh, 596 F. Supp. 1007 (D.D.C. 1984) ... 31

Broadway v. City of Montgomery 530 F.2d 657 (5th Cir. 1976) ... 36

Conforte v. Commissioner, 692 F.2d 587 (9th Cir. 1982) ... 27, 30

Daccarett-Ghia, Johnny, alter-ego or nominee of Friko Corporation v. Commissioner, 68 T.C.M. (CCH) 1336 (1994) ... 2, 3, 6, 9

Dawkins v. Mitchell, 437 F.2d 646 (D.C. Cir. 1970) ... 32

[FN*]Doyle v. United States Department of Justice, 494 F. Supp. 842 (D.D.C. 1980), aff'd, 668 F.2d 1365 (D.C. Cir. 1981), cert. denied, 455 U.S. 1002 (1982) ... 21, 27, 30, 43

Edelman v. Commissioner, 103 T.C. 705 (1994) ... 20

Estelle v. Dorrough, 420 U.S. 534, rehearing denied, 421 U.S. 921 (1975) ... 14, 15, 16, 17, 19, 23

Fratus v. United States, 496 F.2d 1190 (5th Cir. 1974) ... 30

Friko Corp. v. Commissioner, 26 F.3d 1139 (D.C. Cir. 1994) ... 6, 11, 12, 24, 25

Gee v. State of Kansas, 912 F.2d 414 (10th Cir. 1990) ... 33

Jhirad V. Ferrandina, 536 F.2d 478 (2d Cir.), cert. denied, 429 U.S. 833 (1976) ... 34

McGowen v. United States, 105 F.2d 791 (D.C. Cir.), cert. denied, 308 U.S. 552 (1939) ... 34

[FN*]McNichols v. Commissioner, 13 F.3d 432 (1st Cir. 1993), cert. denied, 114 S. Ct. 2704 (1994) ... 42

[FN*]Molinaro v. New Jersey, 396 U.S. 365 (1970) ... 12, 14, 15, 16, 17, 18, 19, 20, 21, 25, 29

Organization J.D. Ltda. and Manufacturas J.D. Ltda. v. United States (E.D.N.Y. - No. 93-4141) ... 40

*iv [FN*]Ortega-Rodriguez v. United States, 113 S. Ct. 1199 (1993) ... 6, 7, 8, 9, 10, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 28

[FN*]Schuster v. United States, 765 F.2d 1047 (11th Cir. 1986) ... 26, 28, 30, 32, 35, 36

Singleton v. Wulff, 428 U.S. 106 (1976) ... 41

Smith v. United States, 94 U.S. 97 (1876) ... 14

Special Grand Jury 81-1. In re, 697 F.2d 112 (4th Cir. 1982) ... 32

Thomas v. Commissioner, 67 T.C.M. (CCH) 2511 (1994) ... 42

United States v. All Funds on Deposit in Accounts Maintained at Merrill Lynch. Pierce, Fenner & Smith, et al., Civil No. CV 90-2510, 801 F. Supp. 984 (E.D.N.Y. 1992), affirmed, 6 F.3d 37 (2d Cir. 1993), cert. denied sub nom., Organizacion JD Ltda. v. United States, 114 S. Ct. 1295 (1994) ... 3, 5, 11, 30, 39

United States v. Ballesteros-Cordova, 586 F.2d 1321 (9th Cir. 1978) ... 35

United States v. Bravo, 10 F.3d 79, 84 (2d Cir. 1993) ... 21

United States v. Catino, 735 F.2d 718 (2d Cir.), cert. denied, 469 U.S. 855 (1984) ... 34, 35, 39

United States v. Contents of Account Numbers 3034504504 and 144-07143 at Merrill. Lynch, Pierce, Fenner and Smith. Inc., No. 90-1262 (MTB), affirmed in part and reversed in part, 971 F.2d 974 (3d Cir. 1992), cert. denied sub nom., Friko Corp. v. United States, 113 S. Ct. 1580 (1993) ... 4, 5, 26, 28

[FN*]United States v. $83,320 in United States Currency, 682 F.2d 573 (6th Cir. 1982) ... 21, 27

*v United States v. $45,940 in United States Currency, 739 F.2d 792 (2d Cir. 1984) ... 22, 30, 31, 37, 38

United States v. $40.877.59 in United States Currency, 32 F.3d 1151 (7th Cir. 1994) ... 21, 27, 33

United States v. Marshall, 856 F.2d 896 (7th Cir. 1988) ... 33

United States v. Mittleider, 835 F.2d 769 (10th Cir. 1987), cert. denied, 485 U.S. 980 (1988) ... 33

United States v. Montes Cardona. et al., Crim. No. 90-69 (AJL) ... 3, 4

United States v. One Parcel of Real Estate at 7707 S.W. 74th Lane, Miami, Dade County, Florida, 868 F.2d 1214 (11th Cir. 1989) ... 30, 32

[FN*]United States v. $129,374 in United States Currency, 769 F.2d 583 (9th Cir. 1985), cert. denied sub nom., Geiger v. United States, 474 U.S. 1086 (1986) ... 22, 26, 30

United States v. Pole No. 3172. Hopkinton, 852 F.2d 636 (1st Cir. 1988) ... 27, 30, 31

[FN*]United Sates v. Real Property Located at Incline Village, 47 F.3d 1511 (9th Cir. 1995), petition for cert. filed (No. 95-173 July 28, 1995) ... 20, 21, 32, 36, 39

[FN*]United States v. Reese, 993 F.2d 254 (D.C. Cir. 1993) ... 9, 17, 20

United States v. Schreiber, 535 F. Supp. 1359 (S.D.N.Y. 1982) ... 31

United States v. Sharpe, 470 U.S. 675 (1985) ... 27

United States v. Snow, 748 F.2d 928 (4th Cir. 1984) ... 15

United States v. Timbers Preserve, Rout County, Colo., 999 F.2d 452 (10th Cir. 1993) ... 22, 30

United States v. 218 Panther Street, Newfoundland, Pa., 745 F. Supp. 118 (E.D.N.Y. 1990), aff'd sub nom. United States v. Eng, 951 F.2d 461 (2d Cir. 1991) ... 22, 29, 34, 39

United States v. U.S. Commanding Officer, 496 F.2d 324 (1st Cir. 1974) ... 31

*vi Statutes:

Internal Revenue Code of 1986 (26 U.S.C.):

§ 6213 ... 1

§ 7426 ... 40

§ 7429 ... 2, 35

§ 7482 ... 1

18 U.S.C.:

§ 371 ... 3, 8, 28

§ 401 ... 13

§ 921 ... 33

§ 1001 ... 37

§ 3146 ... 13

§ 3182 ... 33

§ 3290 ... 34

21 U.S.C., § 881 ... 41, 42

Miscellaneous:

Rules of Practice and Procedure of the United States Tax Court, Rule 123 ... 25

FN* Authorities upon which we chiefly rely are marked with asterisks.

*1 STATEMENT OF THE ISSUE

Whether the Tax Court correctly dismissed taxpayer's petition because he is currently a fugitive from justice.

STATUTES AND REGULATIONS

There are no statutes at issue.

STATEMENT OF SUBJECT lATTER AND APPELLATE JURISDICTION

The Tax Court had jurisdiction over taxpayer's petition to redetermine the deficiency under § 6213(a) of the Internal Revenue Code of 1986. This Court has jurisdiction to review the decision of the Tax Court dismissing his petition under § 7482(a) (1).

*2 STATEMENT OF THE CASE

The IRS made a jeopardy assessment against Johnny DaccarettGhia ("taxpayer") on or about July 28, 1992, and sent him a Notice of Jeopardy Assessment and Right of Appeal on August 3, 1992, pursuant to Code § 7429(a)(1). (See JA-14.) On September 24, 1992, the Commissioner issued a statutory notice of deficiency to taxpayer for the taxes set forth in the jeopardy assessment. (See JA-14; Doc. 2, Ex. 1.) [FN1] The taxes and penalties, which encompassed the tax years 1985, 1986, 1987, 1988, and 1989, totalled $2,093,472 (excluding interest), broken down as follows (Doc. 2, Ex. 1; see JA-11): [FN2]

FN1. "Doc." references are to the docket entries on the Tax Court docket sheet in Docket No. 22854-92, which is reproduced in the Joint Appendix (JA-1).

FN2. The assessment was in the same amount (other than for interest) as a jeopardy assessment made against Friko Corporation ("Friko") on or about May 6, 1991. (See JA-14.) The assessments were based on deposits to an account at Merrill Lynch in the name of Friko. (See JA-9; Doc. 2, Ex. 1 at 6.)

