STANLEY, et al v. LYNCH et al

Originally Assigned to: Judge Emmet G. Sullivan


Magistrate G. Michael Harvey

Reassigned to: Judge Timothy J. Kelly

Date Filed: 01/04/2017

Prior to his indictment, conviction and incarceration based on falsified IRS data, Harold Stanley and his wife, Lorane, resided in Oklahoma where he enjoyed a successful career as an electrical engineer working in power plants.

On July 1, 2008, an unknown-named IRS employee made two initial entries in a database related to Harold’s Individual Master File (“IMF”), known to the IRS as the Audit Information Management System (“AIMS”). These entries initiated an attack on him by improperly using procedures created to memorialize, in his IMF, instances when a person elects for IRS to prepare/execute an income tax return for that person.

This two-step procedure, begun in the AIMS database, resulted in falsifying Harold’s 2006 IMF module to reflect: (1.) a purported “RET RCVD DT” (Return Received Date) of a “Substitute For Return” (SFR) on July 1, 2008, and to also show (2.) the term “SFR 150”, bearing a date of July 28, 2008, indicating the creation of an SFR. [Note that, according to IRS records, the SFR was created 27 days AFTER its receipt.]

 A specific “Document Locator Number” (DLN) 49210-888-00000-8 accompanied those two phrases interjected via AIMS into Harold’s 2006 IMF record.

[Note: In 2013, I submitted a Freedom of Information Act (FOIA) request to the IRS asking for copies of the SFRs, shown in my IMF record, with the same DLN. IRS Disclosure Officer Klaudia Villegas responded “The DLN you requested was generated by our Automated Substitute for Return program.  This DLN is computer generated and there is no paper document associated with it. Therefore, there are no documents responsive to your request.”]

That means no return of any sort was received by IRS concerning Harold Stanley on July 1, 2008, the purported Return Received Date. Nor was any substitute income tax return (SFR) prepared on July 28, 2008 on his behalf, contrary to the falsified IMF records.

This is significant because the IRS cannot produce an SFR, the very basis of its income tax assessment, during discovery in any legal proceeding.

On or about August 25, 2008, almost one month after the baseless phrase “SFR 150” was injected into the module for 2006, “Examinations function” employee “Thressa Massey” (Employee ID 49-04438) performed IRS’ initial determination concerning Mr. Stanley. Based on her supposed “examination”, Ms. Massey calculated a “Balance Due” of $69,507.00, which she filled in on Line 19.a. of an “Income Tax Examination Changes” “Form 4549”.

IRS employees would later claim, in a November 4, 2008 Letter 3219, otherwise known as a “Notice of Deficiency”, that the $69,507.00 amount computed by Massey as supposedly due on the Form 4549 was a liability Mr. Stanley allegedly owed the United States Treasury.

Next, IRS issued Form 4340 “Certificate of Assessments, Payments and Other Specific Matters” which alleged that, as of March 31, 2010, Harold had a purported balance due for 2006 of “$105,370.65”.  The letter was signed by a “Michael C. Loughran, Accounting Operations Manager, under authority of Delegation Order KCSPC-11-5-11”.  As the “Certifying Officer”, Mr. Loughran states “I certify the foregoing transcript of the taxpayer named above in respect to the taxes specified is a true and complete transcript for the period stated, and all assessments, abatements, credits, refunds, and advance or unidentified payments, and the assessed balance relating thereto, as disclosed by the records of this office as of the account status date are shown herein.  I further certify that the other specified matters set forth in this transcript appear in the official records of the internal revenue service.”

Notice in his last sentence, however, that Mr. Loughran did not certify that the official records of the IRS were accurate, but, only that the data in Mr. Loughran’s certificate appears in the IRS’ official records concerning Harold and 2006.

Using the fraudulent IMF records, the Service further damaged Harold financially by filing, on August 9, 2012, a fraudulent Letter 3172 “Notice of Federal Tax Lien Filing” in the amount of $105,370.65 for 2006.  The letter states “A lien attaches to all property you currently own and to all property you may acquire in the future.  It also may damage your credit rating and hinder your ability to obtain additional credit.”

Then, on or about August 29, 2012, IRS issued Form 668-A “Notices of Levy” to six (6) entities - Community Bank of Raymore, Electrical Reliability Services, McKinley Paper Company, Mid America Consultants, Inc., Tri-State G&T Associates, Inc., and Wells Fargo Bank, NA.  The fraudulent “notices” alleged that Mr. Stanley owed a total of $132,373.20 for 2006.

Based on the fraudulent records prepared by the IRS, a Grand Jury indicted Harold Stanley for allegedly committing two crimes: 1.) attempting to evade a tax, and 2) corruptly interfering with the collection of a tax.

On May 31, 2016 a jury trial began before U.S. District Court Judge Roseann Ketchmark in the United States Courthouse, 400 E. 9th Street, Kansas City, Missouri.

Despite his best efforts as a Pro Se litigant, on June 2, 2016, Harold Stanley was convicted of 1.) attempting to evade a tax, and 2) corruptly interfering with the collection of a tax.

On November 14, 2016, Harold contacted me by telephone to tell me he was to be sentenced in two days and asked if there was anything I could do to help him. At my request, he hurriedly emailed copies of his IMF records to me to examine for signs of the characteristic, fraudulent 3-digit transaction codes. Immediately after I began my review, I observed the same pattern of transaction codes I had seen in the IMF records for Michael, me, and all of the other Plaintiffs in their lawsuits.

Unfortunately, two days later, on November 16, 2016, Judge Ketchmark stated on the record that she intended to “make an example” of Harold and sentenced him to 5 years in prison on Count 1 and 3 years on Count 2, with the sentences to be served concurrently (at the same time).

He was immediately taken into custody and sent to USP Leavenworth, located in Leavenworth, Kansas. After a few months, however, he was transferred to FCI El Reno, located in El Reno, Oklahoma, where he is currently incarcerated.

On January 4, 2017, Plaintiffs Harold R. Stanley, Michael B. Ellis and Robert A. McNeil filed this lawsuit against the following Defendants: 1) Attorney General Loretta Lynch, 2) President Barack Obama, and, IRS Commissioner John Koskinen, all in personal capacity only.

But, in this case, as in all other lawsuits, Department of Justice attorneys, Federal judges and Magistrates have violated the following criminal statutes: 1) obstruction of the administration of justice (18 U.S.C. §1503); 2) falsifying federal records (18 U.S.C. §1001); and, 3) misprision of felony (18 U.S.C. §4) in order to perpetuate the IRS’ record falsification scheme.

Following is the Docket Sheet containing links to all the documents filed in this case.

U.S. District Court for the District of Columbia

17-00022 Docket Sheet