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United States v. Hopkins

United States District Court, D. New Mexico

October 30, 2018

UNITED STATES OF AMERICA, Plaintiff,
v.
MARK HOPKINS; SHARON HOPKINS; and STATE OF NEW MEXICO REVENUE DEPARTMENT, Defendants.

          Kenneth J. Gonzalez United States Attorney Albuquerque, New Mexico and Manuel Paul Lena Herbert W. Linder United States Department of Justice, Tax Division Dallas, TX Attorneys for the Plaintiff.

          Mark E. Hopkins Federal Correctional Institution La Tuna Anthony, Texas Defendant pro se.

          Sharon J. Hopkins Federal Correctional Institution Phoenix Phoenix, Arizona Defendant pro se.

          MEMORANDUM OPINION [1]

         THIS MATTER comes before the Court on Hopkins' Motion for Relief from Order [Doc #164], filed February 27, 2013 (Doc. 167)(“Motion”). The Court denied the Motion, filed by the Defendants Mark Hopkins and Sharon Hopkins (“the Hopkins'”) in an Order, filed September 15, 2014 (Doc. 175)(“Order”). The primary issue is whether the Court should modify its Memorandum Opinion and Order, filed February 14, 2013 (Doc. 164)(“SJ MOO”), granting summary judgment in favor of Plaintiff United States of America against Defendants Mark Hopkins and Sharon Hopkins, based on excusable neglect resulting in a mistake of fact as to the amount for which Defendant Mark Hopkins (“M. Hopkins”) is indebted to the United States. The primary issues which the Court addresses in the SJ MOO are:

(i) whether Plaintiff United States of America may reduce to judgment the outstanding tax assessments for tax years 1996, 1997, 1999, 2000, and 2001 against Defendants Mark Hopkins and Sharon Hopkins, who were convicted of tax evasion for these same years in the United States' case against them, United States v. Mark E. Hopkins and Sharon J. Hopkins, No. CR 09-0863 MCA (D.N.M.); and (ii) whether the United States is entitled to foreclosure on its federal tax liens encumbering the Hopkins' interest in certain real properties located in Eddy County, New Mexico, in partial satisfaction of their tax liabilities owed to the Internal Revenue Service (“IRS”).

SJ MOO at 1-2. The Court granted the Hopkins' Motion for Surreply and their Defendants' Motion for Telephonic Appearance Re: Motion Hearing on January 3, 2013, “for the reasons stated on the record at the hearing.” SJ MOO at 2. Concluding that there were no genuine issues of material fact, and that the United States was entitled to judgment as a matter of law, the Court granted in part and denied in part the United States' Motion for Summary Judgment, filed July 16, 2012 (Doc. 66)(“SJ Motion”). See SJ MOO at 2. The Court concluded that the Hopkins' “have a liberty interest in their right to engage in the common occupation of their choosing, pursuant to Article I, section 8 and the Sixteenth Amendment of the United States Constitution, ” and concluded that “Congress constitutionally can tax the Hopkins' income from the exercise of that right . . . and has not specifically exempted, excepted, or excluded the Hopkins' income from taxation under the Internal Revenue Code . . . .” SJ MOO at 2. Accordingly, the Court concluded that the Hopkins' income from their labor is not exempted from taxation. See SJ MOO at 2. The Court concluded that, in the criminal case against the Hopkins', establishing that the Hopkins' owed the United States a “substantial amount of tax” and that the Hopkins' used “nominees and/or alter-egos to shelter their income from the United States to evade taxes, ” was necessary to the jury's verdict that the Hopkins' were guilty of Criminal Tax evasion for tax years 1996-1997, and 1999-2001. SJ MOO at 2. The Court concluded, therefore, that res judicata prevents the Hopkins' from relitigating those issues in the civil case against them. See SJ MOO at 2. The Court concluded that:

[b]ecause the record establishes that there is no genuine dispute whether the IRS assessments underlying the IRS' federal tax liens on which they seek to foreclose are valid and accurate, and there is no material dispute whether the Hopkins used the Defendants Grace Trust, Shalom Enterprises, Inc., and House of Royale, Inc. as their nominees or alter-egos to shield their assets from the IRS, there is no genuine dispute that the United States is entitled to foreclose on its liens against the subject property and is entitled to summary judgment as a matter of law. Because the United States has agreed with Defendant Bayview Loan Servicing, LLC, that they will equitably divide profits from the sale of Tract #1, the Court denies the United States' Summary Judgment to the extent it seeks the Court to declare that its interest in Tract #1 is prior and superior to any other interest in the property.

SJ MOO at 2-3. Granting summary judgment in favor of Plaintiff United States of America against Defendant Mark Hopkins, the Court ordered that “M. Hopkins is indebted to the United States for $732, 811.61, as of October 19, 2010, for the federal income taxes assessed against him for the tax years 1996, 1997, 1999, 2000 and 2001, plus interest and all statutory additions provided by law until paid.”. SJ MOO at 100. The Court also ordered that, granting summary judgment in the United States' favor against Defendant Sharon Hopkins, “S. Hopkins is indebted to the United States for $123, 670.98, as of October 19, 2010, for the federal income taxes assessed against her for the tax years 1996 and 1997, plus interest and all statutory additions provided by law until paid.”. SJ MOO at 100. The Court remains persuaded that its SJ MOO ruling is appropriate. Accordingly, the Court will not alter its prior ruling. Consequently, the Court will deny the Motion.