On October 13, 1992, taxpayer filed a petition in the United States Tax Court for redetermination of the deficiencies, Johnny *3 Daccarett, alter eqo or nominee of Friko Corporation v. Commissioner, T.C. Dkt. No. 22854-92. [FN3] (Doc. 2.)

FN3. In the meantime, the IRS served a levy on the Clerk of the United States District Court for the Eastern District of New York to reach all property held by the Clerk for Manufacturas J.D. or Organizacion J.D. as alter egos or nominees of Daccarett-Ghia. This levy reached funds held by the Clerk in United States v. All Funds on Deposit in Accounts Maintained

at Merrill Lynch. Pierce. Fenner & Smith, etal., Civil No. CV 90-2510, 801 F. Supp. 984 (E.D.N.Y. 1992), aff'd, 6 F.3d 37 (2d Cir. 1993), cert. denied sub nom., Organizacion JD Ltda. v. United States, 114 S. Ct. 1295 (1994) ("All Funds case") as a result of a civil forfeiture case. (JA-14, 23-24.)

Taxpayer is a citizen and resident of the Republic of Colombia. (See JA-8.) On February 7, 1990, the United States District Court for the District of New Jersey issued a warrant for taxpayer's arrest. (JA-8; Doc. 27, ¶ 19 & Jt. Ex. 9-I.) On February 15, 1990, a criminal indictment was filed in the same court charging taxpayer, among others, with conspiracy to engage in money laundering in violation of 18 U.S.C. § 371. [FN4] United States v. Montes Cardona. et al., Crim. No. 90-69 (AJL). (JA-8.) Taxpayer has not yet been arrested, and the indictment remains open as to him. [FN5] (JA-9, 13.)

FN4. The indictment states in pertinent part (see JA-8, 20):

It was further part of the conspiracy that defendants * * * JOHNNY DACCARETT, * * * FRIKO CORPORATION and others maintained bank accounts, money market accounts; and certificates of deposit in their own names and in the names of other individuals and corporations, and utilized those accounts to receive large sums of money orders and checks from defendant

JULIO MONTES CARDONA and others.

FN5. The indictment against Friko was dismissed without prejudice on October 16, 1990. (JA-9.)

*4 On October 21, 1992, the Commissioner moved the court to dismiss taxpayer's petition because he is a fugitive from justice and, as such, is not entitled to maintain the action in a United States court. (Doc. 12.) The Tax Court held an evidentiary hearing on December 2, 1992. (See Doc. 26, 29.) A special agent with the Criminal Investigation Division, Robert W. Dunst, testified that he had been assigned to investigate the defendants in the Montes Cardona case, that at least eight of the defendants had been apprehended and that all eight had pled guilty either to conspiracy, structuring, or money laundering charges, and that taxpayer had not been apprehended. (Doc. 29.) He also testified that correspondence that taxpayer's then-counsel sent to the United States Attorney's Office soon after the indictments were issued indicated that taxpayer was aware of the charges, and that taxpayer, as president of Friko, had signed a corporate resolution of Friko assigning an attorney to Friko. (Doc. 29; see Doc. 27, 1 5, Jt. Ex. 1-A.) In addition, Special Agent Dunst testified that taxpayer has never offered to surrender himself to United States authorities to face the charges pending against him, and that, in the related forfeiture action in the United States District Court for the District of New Jersey, United States v. Contents of Account Numbers 3034504504 and 144-07143 at Merrill. Lynch. Pierce, Fenner and Smith. Inc., No. 90-1262 (MTB) (D.N.J.), affirmed in part and reversed in part, 971 F.2d 974, 976-977 (3d Cir. 1992), cert. denied sub nom., Friko Corp. v. United States, 113 S. Ct. 1580 (1993), taxpayer had filed a *5 motion for a protective order to prevent his deposition being taken in the United States. [FN6] (Doc. 29; Doc. 27, ¶ 15.)

FN6. In addition, in the civil forfeiture case in the Eastern District of New York (the All Funds case), in response to a Government subpoena for deposition, taxpayer filed a motion for protective order and motion for order to take deposition by telephone. (Doc. 27, 1 9 & Jt. Exs. 2-B & 3-C.) His deposition was never taken, and the complaint in All Funds was dismissed (without prejudice) as to taxpayer in February, 1991.

By opinion entered January 6, 1993, the Tax Court (L.W. Hamblen, Jr., Chief Judge) found that taxpayer is a fugitive from justice as a result of his failure to submit to the jurisdiction of the district court in New Jersey (JA-10): [FN7]

FN7. The United States District Court for the District of New Jersey has also held that Friko is the alter ego of taxpayer. See United States v. Contents of Account Nos. 3034504504 and 144-07143 at Merrill. Lynch, Pierce. Fenner and Smith. Inc., 971 F.2d at 986. The Third Circuit remanded the case for the district court to consider Friko's Rule 60(b) motion based on allegedly new evidence. 971 F.2d at 988. The district court proceeding has been delayed because the court denied the application of Friko's counsel to appear pro hac vice and proceed without local counsel. (See JA-23 n.6.)

In light of the evidence and testimony presented by respondent at the hearing of this matter, we are compelled to conclude that a criminal indictment remains outstanding against petitioner, that petitioner has been aware of the indictment for some time, and that petitioner refuses to surrender himself to the proper authorities to face the charges. Petitioner has failed to present any meaningful evidence to convince us otherwise.

The court concluded (JA-10) that taxpayer's "behavior [is] sufficient cause to exercise our discretion to dismiss this case." The court also stated, however, that it would "vacate the decision entered in this case if, within 30 days after service of *6 this order of dismissal and decision, petitioner submits himself to the jurisdiction of the Federal courts for purposes of trial on the charges for which he has been indicted." (JA-10-11.) Taxpayer failed to submit to the authorities, and the court dismissed his petition on January 6, 1993. (JA-12.)

Taxpayer appealed from the order dismissing his petition because he is a fugitive from justice. [FN8] This Court assigned Docket No. 93-1269 to the case. After briefing and argument, this Court remanded the case to the Tax Court for reconsideration of its order dismissing the petition in light of a recent Supreme Court case addressing the fugitive disentitlement doctrine, Ortega-Rodriquez v. United States, 113 S. Ct. 1199 (1993). Friko Corp. v. Commissioner, 26 F.3d 1139, 1143 (D.C. Cir. 1994).

FN8. Taxpayer and Friko also appealed from orders denying their motions to review the jeopardy assessments and jeopardy levies made against them, and from the orders denying their motions to restrain assessment and collection of the taxes. This Court affirmed those orders. Friko Corp. v. Commissioner, 26 F.3d 1139, 1141-1142 (D.C. Cir. 1994).

On remand, the Tax Court (Julian I. Jacobs, Judge) entered a memorandum opinion on December 5, 1994. (JA-18-33.) After considering the Supreme Court's opinion in Orteca-Rodriguez and this Court's order remanding the action, the Tax Court concluded that dismissal was appropriate. Johnny Daccarett-Ghia, alter ego or nominee of Friko Corporation v. Commissioner, 68 T.C.M. (CCH) 1336 (1994). (A-18.) Specifically, it noted that Ortega-Rodriquez addressed the application of the fugitive *7 disentitlement doctrine where a defendant is no longer a fugitive but was recaptured before the appeal began, and concluded that the Supreme Court's holding there was limited to that circumstance. (JA-31.) Thus, the Tax Court determined that Orteca-Rodriguez did not "overrule the long line of cases applying the fugitive disentitlement doctrine in civil proceedings (such as the instant case) where the defendant remains a fugitive." (JA-31.) "More importantly," the Tax Court went on to observe (JA-32), taxpayer's "alleged money-laundering activities are connected with the tax deficiencies determined by [the Commissioner]." Consequently, the Tax Court held that "there is a connection between the criminal charges pending against petitioner and the tax deficiencies determined by [the Commissioner] sufficient to apply the fugitive disentitlement doctrine." (JA-19.)

On December 6, 1994, the Tax Court entered an order of dismissal and decision, which granted the Commissioner's motion to dismiss and decided deficiencies in the federal income taxes as set forth in the Commissioner's notice of deficiency. (JA34.)

Taxpayer appeals. [FN9]

FN9. Taxpayer also filed a petition for a writ of mandamus and a motion

for a stay pending appeal (No. 95-1020). The Court denied both the petition and the motion for stay by order entered March 8, 1995.

*8 SUMMARY OF ARGUMENT

The Tax Court properly dismissed taxpayer's case because he is a fugitive from justice and, therefore, is not entitled to use the federal courts to prosecute this appeal. in 1990, taxpayer was indicted for conspiracy in money laundering under 18 U.S.C. S 371. The United States District Court for the District of New Jersey issued a warrant for his arrest. He has not come to the United States to answer the warrant and face the charges pending against him. After conducting a hearing, the Tax Court found that taxpayer is a fugitive from justice, and it correctly exercised its discretion to dismiss his petition.

