A former USVI tax director – who is wrapping up a five-year federal prison term for bribery and extortion – has more worries ahead, now that the V.I. Supreme Court struck down his appeal on a separate criminal case.
Late last week, the three-judge panel ruled in the case of Louis Milton Willis (also known as Lolo) vs. People of the Virgin Islands. Justice Maria Cabret wrote the opinion on a case that she heard in oral arguments in March 2018, along with Chief Justice Rhys Hodge and Associate Justice Ive Arlington Swan. In the July 11 opinion the court upheld Willis’ conviction on aiding and abetting willful failure to file taxes.
The case is related to the defendant’s work as director of the Internal Revenue Bureau from July 2000 to December 2006. In 2014 the former director was charged along with Balbo Construction owner Gerald Castor of signing falsified tax clearance letters.
Willis was found guilty on Aug. 25, 2015, of aiding and abetting and conspiracy to defeat or evade taxes. Castor initially pleaded not guilty but later opted for a plea deal, resulting in a one-year suspended sentence.
Prosecutors said Willis prepared tax clearance letters for Castor from 2002 to 2008, signing them himself while bypassing the approval of tax records management supervisor Judith Creighton. Then, prosecutors said, after leaving office Willis prepared tax returns for Balbo Construction and underreported the company’s gross receipt taxes for the years 2002 to 2007.
On Oct. 1, 2015, the court consolidated the convictions into a single count – aiding and abetting. But Cabret, Hodge and Swan upheld both convictions.
The former IRB director appealed his conviction one month later. Several challenges were argued – including whether Superior Court had jurisdiction to try the case, whether prosecuting Willis as IRB director constituted a violation of separation of powers, and if the defendant and his then-codefendant were charged under the proper statutes. The sufficiency of evidence and propriety of jury instructions were questioned, and the defendant claimed the court was in error because it rejected his motion for a judgement of acquittal.
But justices of the appellate court brushed most of Willis’ arguments aside and focused their attention on the jurisdictional claim. Willis’s lawyers argued that because Congress had devised tax laws for the Virgin Islands that mirrored the law of the Internal Revenue Service, violations of the local tax laws were subject to prosecution in U.S. District Court, not the USVI Superior Court.
Cabret, Hodge and Swan pointed to some exceptions. Gross receipt taxes, like the ones that formed the crux of the case against Willis and Castor, are locally administered and subject to provision in the Virgin Islands Code. That meant the charges a jury found the former IRB director guilty of were heard in the proper court of jurisdiction – Superior Court.
They also dismissed the separation of powers argument. Willis argued that issuing tax clearance letters for Castor was within his discretion as IRB Director.
“Willis has not, and indeed cannot, point to any authority in support of the facially preposterous claim that issuing official government documents – here tax clearance letters – containing known falsehoods represents an appropriate exercise of discretion,” the high court wrote.
And at one point in the opinion, the justices cited Castor’s testimony at trial to refute a claim of insufficient evidence.
“The evidence demonstrates Willis acted knowingly and willfully. Castor testified that because of his friendship with Willis, he asked Willis for help in obtaining tax clearance letters, which Willis did – even though both Castor and Willis were aware that Castor was delinquent on his taxes.”
The ruling comes as Willis approaches the end of a five-year-prison term handed down from District Court on St. Thomas in 2015. That sentence is related to federal convictions for bribery and extortion related to contractors hired to renovate the St. Thomas Legislature in 2009.
At the time Willis served as executive director for the first branch of government and was responsible for awarding contracts on the project.