         FACTUAL BACKGROUND

         The Court recites the factual background as stated in the SJ MOO. The footnotes associated with the quoted text -- footnotes 2-6 -- are also quoted in full from the SJ MOO. The SJ MOO stated:

In support of its motion, the United States relies on specific pleadings, admitted United States exhibits, and trial transcripts from the Hopkins' criminal case, United States v. Hopkins.[2] Additionally, the United States relies upon a declaration and its IRS exhibits. Finally, the United States relies upon the following undisputed facts:[3]

         1. Federal Income Tax Liabilities and Liens Against Hopkins.

M. Hopkins worked as an emergency room physician and earned significant income. Before 1996, the Hopkins filed federal income tax returns and incurred tax debt that they failed to pay fully. See IRS Notices of Tax Liens, Hopkins Crim. Gov. Ex. 39, filed July 16, 2012 (Doc. 69-1). In 1996, the Hopkins took steps to avoid liability and payment. They met and consulted with several individuals and groups that advocate recognized tax protestor arguments and tactics, and made multiple library visits.
In 1997, M. Hopkins filed an “Affidavit of Citizenship and Domicile” with the Chaves County, New Mexico, Clerk, stating that he is a citizen of the “Texas Republic, ” is a nonresident alien of the United States, and is not required to pay federal income tax. M. Hopkins' Affidavit of Citizenship and Domicile, Hopkins Crim Gov. Ex. 35, filed July 16, 2012 (Doc. 69-2). S. Hopkins filed a similar document. See S. Hopkins' Affidavit of Citizenship and Domicile, Hopkins Crim Gov. Ex. 36, filed July 16, 2012 (Doc. 69-3).
The Hopkins asserted to the IRS that their compensation for labor earned was not income subject to federal income tax. See, e.g., Hopkins' 1996 Form 1040, Hopkins Crim. Gov. Ex. 152, filed July 16, 2012 (Doc. 69-4). In furtherance of their arguments, the Hopkins filed a joint federal income tax “return” that listed “zero income” for tax year 1996, while attaching W-2's showing M. Hopkins' wages as $81, 000.00 and S. Hopkins' wages as $9, 000.00. Hopkins' 1996 Form 1040. The Hopkins' Form 1040, filed jointly, for tax year 1996 reported “0” income, and attached letters and documents to support their tax positions. See Hopkins' 1996 Form 1040 at 5. Hopkins altered the jurat, and attached three signed statements containing tax protest language: “Affidavit of Claims for Exemption and Exclusion from Gross Income of Remuneration, Wages and Withholding, ” “Affidavit of Citizenship and Domicile, ” and “Contract and Declaration of Citizenship.” Hopkins' 1996 Form 1040 Attachments, Hopkins Crim. Gov. Ex. 152, filed July 16, 2012 (Docs. 69-5 and 69-6). Statements attached to the Hopkins 1996 tax return stated: “The income tax is voluntary. We do not wish to volunteer.” Hopkins' 1996 Form 1040 Attachments at & 8, at 6. Also, the Hopkins stated: “We are natural born sovereigns, preamble, de jure Citizen of one of the 50 sovereign Republic, freely associated compact American states.” Hopkins' 1996 Form 1040 Attachments at & 5, at 9. The Hopkins stated that they were sovereign citizens of one of the fifty states, were “not citizen[s] of the United States, ” and were “not subject to jurisdiction of the United States, ” and filed a “Notice of Election to Terminate U.S. Taxpayer Status” and a “Declaration of Independence.” Hopkins Crim. Gov. Ex. 270, filed July 16, 2012 (Docs. 70, 70-1, 70-2, and 70-3); Hopkins Crim Gov. Ex. 37, filed July 16 2012 (Doc. 70-4).
As part of their activities designed to avoid the IRS receiving any of their income for their tax liabilities, the Hopkins set up nominees including two trust --Guadalupe Medical Service Trust (“GMST”) and Grace Trust -- and corporate shells -- Shalom Enterprises, Inc. and House of Royale, Inc. Shalom Enterprises is an Oregon corporation, whose officers were M. Hopkins and S. Hopkins. House of Royale is a Nevada corporation, whose only officer was S. Hopkins. See Default Judgment Against Defendants House of Royale, Inc. and Shalom Enterprises, Inc. at 1-2, filed December 7, 2011 (Doc. 36)(ordering, adjudging and decreeing that House of Royale and Shalom Enterprises are “nominee[s]/alter ego[s] of Mark Hopkins and Sharon Hopkins”).