On remand from this Court to reconsider its decision in light of supervening authority, Ortega-Rodriguez v. United States, 113 S. Ct. 1199 (1993), the Tax Court reiterated its conclusion that it could properly exercise its discretionary authority to dismiss the case based on taxpayer's fugitive status, and did so. The court noted that the opinion in Ortega-Rodriquez took pains to point out that it did not upset the settled rule that the fugitive disentitlement doctrine applies when a defendant remains a fugitive, but rather addressed the different question whether the doctrine applies when the defendant is no longer a fugitive and, as a result, there is no apparent connection to the ongoing appellate process. Since taxpayer remains a fugitive, the settled rule is the applicable rule here.

*9 This Court has indicated as much in United States v. Reese, 993 F.3d 254, 256 (D.C. Cir. 1993), a case construing Ortega-Rodriguez, in which it noted that the fugitive disentitlement Doctrine "automatically" applies when the defendant is still a fugitive, but does not generally apply when he is no longer a fugitive. It is only in the latter circumstance that there must be found some other connection to the ongoing appellate process, such as an interference with the efficient functioning of the courts. Thus, application of the fugitive disentitlement doctrine to dismiss taxpayer's petition in the instant case was a proper exercise of the Tax Court's discretion.

The Tax Court's decision should be affirmed.

ARGUMENT

THE TAX COURT PROPERLY DISMISSED TAXPAYER'S CASE BECAUSE HE IS A FUGITIVE FROM

JUSTICE AND, AS SUCH, IS NOT ENTITLED TO PROSECUTE HIS CASE IN THAT COURT

A. Introduction

Taxpayer filed a petition in the United States Tax Court for a redetermination of his tax liability. See Johnny Daccarett-Ghia. alter eao or nominee of Friko Corporation v. Commissioner, T.C. No. 22854-92. The Government moved to dismiss the petition on the ground that taxpayer is a fugitive from justice who is not entitled to use the resources of the federal courts to prosecute his claims. After holding an evidentiary hearing, Tax Court found that taxpayer is currently a fugitive from justice, and accordingly held that he is not entitled to litigate a tax liability that is connected to the criminal charge pending in *10 NewJersey. The court thus granted the Government's motion, dismissed taxpayer's petition, and entered a decision in the amount of the deficiencies determined by the Commissioner. [FN10] (JA-4-11.)

FN10. The Tax Court stated that it would vacate the decision if, within 30 days of the date of the decision, taxpayer submitted himself to the jurisdiction of the federal courts for purposes of trial on the charges for which he has been indicted. (JA-10-11.) Taxpayer failed to do so.

After the Tax Court's original order dismissing taxpayer's petition was entered but before this Court heard his appeal, the Supreme Court issued an opinion dealing with the fugitive disentitlement doctrine in the context of a fugitive that was recaptured before the appeal that was the subject of the dismissal, i.e., a former fugitive. See Orteca-Rodriquez v. United States, 113 S. Ct. 1199 (1993). This Court remanded the instant case for the Tax Court to consider "the extent to which Ortega-Rodriquez affects the Tax Court's use of the fugitive. disentitlement doctrine in this case." 26 F.3d at 1143. On remand, the Tax Court held that Orteca-Rodriguez does not disturb the settled rule that the fugitive disentitlement doctrine applies to defendants who are fugitives during the appellate process, but merely establishes a more limiting rule for application to defendants who are not fugitives at any point in the appellate process. The Tax Court also found that the determination of tax deficiencies in this case was in fact related to the criminal indictment for which taxpayer is *11 currently a fugitive. As we shall show, the Tax Court's decision is correct in each of these respects. [FN11]

FN11. We note that some portions of this brief are substantially similar to the Government's brief filed in the first appeal of this case, Friko (No. 93-1269), 26 F.3d 1139 (D.C. Cir. 1994).

B. The Tax Court correctly found that taxpayer is a fugitive from justice

The Tax Court found that taxpayer is a fugitive from justice. [FN12] (JA-10.) That finding is not clearly erroneous. Indeed, it is clearly correct. Taxpayer admits that an indictment was issued against him (among others) on February 15, 1990, and that the indictment remains outstanding as *12 to him. (Br. 4-6; Doc. 27, ¶¶ 1-3.) Although he has been aware of the indictment, he has not returned to the United States to respond to that indictment, and he has resisted attempts by the Government to obtain his deposition in the United States. (See Doc. 27, 1 9 & Jt. Ex. 2-B.) Thus, it is clear that taxpayer is currently a fugitive. See infra pp. 32-40.

FN12. As the Tax Court noted (JA-30), the United States District Court for the Eastern District of New York has also found that taxpayer is a fugitive from justice in connection with the pending criminal indictment in the United States District Court for New Jersey. See All Funds, 801 F. Supp. at 998. in that civil forfeiture case, a jury found that the funds seized from two Colombian corporations (Organizacion J.D. and Manufacturas J.D.) were not the traceable proceeds of illegal drug activity and drug money-laundering transactions, and that those funds should not be forfeited to the Government. See All Funds, 801 F. Supp. at 993. The United States asked the court to delay the release of funds to the two companies on the ground that taxpayer in this case, who was the owner and legal representative of the two companies, is a fugitive from justice. In ruling on this issue, the court found that taxpayer is, indeed, a fugitive from justice. 801 F. Supp. at 998. Although it found that taxpayer is a fugitive, the court declined to apply the fugitive disentitlement doctrine to delay the release of funds held by the clerk of the court that were to be returned to the two companies for other reasons (ego., it concluded that the Government had not proven that taxpayer here is the alter ego of the two corporations who were seeking release of the funds; taxpayer's

expressed willingness to be deposed by telephone or in Columbia indicated that he was not flouting the judicial system; and the criminal charges from which taxpayer was fleeing apparently were unrelated to the civil forfeiture case before the district court). Thus, the basis for its decision not to apply the doctrine was unrelated to the factual issue whether taxpayer is a fugitive from justice.

C. The Tax Court correctly held that taxpaver is not entitled to prosecute his case because he is a fugitive from justice

As long as taxpayer remains a fugitive from justice, he should be denied access to the federal courts, at least with regard to actions which are related to the criminal charges from which he is a fugitive. In Molinaro v. New Jersey, 396 U.S. 365 (1970), the Supreme Court declined to adjudicate an appeal from the merits of a conviction where the appellant was a fugitive. In doing so, the Court stated (396 U.S. at 366):

No persuasive reason exists why this Court should proceed to adjudicate the merits of a criminal case after the convicted defendant who has sought review escapes from the restraints placed upon him pursuant to the conviction. While such an escape does not strip the case of its character as an adjudicable case or controversy, we believe it disentitles the defendant to call upon the resources of the court for determination of his claims.

Contrary to the suggestion of this Court in the initial appeal of this case (Friko, 26 F.3d at 1143), the Supreme Court's recent decision in Ortega-Rodriquez, 113 S. Ct. 1199 (1993), does not upset this well-settled rule. Indeed, it confirms the rule as applied to defendants who remain fugitives during the *13 appellate process. It then fashions a different rule for cases in which the defendant is not a fugitive at any point in the appellate process.

In Orte a-Rodriguez, the criminal defendant fled after his conviction but prior to his sentencing, and was sentenced in absentia. He did not appeal the sentence, although his codefendants did. He was captured eleven months after he fled. He was then indicted for contempt of court (18 U.S.C. § 401(3)) and failure to appear (18 U.S.C. § 3146). While he was under indictment, the appeals of his co-defendants in the original case were considered. The appellate court affirmed one conviction and reversed the other for insufficiency of evidence. See 113 S. Ct. at 1202.

Ortega-Rodriguez eventually moved for resentencing and acquittal of the original charges against him on the basis that the evidence against him was insufficient to support a conviction. 113 S. Ct. at 1202, 1203. The district court reduced his sentence but denied his motion for acquittal, and Ortega-Rodriguez appealed. The Eleventh Circuit applied its rule mandating automatic dismissal of the appeal on the fugitive disentitlement doctrine, and dismissed the appeal without reaching the merits. See 113 S. Ct. at 1203.

