Insufficient Evidence-Filing False Tax Returns

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7^th Circuit Court of Appeals

Case Name: United States of America v. MingQing Xiao

Case No.: 22-2758

Officials: Sykes, Chief Judge, and Hamilton and Brennan, Circuit Judges.

Focus: Insufficient Evidence-Filing False Tax Returns

For several years, Dr. Xiao served as a mathematics educator at Southern Illinois University, while simultaneously conducting academic work with connections to China. This work in China resulted in payments totaling over $100,000. An investigation into Xiao’s grant applications prompted FBI agents to examine his financial affairs. Subsequently, Xiao faced charges related to wire fraud, making false statements, failure to disclose his foreign bank account in his income tax returns, and neglecting to file a mandatory report with the Department of the Treasury.

Following legal proceedings, Xiao was acquitted of wire fraud and making false statements. However, he was found guilty of filing false tax returns and failing to submit a report on a foreign bank account as per 31 U.S.C. 5314(a).

The Seventh Circuit upholds the verdict, dismissing arguments that the evidence presented was insufficient, primarily focusing on the matter of willfulness, the ambiguity of the tax return question, and the purported invalidity of the foreign-account reporting regulation. The evidence provided the jury with ample grounds to reasonably conclude that Xiao had acted willfully by deliberately choosing not to reveal his foreign bank account. As applied to Xiao’s situation, the tax return form was not ambiguous. The government successfully demonstrated, beyond reasonable doubt, that he had engaged in transactions that required reporting. His financial activity in 2019 involved receiving deposits in his Chinese account and executing withdrawals and investments using the same account.

Affirmed

Decided 08/08/23

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