Is it Extortion to Accuse Somebody of Taking Kickbacks
My question involves court procedures for the state of: CA
I was defrauded by the seller of a property that I purchased. I now want to rescind the sale contract and have the money returned to me. He has refused.
About ten years ago, the seller, whom I knew socially, worked for a county government office. He told me how he often received kickbacks in exchange for awarding service contracts to cooperative vendors/providers and asked me if I was interested in bidding on a contract (I was not). The statute of limitations for the county to go after him for corruption has passed, however I believe he would still be liable to the IRS for tax evasion, by failing to report the kickbacks as income.
I know I can't threaten to report him unless he pays me - that would be extortion or blackmail. However, what if we simply included the defendant's prior statement, admitting that he received kickbacks, as character evidence in the complaint that we file, or even in a demand letter? There would be no threat to expose or report him, or to in any way use this info against him if he does not settle. Is there a risk that this could this be interpreted as as blackmail or extortion by a court? I haven't discussed this matter with him since he originally made the statement.
Based on what I've read, character evidence would be inadmissible in this (civil) case, so it would be thrown out later. But at least the other side would know that this is out there.
Thanks in advance.
Re: Mentioning Defendant's Statement Re. Prior Crimes in New Civil Complaint - Extort
You could be found in contempt for knowingly maligning your opponent when it is irrelevant to your complaint. You could be fined, maybe jailed for the enormity of it. Don't do it. If you can't prove your case without that, then put your tail between your legs and kiss your money good bye.
Re: Mentioning Defendant's Statement Re. Prior Crimes in New Civil Complaint - Extort
The information about the kick back is not relevant to your current dispute regarding the property you bought. That being the case, it would be unwise to include it in your complaint. And if all you have for evidence of the kickbacks is some oral statement he gave you 10 years ago I suggest you not mention it to anyone at this point. You could get yourself caught up in a defamation claim and if you cannot prove the claim is true, that could cost you. Note that the IRS will not be interested in going back 10 years on this without some really specific information regarding the kickbacks — amounts he received, from whom, etc. Finally, the timing of releasing this information could end up hurting your case rather than helping it by dinging your credibility. Someone hearing your claim might well think: “cwb says this guy was taking bribes and yet for 10 years cwb said nothing about it. Now all of the sudden he comes out with this claim now. Why? Oh, because cwb is now suing the guy. Might cwb have made this up just to bolster his claim? After all, if it was true why didn't cwb report it to the state 10 years ago? Didn’t he care that the public was getting ripped off? Or does he only now care because he himself is getting ripped off?”
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adjusterjack
You could be found in contempt for knowingly maligning your opponent when it is irrelevant to your complaint. You could be fined, maybe jailed for the enormity of it.
Well, no. While I agree that disclosure of this claim could be a problem if he lacks evidence, what you suggest is not one of the problems he’d face. Contempt of court is the violation of a court order directed at the person being held in contempt. Unless there was a court order in place against the OP that prohibited him from making the disclosure of his claim he would not be facing contempt of court.
Re: Mentioning Defendant's Statement Re. Prior Crimes in New Civil Complaint - Extort
You both bring up good points, however my intent would not be to malign or shame him publically. In fact, probably no one except him and his attorney would see my recollection of his prior statement. I imagine they would object to its inclusion in the complaint, we would remove it and that would be that. He and I both know that he made the statement and I would not be trying to prove it to anyone else. But at least he would know I remember what he said and it would give him food for thought.
Perhaps the IRS would not be interested, however it could be a substantial amount of money he received, and they might find it worth investigating if they received an anonymous tip. He held a fairly high profile position and it probably wouldn't be too difficult to audit a sample of the contracts he approved if they maintain records that far back, which they probably do. The thought of going to prison might cause him to re-evaluate how he does business.
Re: Mentioning Defendant's Statement Re. Prior Crimes in New Civil Complaint - Extort
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cwb
You both bring up good points, however my intent would not be to malign or shame him publically. In fact, probably no one except him and his attorney would see my recollection of his prior statement. I imagine they would object to its inclusion in the complaint, we would remove it and that would be that. He and I both know that he made the statement and I would not be trying to prove it to anyone else. But at least he would know I remember what he said and it would give him food for thought.
Perhaps the IRS would not be interested, however it could be a substantial amount of money he received, and they might find it worth investigating if they received an anonymous tip. He held a fairly high profile position and it probably wouldn't be too difficult to audit a sample of the contracts he approved if they maintain records that far back, which they probably do. The thought of going to prison might cause him to re-evaluate how he does business.
Your rationale is too convoluted and too hypothetical for the actual claims you should be pursuing: unjust enrichment, fraud, breach of contract, breach of fiduciary duty, etc. Toying with the IRS idea so as to leverage your case might still sound in extortion and will obfuscate the presentation of whatever legitimate cause of action (claims) you might have.
Some months ago I read an appellate opinion in the direction of what Taxing Matters pointed out:
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Taxing Matters
if it was true why didn't cwb report it to the state 10 years ago? Didn’t he care that the public was getting ripped off? Or does he only now care because he himself is getting ripped off?”