The Supreme Coutt reversed. in doing so, it emphasized (113 S. Ct. at 1203 (emphasis added)) that "it has been settled for well over a century that an appellate court may dismiss the appeal of a defendant who is a fugitive from justice during the *14 pendency of his appeal." In the first such case before the Court, Smith v. United States, 94 U.S. 97 (1876), the Court based its dismissal on the fact that, since the defendant remained a fugitive, the judgment of the court was not enforceable. In Molinaro v. New Jersey, 396 U.S. 365, 366 (1970), the Court used a different rationale: "we believe [the defendant's escape] disentitles the defendant to call upon the resources of the Court for determination of his claims." That rationale "construes a defendant's flight during the pendency of his appeal as tantamount to waiver or abandonment." The Court in Orteaa-Rodricuez also recognized (113 S. Ct. at 1204) that it had previously upheld the constitutionality of a state statute which provided for automatic dismissal of an appeal when a defendant escapes during the pendency of the appeal, unless he voluntarily returns within 10 days, because such a rule "discourages the felony of escape and encourages voluntary surrenders." Estelle v. Dorrough, 420 U.S. 534, 537, rehearing denied, 421 U.S. 921 (1975), quoted in Ortega-Rodriquez, 113 S. Ct. at 1204.

Thus, the Court concluded, "our cases consistently and unequivocally approve dismissal as an appropriate sanction when a prisoner is a fugitive during 'the ongoing appellate process.' " 113 S. Ct. at 1204. The different question that the Court addressed in Ortega-Rodriguez was "whether the same rationales support a rule mandating dismissal of an appeal of a defendant who flees the jurisdiction of a district court, and is recaptured before he invokes the jurisdiction of the appellate tribunal." *15 113 S. Ct. at 1205. The Court concluded (113 S. Ct. at 12051206) that the justifications for dismissal of appeals while the defendant remained a fugitive are weaker when the defendant's fugitive status has ended and "at no time coincides with his appeal." This is so because there would be no problem enforcing a judgment against a defendant then in custody; an appeal of a former fugitive often will cause no interference with efficient operation of the judicial process; and "dismissal of appeals filed after recapture [do not] operate to protect the 'dignity[y]' of an appellate court." 113 S. Ct. at 1206, quoting Estelle v. Dorrough, 420 U.S. at 537. Thus, where the defendant was no longer a fugitive but was in custody before he filed the appeal and his earlier fugitive status did not affect the appellate process, the Court held that there was not a sufficient connection between that former status as a fugitive and the appellate process to apply the Molinaro rule that the appeal of a current fugitive should be dismissed.

The entire basis of the Court's discussion in Orteca-Rodriquez is the fact that the defendant in that case was not a fugitive at any time while the case was pending before the court that dismissed the appeal, and the former fugitive status did not affect the appellate process. [FN13] The Court did not throw doubt on the "settled" rule that dismissal of an appeal is *16 appropriate if the defendant remains a fugitive when the appeal is filed. See 113 S. Ct. at 1203 ("It has been settled for well over a century that an appellate court may dismiss the appeal of a defendant who is a fugitive from justice during the pendency of his appeal); at 1204 ("our cases consistently and unequivocally approve dismissal as an appropriate sanction when a prisoner is a fugitive during 'the ongoing appellate process' "). But to support a rule of dismissal of all appeals brought by "former fugitives, returned to custody before invocation of the appellate system," some additional justification was considered necessary beyond that "provided when a defendant is at large during 'the ongoing appellate process.' " See 113 S. Ct. at 1208, quoting Estelle v. Dorrough, 420 U.S. at 542 n.ll.

FN13. See also United States v. Snow, 748 F.2d 928, 930 (4th Cir. 1984) (declining to dismiss a criminal appeal where the appellant, who had escaped from custody, was recaptured prior to the court's consideration of his appeal).

Where, however, the defendant remains a fugitive during the appeal, his ongoing fugitive status itself forms the requisite "connection between a defendant's fugitive status and the appellate process." 113 S. Ct. at 1208. It is thus only when the defendant has been recaptured prior to the appeal that it is necessary to find another "connection" to justify dismissal (113 S. Ct. at 1209-1210 (emphasis added)):

[Wlhen a defendant's flight and recapture occur before appeal, the defendant's former fugitive status may well lack the kind of connection to the appellate process that would justify an appellate sanction of dismissal. * * * * The contempt for the appellate process manifested by flight while a case is pending on appeal remains subject to the rule of Molinaro, [i.e., the fugitive is disentitled to call upon the resources of the court].

*17 The opinion then recognizes that, even where the defendant is not a fugitive at any point in the appellate process, his earlier flight could impact on the appellate process sufficiently to warrant dismissal. 113 S. Ct. at 1208-1209. For instance, a court would have authority to dismiss an appeal where the Government's ability to reprosecute would be prejudiced by the delay caused by the defendant's flight or where the delay has caused interference with the efficient operation of the appellate process. 113 S. Ct. at 1208- 1209. See United States v. Reese, 993 F.2d 254 (D.C. Cir. 1993) (dismissing the appeal of a criminal defendant who was not a fugitive at the time of his appeal because his earlier flight "prevented the court from consolidating his appeal with that of his co-defendant," thus disrupting the appellate process).

Taxpayer relies (Br. 12) on the Court's statement in Ortega-Rodriguez that "[w]e cannot accept an expansion of this reasoning that would allow * * * an appellate court to sanction by dismissal any conduct that exhibited disrespect for any aspect of the judicial system, even where such conduct has no connection to the course of appellate proceedings." But, as the Supreme Court made clear in Ortega-Rodriguez, the fugitive's conduct does have the requisite connection to the appellate process if the defendant "is at large during 'the ongoing appellate process.'° 113 S. Ct. at 1208, quoting Estelle v. Dorrough, 420 U.S. 534, 542 n.11 (1975). That is the holding of Molinaro, which the Court specifically embraced. 113 S. Ct. at 1203-1204. The Court *18 did not require any additional "connection" where the doctrine is applied to "dismiss the appeal of a defendant who is a fugitive from justice during the tendency of his appeal." 113 S. Ct. at 1203 (emphasis added). [FN14]

FN14. Indeed, virtually every sentence in the Court's opinion that contains broad language that at first glance appears to severely limit the scope of the fugitive disentitlement doctrine also contains language that makes clear that the Court is addressing only the situation in which former

fugitives were returned to custody prior to the appeal in which dismissal is sought. See, e.g., Ortega-Rodriguez, 113 S. Ct. at 1209 (emphasis added) ("when a defendant's flight and recapture occur before appeal, the defendant's former fugitive status may well lack the kind of connection to the appellate process that would justify an appellate sanction of dismissal"); at 1207 (emphasis added) (petitioner, who fled before sentencing and was recaptured before appeal, flouted the authority of the District Court, not the Court of Appeals"); at 1207 (emphasis added) ("to the extent that the Holmes rule rests on the premise that Molinaro's disentitlement theory by itself justifies dismissal of an appeal filed after a former fugitive is returned to custody, see 680 F.2d, at 1374, it cannot be sustained").

The Court in Ortecra-Rodriguez also noted (113 S. Ct. at 1207) that dismissal of an appeal of a defendant "who fled before sentencing and was recaptured before appeal" flouted the authority and affronted the dignity of only the district court, because the disrespectful conduct occurred "solely" while the case was pending in the district court. The Court recognized, however, that "flight while a case is pending on appeal remains subject to the rule of Molinaro." 113 S. Ct. at 1210. Thus, the Orteaa-Rodriguez opinion applies only to "former fugitives, returned to custody before invocation of the appellate system." 113 S. Ct. at 1208. As to current fugitives, the fugitive *19 disentitlement doctrine established in Molinaro applies with full force. [FN15]

FN15. We note that the dissent in Ortega-Rodriguez makes clear that the majority opinion has resulted in two rules covering two different situations (but not sufficiently different in the minority's view to justify the difference in outcome): (1) dismissal is appropriate as a matter of course if the defendant is at large when the notice of appeal is filed or escapes during the appellate proceedings; and (2) dismissal is not appropriate if the fugitive status "does not coincide with the pendency of the appeal," unless the earlier flight significantly interferes with the operation of the appellate process. 113 S. Ct. at 1210, 1212 (Rehnquist, Chief Justice, dissenting). The mihority would not restrict application of the fugitive disentitlement doctrine to cases in which the defendant remains a fugitive. Id.

In this case, of course, taxpayer has not yet surrendered to the custody of the federal courts; he is not a former fugitive -- he is a fugitive -- and he has been a fugitive during the entire course of proceedings before the Tax Court and before this Court. [FN16] Thus, there is no need to articulate an additional "connection" to the pending case. This case falls within the settled line of cases which "consistently and unequivocally approve dismissal as an appropriate sanction when a prisoner is a fugitive during 'the ongoing appellate process.' " 113 S. Ct. at 1204, citing Estelle v. Dorrough. 42 U.S. at 542 n.11.

FN16. Indeed, since taxpayer was a fugitive when he filed this notice of appeal and remains a fugitive "during the ongoing appellate process," this Court could properly apply the doctrine and dismiss this appeal.

This Court has previously recognized that the Orteaa-Rodriquez decision deals with the situation where the defendant *20 fled and was recaptured prior to the appeal. United States v. Reese, 993 F.2d at 256 (emphasis added; citations deleted):

In Ortega-Rodriguez, * * * the Supreme Court held that a court of appeals may dismiss the appeal of a former fugitive if there is "some connection between [the] defendant's fugitive status and his appeal." * * * Thus, when a defendant flees after he has filed a notice of appeal, his flight automatically "disentitles the defendant to call upon the resources of the Court." Molinaro, 396 U.S. at 366 * * *; accord Ortega-Rodriguez, * * * 113 S. Ct. at 1204 ("our cases consistently and unequivocally approve dismissal as an appropriate sanction when a prisoner is a fugitive during the 'ongoing appellate process' "). If the defendant absconds prior to filing a notice of appeal. however, then once he is back in custody and pursuing a timely appeal his former status as a fugitive may "lack the kind of connection to the appellate process that would justify an appellate sanction of dismissal."

Thus, under the law of this Circuit, if the defendant remains a fugitive, dismissal is "automatic." Only if the defendant is no longer a fugitive is an examination of justifications and other "connections" required.

Similarly, in Edelman v. Commissioner, 103 T.C. 705, 710 (1994), the Tax Court dismissed the taxpayer's petition for redetermination of deficiencies where he had escaped from prison while serving a sentence for tax fraud. The Tax Court distinguished its case from Ortega-Rodriguez because it dealt with a former fugitive who was recaptured before he invoked the appellate process, while the taxpayer in Edelman was "a current fugitive who commits an ongoing wrong by refusing to turn himself in." See also *21United States v. Real Property at Incline Village, 47 F.3d 1511, 1515 (9th Cir. 1995), petition for cert. filed (No. 95-173 July 28, 1995) (comparing Molinaro rule that calls for dismissal where the defendant remains a fugitive with the Ortega-Rodriguez rule that the appellate process may not have a sufficient connection to the former fugitive status to warrant dismissal when the flight and recapture occur prior to the appeal); United States v. Bravo, 10 F.3d 79, 84 (2d Cir. 1993) (noting that the Court in Ortega-Rodriguez, 113 S. Ct. at 1203, "noted with approval" the well-settled rule that "an appellate court may dismiss the appeal of a defendant who is a fugitive from justice during the pendency of his appeal," but concluded that the same rule did not apply when the defendant was not a fugitive during the appellate process); Doyle v. United States Department of Justice, 668 F.2d 1365 (D.C. Cir. 1981) (pre Ortega-Rodriguez) (so long as plaintiff "remains a fugitive from federal justice he may not call upon the resources of the court to adjudicate his claim"), cert. denied, 455 U.S. 1002 (1982).

Taxpayer relies heavily on United States v. $40.877.59 in United States Currency, 32 F.3d 1151 (7th Cir. 1994), in which the Seventh Circuit held that district courts should not apply the fugitive disentitlement doctrine in civil forfeiture cases. As the Seventh Circuit acknowledged (32 F.2d at 1153), however, its opinion is against the weight of authority. [FN17] *22 We submit that the Seventh Circuit's decision is incorrect, and ignores both the limitation of the opinion in Ortega-Rodriguez to the cases in which the defendant is no longer a fugitive, and the fundamental fact (as applied to this case) that taxpayer remains a fugitive of his own choosing. This is not a case, as is Ortega-Rodriguez, in which the fugitive defendant has returned (voluntarily or not) to the jurisdiction of the criminal charges. If the fugitive disentitlement doctrine were to be applied to a case involving a former fugitive, the fugitive could take no action that would enable him to prosecute or defend a case in which his property interests were at stake. Thus, application of the fugitive disentitlement doctrine to a former fugitive who is currently within the jurisdiction could serve no incentive purpose, and would penalize the defendant for his former status.

FN17. The court noted (32 F.3d at 1153) that although the Sixth Circuit does not permit the doctrine to be applied in civil forfeiture case (United States v. S83.320 in United States Currency, 682 F.2d 573 (6th Cir. 1982)), four circuits do. See, e.g., United States v. Ena, 951 F.2d 461 (2d Cir. 1991); United States v. $45.940 in United States Currency 739 F.2d 792 (2d Cir. 1984); United States v. $129.374 in United States Currency, 769 F.2d 583 (9th Cir. 1985), cert. denied sub nom., Geiger v. United States, 474 U.S. 1086 (1986); and United States v. Timbers Preserve, Routt County. Colo., 999 F.2d 452 (10th Cir. 1993).

Application of the doctrine here, however, where taxpayer remains a fugitive of his volition, is an altogether different proposition. He could choose to submit to the jurisdiction of the District Court in New Jersey, but he has not done so. Any sanction would not be as a result of his former status as a fugitive, but rather as a result of his present status as a fugitive -- which is within his power (and only his power) to change.

*23 The Tax Court conditioned dismissal of his application, providing that it would vacate the decision "if, within 30 days after service of the order of dismissal and decision, petitioner submits himself to the jurisdiction of the federal courts for purposes of answering the charges for which he has been indicted." This opportunity is strikingly similar to the Texas statute the Supreme Court upheld in Estelle v. Dorrough, 420 U.S. 534 (1975), which provided for automatic appellate dismissal if a defendant escapes during the pendency of appeal, unless he voluntarily returns within ten days. To be sure, application of the fugitive disentitlement doctrine may be viewed in this regard as coercive to some extent, but it is not inappropriate to hold that a fugitive is entitled to litigate the issues concerning his right to property involved in the alleged criminal conduct only if he faces the underlying charges. Indeed, providing an inducement to surrender to the authorities is in itself a valid justification for application of the doctrine where the defendant remains a fugitive. See Estelle, 420 U.S. at 537 (state statute providing for automatic dismissal of appeal if a defendant escapes during the pendency of his appeal unless he returns within 10 days discourages escape and encourages voluntary surrender).

On remand, the Tax Court considered both the decision in Ortega-Rodriguez and this Court's opinion expressing reservations about its effect on this case. The Tax Court reiterated its conclusion that dismissal of taxpayer's petition was appropriate. *24 (JA-32.) in doing so, it first noted that he "[a]lthough aware that he has been under indictment for some time, [taxpayer] has not attempted to surrender himself to the proper authorities to face the charges." (JA-20.) The court then recognized that Ortega-Rodriguez addresses the different situation where (JA-28) "the erstwhile fugitive is apprehended or otherwise surrenders prior to the commencement of the appeal from his criminal conviction" (JA-31):

Orteqa-Rodriguez involved the question of the propriety of applying the fugitive disentitlement doctrine against a defendant who was no longer a fugitive. In contrast, [taxpayer] in the instant case is attempting to prosecute his petition for redetermination in this court while he remains a fugitive from justice. Although Ortega-Rodriguez includes a broad discussion of the fugitive disentitlement doctrine and the rationales underlying the rule, we do not glean from that opinion an intention to overrule the long line of cases applying the fugitive disentitlement doctrine in civil proceedings (such as the instant case) where the defendant remains a fugitive.

In the initial appeal of this case (Friko, 26 F.3d at 1143), this Court remanded the case for the Tax Court to consider how Ortega-Rodriguez "affect [s] the use of the fugitive disentitlement doctrine to this case." The answer is that Ortega-Rodriguez has no effect on the application of the doctrine here, because it applies only when the defendant is not a fugitive at any point during the proceeding that is being dismissed, and taxpayer in this case remains a fugitive to this day. Thus, this Court's comment in Friko (26 F.3d at 1143) that "it is not apparent what the connection was" misapprehends the *25 scope of the Court's opinion in Ortega-Rodriguez. The connection was and is his current fugitive status. That is sufficient.

This Court also recognized in Friko (26 F.3d at 1143) that--

[d]ismissal because of the litigant's fugitive status is, in any event, a sanction imposed on the basis of the particular court's exercise of its inherent authority. * * * [T]he particular court invoking the doctrine has some leeway to see things differently than other courts, including this one.

In this case, the Tax Court has reconsidered its opinion and affirmed its conclusion that it had the discretion to dismiss taxpayer's case. See Tax Court Rule 123(b) (the court may dismiss a case at any time for failure to prosecute or to comply with the Rules or orders of the Court "or for other cause which the Court deems sufficient"). This Court should defer to the Tax Court's view of the scope of its discretion on this matter, where Ortega-Rodriquez does not change the rule that dismissal of a current fugitive's appeal is appropriate under the unchanged Molinaro rule.