I can't recall the substance of the case, the court, or state/jurisdiction (sorry, I don't take notes of every judicial opinion I read each month), but denouncing an unrelated offense only when it became convenient didn't help that party's position.
If you want to report him to the IRS, do it regardless of your judicial proceedings. That way you might be prevent others from being defrauded by that person.
Re: Mentioning Defendant's Statement Re. Prior Crimes in New Civil Complaint - Extort
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cwb
my intent would not be to malign or shame him publically.
Bull.
That's exactly what you want to do.
Or you wouldn't be contemplating it.
Re: Mentioning Defendant's Statement Re. Prior Crimes in New Civil Complaint - Extort
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cwb
You both bring up good points, however my intent would not be to malign or shame him publically. In fact, probably no one except him and his attorney would see my recollection of his prior statement. I imagine they would object to its inclusion in the complaint, we would remove it and that would be that. He and I both know that he made the statement and I would not be trying to prove it to anyone else. But at least he would know I remember what he said and it would give him food for thought.
Perhaps the IRS would not be interested, however it could be a substantial amount of money he received, and they might find it worth investigating if they received an anonymous tip. He held a fairly high profile position and it probably wouldn't be too difficult to audit a sample of the contracts he approved if they maintain records that far back, which they probably do. The thought of going to prison might cause him to re-evaluate how he does business.
Actually you are trying to malign or shame him...it's all over your statements.
Re: Mentioning Defendant's Statement Re. Prior Crimes in New Civil Complaint - Extort
Where exactly did I say that I intend to malign him publically? He's a dishonest person who has cheated former employers and taxpayers. I believe this is relevant, though I understand why it's not admissible. In any case, I agree that it's probably not a good idea to mention this is the complaint, although it might make sense to bring up at a later stage. Perhaps I was hoping that mentioning it might make him feel guilty, which could result in a quicker settlement.
Re: Mentioning Defendant's Statement Re. Prior Crimes in New Civil Complaint - Extort
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cwb
You both bring up good points, however my intent would not be to malign or shame him publically. In fact, probably no one except him and his attorney would see my recollection of his prior statement. I imagine they would object to its inclusion in the complaint, we would remove it and that would be that. He and I both know that he made the statement and I would not be trying to prove it to anyone else. But at least he would know I remember what he said and it would give him food for thought.
Complaints filed in court are public record. So if you put it in the complaint, there will be others who will see it (at least the court clerk and judge) and any one in the public would have access to it. So doing that does indeed air the complaint publicly. The press and others routinely go through complaints filed in court to look for interesting cases to report on or to include in various databases, etc. You run the risk that your allegation would indeed take on a life of its own and cause him a great deal of publicity and scorn. Should that happen, you might find yourself facing a defamation lawsuit. And if you can’t prove what you say is true, you could find yourself liable to him for substantial defamation damages.
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cwb
Perhaps the IRS would not be interested, however it could be a substantial amount of money he received, and they might find it worth investigating if they received an anonymous tip. He held a fairly high profile position and it probably wouldn't be too difficult to audit a sample of the contracts he approved if they maintain records that far back, which they probably do. The thought of going to prison might cause him to re-evaluate how he does business.
Two points on that. First, the statute of limitations for prosecution on federal felony tax offenses, including tax evasion, is six years. It is too late for the IRS and DOJ to criminally prosecute him for it. So he doesn’t have the worry of prison over this. Second, all the IRS can do at this point is assess the extra tax he owes plus interest and penalty. That would be expensive for him, but for the IRS to succeed, it needs to prove the amount of the unreported income. Simply sampling the contracts he awarded or had input on awarding won't prove anything about the kickbacks he was allegedly paid. Those kickbacks would not be on the state books, after all. The kickbacks would deliberately be done off the books between him and the person seeking the contracts. If they were at all smart, they likely did it in cash or other hard to trace means of payment that would not link him and the contractor bribing him. It is likely too late at this point to get any bank records for the guy to trace deposits that might point to unreported income. Ten years after the fact most records that might have been available to trace the income are going to be gone. Indeed, very likely the IRS will no longer have his complete tax returns at this point. If all you tell the IRS is “Joe Blow told me 10 years ago he was taking bribes to award state contracts and I'm pretty sure he didn't report that on his returns” that’s not very helpful to the IRS in tracking down the alleged unreported income. As a result, it won’t get much attention given how much work would be needed to develop the case and the likelihood that nothing would come of it because there would be insufficient records to work with at this late date. Had you reported that 10 years ago perhaps the IRS might have acted, and you might have got a nice reward for it, too. But I don’t see that happening a decade later.
Re: Mentioning Defendant's Statement Re. Prior Crimes in New Civil Complaint - Extort
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cwb
Where exactly did I say that I intend to malign him publically? He's a dishonest person who has cheated former employers and taxpayers. I believe this is relevant, though I understand why it's not admissible. In any case, I agree that it's probably not a good idea to mention this is the complaint, although it might make sense to bring up at a later stage. Perhaps I was hoping that mentioning it might make him feel guilty, which could result in a quicker settlement.
You're delusion if you think that will help your case at all, ever.
It won't.