D. The fugitive disentitlement doctrine applies to civil suits as well as to criminal appeals

Since Molinaro, courts have extended the fugitive disentitlement doctrine -- originally applied to appeals challenging criminal convictions -- to bar a fugitive from participating in civil suits as well. See, e.g., Ali v. Sims, 788 F.2d 954, 958-959 (3d Cir. 1986) (refusing to remand for a new trial on damages because plaintiff was a fugitive: "in this age of overcrowded dockets and court backlogs, it is unreasonable *26 to expect a court to expend its scarce resources on one who has blatantly disregarded the court's procedures"); Schuster v. United States, 765 F.2d 1047 (11th Cir. 1986) (doctrine applied against plaintiff challenging a notice of termination assessment of income tax on the grounds that she was designing to conceal her property or transfer it, where she had been indicted for violations of federal narcotics and currency reporting laws arising from a scheme to launder money from the proceeds of cocaine sales, and a bench warrant had been issued for her arrest); United States v. $129,374 in United States Currency, 769 F.2d 583, 587-588 (9th Cir. 1985), cert. denied sub nom., Geiger v. United States, 474 U.S. 1086 (1986) (disentitlement doctrine applies in civil forfeiture proceeding to bar fugitive and fugitive's successor from contesting forfeiture while resisting prosecution in a related criminal action: an individual who "flouts" the legal process "has no entitlement to engage the court's resources to adjudicate his claims in an action related to his prior criminal conviction"). See also United States v. Contents of Account Numbers 3034504504 and 144-07143 at Merrill. Lynch. Pierce, Fenner and Smith. Inc., 971 F.2d at 986 n.9 (stating in dicta that "we believe the holding * * * that fugitive disentitlement does apply in forfeiture proceedings is persuasive").

Indeed, the rationale that an individual who flouts the judicial system should not be permitted to use the courts for his benefit is not limited to criminal cases, but should apply with *27 even greater force to civil cases, where only the individual's money and not his liberty is at stake. See Doyle v. United States Department of Justice, 494 F. Supp. 842, 845 (D.D.C. 1980) ("[i]f the courts may invoke their inherent equitable powers to refuse to entertain appeals from fugitives who are seeking to overturn criminal convictions, they surely may do so likewise with respect to those fugitives who merely seek relief under the Freedom of Information Act"), aff'd, 668 F.2d 1365 (D.C. Cir. 1981) (so long as plaintiff "remains a fugitive from federal justice he may not call upon the resources of the court to adjudicate his claim"), cert. denied, 455 U.S. 1002 (1982); Conforte v. Commissioner, 692 F.2d 587, 589-590 (9th Cir. 1982). But see United States v. S40.877.59, 32 F.3d 1151 (7th Cir. 1994); United States v. $83.320 in United States Currency, 682 F.2d 573 (6th Cir. 1982).

As the courts in these cases correctly recognized, an individual who defies the judicial system should not at the same time be permitted to use the courts for his benefit. [FN18] *28 Allowing taxpayer in the case at bar to proceed with his case in the Tax Court while remaining a fugitive would be tantamount to permitting him to use the federal judicial system for his own purposes but to choose not to comply with orders of that system when he perceives it to be against his interests to do so. See Schuster v. United States, 765 F.2d at 1050 (" [approximately 3 years have passed and she has still not reappeared to avail herself of this country's judicial system insofar as it might hurt her, but she has had no compunction about requesting the resources of this country's courts insofar as they might help her").

FN18. At least one court, however, refused to invoke the doctrine where the fugitive's lawsuit was more in the nature of a response to a governmental action rather than an affirmative assertion of rights in which he invokes the processes of the court, and where there was an insufficient showing that the property sought to be forfeited was related to the criminal action resulting in the defendant's fugitive status. See, e.g., United States v. Pole No. 3172. Hopkinton,852 F.2d 636, 643 (1st Cir. 1988); United States v. Sharpe, 470 U.S. 675, 681 n.2 (1985) (suggesting in dicta that dismissal of an appeal or a petition for a writ of certiorari is not mandatory when the fugitive is not the party seeking review). We submit, however, that dismissal is appropriate in such instances because the fugitive/defendant has the ability to surrender himself to the proper

authorities and end his fugitive status, thus reinstating his access to the courts. Indeed, the thrust of the Court's opinion in Ortega-Rodriguez is that one who is no longer a fugitive does, in fact, have renewed access to the courts even though one who remains a fugitive does not.

In the instant case, the 1990 criminal indictment against taxpayer (and, originally, Friko) for conspiring to engage in.and carrying out a money laundering scheme in violation of 18 U.S.C. § 371 (conspiracy) is related to the tax assessments for unreported U.S.-source income in years 1985-1989 made against Friko and taxpayer. After the indictment, the Government filed a complaint in the District of New Jersey for civil forfeiture in rem of two Merrill Lynch accounts in Friko's name. See United States v. Contents of Account Nos. 3034504504 and 144-01743 at Merrill, Lynch, Pierce. Fenner & Smith. Inc., 971 F.2d at 975976. One of those accounts, no. 144-07143, is the same account *29 that forms the basis of the jeopardy assessments made against both taxpayer and Friko. The Commissioner "computed Friko's income based on total deposits to accounts held with Merrill Lynch." [FN19] (See JA-9; Doc. 2, Ex. 1 at 6.) The Tax Court emphasized this link (JA-32):

FN19. The jeopardy assessments against taxpayer and Friko are in the same amounts and for the same tax liability. (See JA-14.) Taxpayer's liability

is based on his status as the alter ego of Friko, the nominal owner of the Merrill Lynch accounts that form the basis of the assessments. (See JA-13.)

[Taxpayer's] alleged money-laundering activities are connected with the tax deficiencies determined by [the Commissioner]. Specifically, the deficiencies that [the Commissioner] determined in this case are based on deposits to an account that [taxpayer] allegedly used to "launder" the proceeds of illegal drug sales. [The Commissioner] determined that those deposits reflect unreported income. In light of this connection between the two matters, it is this court's position that a rational basis exists for applying the disentitlement theory articulated in Molinaro v. New Jersey, 396 U.S. 365 (1970), to preclude [taxpayer] from prosecuting his petition for redetermination in this court. In this regard, we will follow the reasoning of the line of cases including United States v. Eng, [951 F.2d 461 (2d Cir. 1991)]. Sound policy concerns dictate that [taxpayer] should not be permitted to selectively choose the benefits and burdens of the U.S. legal system that will apply to him.

But even if the Tax Court proceeding herein had no relationship to the criminal indictment from which taxpayer is a fugitive, this Court could (and, we submit, should) affirm the Tax Court's dismissal of his petition. The fugitive disentitlement doctrine may be applied even where the case being *30 dismissed is not related to the criminal case from which the applicant is a fugitive, so long as the applicant is currently a fugitive. [FN20] in Doyle v. United States Department of Justice, 668 F.2d at 1365, this Court stated that "the refusal to entertain Doyle's claim under the circumstances presented here is unrelated to the particular statute [FOIA3 Doyle invokes." [FN21] See also Fratus v. United States, 496 F.2d 1190, 1191 (5th Cir. 1974) (appeal from judgment of conviction *31 was dismissed where defendant was a fugitive on two unrelated state criminal charges); United States v. U.S. Commanding Officer, 496 F.2d 324, 325 (1st Cir. 1974) (affirming dismissal of writ of habeas corpus for relief from "a specific Army regulation, the merits of which are irrelevant here" because petitioner was a fugitive); Brin v. Marsh, 596 F. Supp. 1007, 1009 (D.D.C. 1984) (mandamus action to compel discharge from military service and grant of retirement benefits dismissed because plaintiff was fugitive from criminal count of defrauding United States and was charged with absence without leave).

FN20. Some courts have held that the civil case must be related to the criminal matter from which the applicant is a fugitive. See, e.g., United States v. One Parcel of Real Estate at 7707 S.W. 74th Lane. Miami. Dade County. Florida, 868 F.2d 1214, 1216 (11th Cir. 1989); United States v. Pole No. 3172. Hopkinton, 852 F.2d 636, 643 (1st Cir.

1988); United States v. Timbers Preserve. Routt County. Colo., 999 F.2d 452, 454 (10th Cir. 1993) (postOrtega-Rodriguez) (applying the fugitive disentitlement doctrine to a civil forfeiture case where "[t]he civil forfeiture action was closely related to the criminal indictment from which [the fugitive] fled as his criminal drug activities supplied the money to purchase the property at stake in the civil action"); All Funds, 801 F. Supp. at 999. Other courts, however, while noting that the criminal and civil cases are connected, have not mandated that such a connection exist as a prerequisite for application of the doctrine. See, e.g., United States v. $129.374 in United States Currency, 769 F.2d at 558 (9th Cir. 1955) (not deciding whether doctrine demands a "nexus requirement" between criminal and civil cases); Schuster v. United States, 765 F.2d at 1049 (11th Cir. 1985) ("no question that the civil case here at issue * * * is related to the criminal case"); United States v. $45.940 in United States Currency, 739 F.2d 792 (2d Cir. 1984) (criminal prosecution was for illegally importing the money subject to forfeiture in civil case); Conforte v. Commissioner, 692 F.2d at 590 (9th Cir. 1982) (declining to decide whether the civil case must be related to the criminal case because fugitive's conviction for attempted tax evasion and his tax court appeal "are each related components of a general tax evasion scheme").

FN21. The court "noted" that Doyle's FOIA suit was "not devoid of relationship to the sentence he is evading," but clearly implied that that fact was not relevant to its holding. 668 F.2d at 1365.

Application of the fugitive disentitlement doctrine requires, of course, that the person who has fled (or constructively fled) knows that he is wanted by the authorities and then fails to submit to arrest. See United States v. Pole No. 3172. Hopkinton, 852 F.2d at 644; United States v. $45.940 in United States Currency, 739 F.2d at 796 ("though he had notice of the criminal proceeding, he has not reported to the United States Consulate * * *); United States v. Schreiber, 535 F. Supp. 1359, 1363 (S.D.N.Y. 1982) (individual who left the country in 1964 became a fugitive in 1966 when he learned he was under indictment and made no effort to return). There is no question in the case at bar that taxpayer is aware of the criminal charges pending against him, but he has not submitted to the jurisdiction of the United States District Court for the District of New Jersey. Accordingly, there is no reason why the fugitive disentitlement doctrine should not apply to this civil tax case.

*32 E. The fugitive disentitlement doctrine applies to persons who have been indicted but not convicted

A conviction is not necessary for someone to be a fugitive from justice. See Dawkins v. Mitchell, 437 F.2d 646 (D.C. Cir. 1970) (upholding dismissal of civil suit of plaintiffs, who had not been convicted of any charge; one appellant was "a fugitive from a bench warrant" issued by a district court); United States v. Real Property at Incline Village, 47 F.3d at 1516 (affirming entry of judgment against defendant in a civil forfeiture suit where he was indicted but not convicted of drug charges, he was a Swiss citizen residing in Switzerland, and had not shown that he had made a good-faith effort to return to face the charges); United States v. One Parcel of Real Estate at 7707 S.W. 74th Lane, Miami. Dade County, Florida, 868 F.2d at 1216 (upholding dismissal of civil forfeiture action brought by plaintiff who had been indicted for narcotics trafficking, had a warrant issued for his arrest, was residing in Colombia, South America, and refused to appear personally in the action); Schuster v. United States, 765 F.2d at 1050; In re Special Grand Jury 81-1, 697 F.2d 112 (4th Cir. 1982) (en banc) (per curiam) (withdrawing published opinion at 676 F.2d 1005 (4th Cir. 1982), which granted relief to a grand jury target who sought review of an order denying a motion to quash a grand jury subpoena issued to the target's attorney, and dismissing the appeal because the Court was "advised that the target of the investigation * * * has been indicted and is a fugitive from justice"). Thus, the fact that taxpayer has not yet been convicted of any crime charged in the *33 indictment is not a bar to application of the fugitive disentitlement doctrine to this case.

Taxpayer nevertheless suggests (Br. 14-15) that, in order to be a fugitive, one must have been present in a jurisdiction and then left it, and contends that he does not fall within that description. But taxpayer's argument fails for want of a valid premise. Two of the cases on which taxpayer relies (Br. 12- 13) (United States v. Mittleider, 835 F.2d 769 (10th Cir. 1987), cert. denied, 485 U.S. 980 (1988), and Gee v. State of Kansas, 912 F.2d 414 (10th Cir. 1990)) are construing criminal statutes regarding fleeing a jurisdiction (18 U.S.C. § 921(a)(15) (statute defining fugitive from justice for criminal purposes as "any person who has fled from any State to avoid prosecution for a crime or to avoid giving testimony in any criminal proceeding") and § 3182 (extradition statute)). Those cases do not, therefore, consider whether absence from a jurisdiction and a failure to submit to the jurisdiction would satisfy the applicable statutory standard in those cases, much less the standard in a civil case, such as this one. The Seventh Circuit did so state, in United States v. $40.877.59, 32 F.3d at 1156, (citing United States v. Marshall, 856 F.2d 896 (7th Cir. 1988)), and held that, in order to be a "fugitive" in that Circuit, one must have committed a crime while in the state and then left that state with the intent to avoid prosecution. in Marshall, however, that court recognized (856 F.2d at 897) that this Circuit (as well as the Eighth Circuit) has held that "mere *34 absence from the jurisdiction in which the crime occurred, regardless of intent, is sufficient to toll the statute of limitations." See McGowen v. United States, 105 F.2d 791 (D.C. Cir.), cert. denied, 308 U.S. 552 (1939).

Other courts considering fugitive cases have found that a person can be a fugitive merely by being absent from the jurisdiction, with knowledge of the criminal charges, and failing to submit himself to that jurisdiction. In Jhirad v. Ferrandina, 536 F.2d 478, 483-484 (2d Cir.), cert. denied, 429 U.S. 833 (1976), for example, the Second Circuit held that "an intent to flee from prosecution or arrest" under 18 U.S.C. § 3290 (tolling statute of limitations for criminal cases when defendant has been a fugitive from justice) encompasses the notion of "constructive flight," i.e., absence with intent to avoid prosecution. The court stated that there was no meaningful distinction between those who leave the jurisdiction and those who have already left and decline to return. See also United States v. 218 Panther Street, Newfoundland, Pa., 745 F. Supp. 118, 121 (E.D.N.Y. 1990), aff'd sub nom., United States v. Enq, 951 F.2d 461 (2d Cir. 1991) (a person "constructively flees" when, while legally outside the jurisdiction,.he decides not to return once he learns of the criminal proceeding). Cf. United States v. Catino, 735 F.2d 718, 722 (2d Cir.), cert. denied, 469 U.S. 855 (1984) (under statute tolling criminal statute of limitation where defendant has fled from justice, "[t]he intent to flee from prosecution or arrest may be inferred from a person's failure to surrender to *35 authorities once he learns that charges against him are pending"); United States v. Ballesteros-Cordova, 586 F.2d 1321, 1323-1324 (9th Cir. 1978) (intent to avoid prosecution, making an individual a fugitive, can be inferred where he knows the authorities want him and he fails to surrender).

In Schuster v. United States, 765 F.2d 1047, the Eleventh Circuit affirmed the district court's dismissal of a petition for review of a termination assessment under 26 U.S.C. § 7429. Schuster was indicted for violations of federal narcotics and currency reporting laws on June 24, 1982. Five days later, upon learning that Schuster was traveling outside the United States and had contacted her bank to request that her funds be transferred to Switzerland, the IRS mailed Schuster a notice of termination assessment of income tax on the grounds that she was designing to conceal or transfer her property, and that, therefore, the IRS was terminating her taxable year on June 30, 1982, and assessing income tax due for the first six months of 1982. The termination letter also informed Schuster of her rights to administrative and judicial review under § 7429. She eventually filed a petition in the district court seeking review of the termination assessment. The district court dismissed the petition, however, because Schuster was a fugitive from justice. The Eleventh Circuit affirmed. [FN22] The court rejected *36 Schuster's argument that, since she had only been indicted and not convicted, the doctrine did not apply. 765 F.2d at 1050. It also held that, although she did not leave the country with the intent to avoid prosecution (since she left prior to the indictment), she had "constructively fled," i.e., she was absent from the country with intent to avoid prosecution.

FN22. In doing so, it noted that the civil tax case was related to the pending criminal charge. 765 F.2d at 1049. It did not decide, however, that such connection was a prerequisite to invocation of the doctrine.

Similarly, the Ninth Circuit recently held that a Swiss citizen who left the United States and resettled in Switzerland before he was indicted was nevertheless a fugitive from justice because he refused to submit to authorities when he learned of the charge against him. United States v. Real Property at Incline Village, 47 F.3d at 1514-1515 (9th Cir. 1995).

Moreover, we note, as did the Tax Court (JA-30), that given electronic funds transfers and other technologically sophisticated banking transactions, a person acting from outside a jurisdiction can commit crimes (such as money laundering) within a jurisdiction. To insulate such a criminal from the effects of being a fugitive from justice simply because the crime could be committed without a physical presence n the state would not serve the interests of justice. Thus, the Tax Court correctly held (JA-30) that there was "no need to consider whether [taxpayer] fled the country in some literal sense."

The doctrine also applies when the fugitive fled from a different jurisdiction or sovereign from that hearing the case in which the Government is invoking the doctrine. See, e.g., Broadway v. City of Montgomery, 530 F.2d 657 (5th Cir. 1976) (in *37 refusing to hear appeal from a fugitive from state process who sought damages and injunctive relief from an allegedly illegal state wiretap, the court stated, "[i)t is immaterial that the custody from which he fled is that of another sovereign").

Taxpayer may be considered a fugitive even if he has a legal impediment to entering the United States (such as the lack of a visa). in United States v. $45.940 in United States Currency, 739 F.2d at 795-796, the fugitive was a Canadian citizen and resident who was barred from re-entering the United States unless he obtained permission. In that case, Terry McKay, a Canadian resident, was stopped by a border patrol agent because he was travelling on a road that did not lead to a border inspection station. There he completed a customs declaration wherein he failed to report that he was in possession of $45,940, which the Government seized. He was involuntarily deported from the United States after serving 10 days in prison for the crime of illegally entering the United States. Several months after the deportation, McKay petitioned for remission of the forfeited $45,490. Thereafter, McKay was indicted for violating 18 U.S.C. 5 1001, making a false statement to the United States Customs Service when he entered the country (i.e., that he did not possess over $5,000 when he actually had $45,490). McKay refused to appear at his arraignment on this criminal charge, on the ground that he would be in violation of immigration laws, which barred him from entering the country for a certain time after his deportation. The district court nevertheless concluded that *38 McKay was a fugitive from justice, and granted the Government's motion for judgment on the pleadings.

On appeal, McKay argued that he was not a fugitive because he was involuntarily deported from this country and was prohibited from reentering within five years without obtaining permission from the Attorney General (through the United States Consulate), and that the United States must extradite him to try him on the criminal charge. The Second Circuit concluded (739 F.2d at 795-796) that McKay was a fugitive from justice because (1) he had a "burden * * * to seek permission to apply for admission to the United States, even for the limited purpose of appearing at his arraignment," and (2) his intent to flee from prosecution could be inferred by his failure to contact the United States Consulate to seek approval for his admission to the United States in order to appear at his arraignment. The court then held (739 F.2d at 798) that McKay had waived his right to due process in the civil forfeiture proceeding by remaining a fugitive.

McKay's situation is almost identical, in relevant part, to that of taxpayer in this case: both are aliens; both permanently reside in a foreign country; both had left the United States prior to the criminal indictment; both apparently had no intention to return to the United States absent the criminal charge; and neither had a legal right to enter the country. As the Second Circuit concluded, those facts did not preclude application of the fugitive disentitlement doctrine. See also *39 United States v. Catino, 735 F.2d at 722 ("Although Catino's imprisonment [in France] prevented him from returning, we do not think he was relieved of a duty to do all he could to return," and therefore his resistance to extradition "constituted a constructive flight from justice"); All Funds, 801 F. Supp. at 998 ("Even where an individual is in prison elsewhere or it is otherwise impossible for him to leave, he can be considered a fugitive"); United States v. Eng, 951 F.2d at 464 ("One may flee even though confined in prison in another jurisdiction").

Thus, the fact that taxpayer allegedly "has never taken any evasive action" (Br. 15) or may not currently have a visa permitting entry into the United States does not mean that taxpayer is not a fugitive, especially in the absence of any proof that he has made every attempt (or, indeed, any attempt) to submit to the jurisdiction of the New Jersey court. See United States v. Real Property Located at Incline Village, 47 F.3d at 1515 ("There is no indication, at any rate, that [fugitive] has at any point during the five years since his indictment made a good faith attempt to submit to the criminal jurisdiction of the Nevada district court").

In short, taxpayer in this case knows that he has been indicted and that a warrant for his arrest was issued in 1990. Despite this knowledge, he has not returned to this country to answer that indictment, nor has he made a concerted effort to do so. The Tax Court correctly found that he is currently a fugitive from justice, and that, as such, he should not be *40 permitted to call upon the resources of the United States judicial system to his advantage while he continues to flout its authority over him.

F. Taxpayer's arguments lack merit

1. Taxpayer's argument (Br. 15-18) that the Tax Court's dismissal of his petition because he is a fugitive from justice violates his Fifth Amendment right to due process is wrong. [FN23] Although a taxpayer generally has the right to seek a review of his asserted tax liability by filing a petition in the Tax Court, he may waive that right. By maintaining his fugitive status, taxpayer has waived his due process right of having the Tax Court consider his petition and redetermine his deficiency. The fact that taxpayer, through his own actions, may not take advantage of the Tax Court remedy to redetermine his deficiencies does not implicate the Fifth Amendment, just as if, *41 for example, taxpayer had filed his Tax Court petition out of time. Moreover, taxpayer had the opportunity to obtain Tax Court review of the Commissioner's determination by submitting himself for arrest and responding to the criminal indictment against him. The Tax Court order specified that it would vacate the dismissal of the petition if, within 30 days of the date of the order, taxpayer "submits himself to the jurisdiction of the Federal courts for purposes of trial on the charges for which he has been indicted." (JA-32-33.)

FN23. Taxpayer asserts on behalf of Friko (Br. 16 n.8, 17, 22) that dismissal of his petition also violates Friko's due process rights in that, even "when" Friko prevails on its petition in the Tax Court, its assets would still be subject to seizure as a result of taxpayer's deficiency, which is now established. Friko, however, is not a party to this appeal. Unless taxpayer is conceding that he is the alter ego of Friko, he lacks standing to assert Friko's due process rights in his own appeal. Moreover, taxpayer's argument on this score ignores the fact that, if the Government seizes property that Friko claims belongs to it and not to taxpayer, Friko may bring a wrongful levy action under 26 U.S.C. § 7426 seeking return of the property (provided it does so in a timely manner). in that action, Friko may seek to establish that it is not taxpayer's alter ego and that its property therefore cannot be used to satisfy taxpayer's established liability. Indeed, two of taxpayer's entities have already brought such an

action and challenged the Government's position that they were his alter egos. See Organization J.D. Ltda. and Manufacturas J.D, Ltda. v. United States (No. 93-4141 E.DN.Y.).

2. Taxpayer asserts (Br. 20-22) that dismissal of his Tax Court petition violates the excessive fines clause of the Eighth Amendment. [FN24] As authority for that proposition (which taxpayer did not raise below [FN25], he cites only one case, Austin v. United States, 113 S. Ct. 2801 (1993). But that case holds only that the excessive fines clause applies to civil forfeiture actions under 21 U.S.C. §§ 881(a)(4) and (a)(7), which provide for the forfeiture of vehicles and real property used, or intended to be used, to facilitate the commission of certain drug-related crimes. The Court specifically declined to "establish a multifactor test for determining whether a forfeiture is constitutionally 'excessive.' " 113 S. Ct. at 2812. *42 It is not surprising, therefore, that the First Circuit in a tax case recently concluded, in McNichols v. Commissioner, 13 F.3d 432 (1st Cir. 1993), cert. denied, 114 S. Ct. 2704 (1994), that the Supreme Court's decision in Austin "does not directly or impliedly suggest that either its holding or statements to the effect that a forfeiture can be an excessive fine under the Eighth Amendment are or should be applicable to any actions other than forfeitures under 21 U.S.C. §§ 881(a)(4) and (a)(7)." As McNichols indicates, the excessive fines clause does not apply to civil tax actions. Cf. Thomas v. Commissioner, 67 T.C.M. (CCH) 2511 (1994) (imposition of additions to tax for fraud does not violate excessive fines clause).

FN24. Taxpayer's unsupported argument (Br. 18-20) that the court's dismissal of his petition is a "forfeiture of estates" is merely a twist on his argument that forfeiture is punitive and violates the United States Constitution. See Austin v. United States, 113 S. Ct. 2801, 2806-2807 (1993).

FN25. Appellants generally are not entitled to raise new arguments on appeal. See, e.g., Singleton v. Wulff, 428 U.S. 106, 119-120 (1976).

At all events, taxpayer makes no attempt to discuss an appropriate test for application of the excessive fines clause or to show that the Tax Court's action falls within the scope of that clause. In the absence of any such discussion or showing, this Court is certainly not required to make the leap that taxpayer requests and assume that the clause applies to dismissal of an action because of the party's fugitive status, and that, if it does, dismissal is "excessive" within the meaning of that clause.

*43 CONCLUSION

For the reasons stated above, the Tax Court's dismissal of taxpayer's petition should be affirmed.