Hopkins instructed the hospitals or physician staffing groups for which he worked to send his earnings directly to GMST and, later, to Shalom Enterprises. Trans-Mountain Emergency Physicians Group decided to honor an IRS levy for the Hopkins' unpaid income taxes that seized his May 1997 paycheck. M. Hopkins protested, saying his income was exempt. The Trans-Mountain Group's Chief Executive Officer rejected that argument, and M. Hopkins quit. See Hopkins Crim. Doc. 340; Crim. Trial Tr. at 555-560 (Sept. 23, 2010)(Dr. Beohm), filed July 16, 2012 (Doc. 71-5). The Hopkins used these nominee entities for their personal living expenses or transferred funds to other nominees, including Grace Trust and House of Royale. See Mark & Sharon Hopkins, Checks & Cash Written Between Nominee Bank Accounts, Hopkins Crim. Gov. Exs. 313, 314, filed July 16, 2012 (Docs. 71 and 71-1).
Based in part on law that zero returns are not legally considered to be tax returns, see United States v. Rickman, 638 F.2d 182, 184 (10th Cir. 1980)(holding that a tax return asserting that a taxpayer had zero income is not a valid return), the IRS disregarded the Hopkins' return and assessed the couple a frivolous filing penalty of $500.00, see Hopkins Crim. Doc. 340; Crim. Tr. at 625 (Sept. 23, 2010)(Sigler).[4] Hopkins appealed the penalty based on the same arguments that they had made earlier. Despite IRS correspondence and contact, the Hopkins refused to correctly file their 1996 federal income tax return and never filed another income tax return. See Hopkins' Form 4340s, Hopkins Crim. Gov. Exs. 102-103, 105-107, 117-118, filed July 16, 2012 (Docs. 72, 72-1, 72-2, 72-3, 72-4, 73, and 73-1).
To discover the Hopkins' income and assets, the IRS commenced its investigation and audit that included third-party summons of bank records, financial and legal documents, third parties' Form 1099s, and witness interviews. Reviewing the bank deposits, related financial documents and the Form 1099s, the IRS prepared substitutes for return on the Hopkins' behalf, and sent audit results for tax years 1996, 1997, 1999, 2000, and 2001 to the Hopkins. See Hopkins Crim. Gov. Exs. 190-195, filed July 16, 2012 (Docs. 73-2, 73-4, 77, 74-1, 74-2, 74-3, 75, 75-1, 75-2, 75-3, 75-4, 75-5, 75-6, 76, 76-1, and 76-2). The IRS sent notices of deficiency (“NODs”) to both M. Hopkins and S. Hopkins for each of the years at issue. See Hopkins Crim. Gov. Ex. 193 at 6; Hopkins Crim. Gov. Ex. 194 at 16; Hopkins Crim. Gov. Ex. 195 at 16; Hopkins Crim. Gov. Ex. 207. In response to the NODs for 1996 and 1997, the Hopkins asserted, through their representative, that they had not filed returns or submitted to jurisdiction, and therefore had no income subject to tax. See Letter from John B. Kotmair Jr. Re: Notice of Deficiency to James Walsh, IRS District Director (dated Sep. 5, 2000), Hopkins Crim. Gov. Ex. 208, filed July 16, 2012 (Doc. 76-4).
A delegate of the Secretary of Treasury assessed against, and gave notice and demand to, the Hopkins for unpaid income taxes, penalties, statutory additions, and interest for tax years 1996, 1997, 1999, 2000, and 2001. See Hopkins' Form 4340s, Hopkins Crim. Gov. Exs. 102, 103, 105-107, 117, 118. To date, the Hopkins have neglected, failed, and refused to pay the full amount of the federal income tax assessments for these years. Hopkins Crim. Ex. 315, filed July 16, 2012 (Doc. 77), shows that IRS computer transcripts stated the tax liabilities in the amount of $732, 811.61 that M. Hopkins owes under Count Two of the Indictment as of October 19, 2010 -- the time of his criminal trial. See Hopkins Crim. Ex. 315. The table below shows the tax period, the assessment date, the amounts assessed, and the total liabilities that M. Hopkins owes for these periods to October 19, 2010.

TAX PERIOD

DATE ASSESSED

ASSESSED AMOUNT

AMOUNT DUE AS 10/19/2010

1996

12/25/2000

$146, 925.70

$264, 967.60

1997

12/25/2000

$133, 650.22

$247, 364.21

1999

12/25/2000

$48, 271.85

$73, 108.56

2000

12/25/2000

$50, 205.71

$72, 626.54

2001

06/05/2004

$50, 338.72

$74, 744.70

TOTAL

$732, 811.61

The balance due has increased since that date, and shall continue to increase by statutory additions and accruals until paid.
During 1996 and 1997 tax years, S. Hopkins had income requiring her to file federal income tax returns. As New Mexico is a community property state, S. Hopkins also received taxable income computed on a community property basis. S. Hopkins did not, however, file federal income tax returns for the 1996 and 1997 tax years. Accordingly, after reviewing the bank deposits, related financial documents, and the Form 1099s, the IRS prepared substitutes for return on behalf of S. Hopkins, and sent audit results and NODs for tax years 1996 and 1997 to the Hopkins. See Notice of Deficiency, Hopkins Crim. Gov. Ex. 207, filed July 16, 2012 (76-3).
A delegate of the Secretary of the Treasury assessed against, and gave notice and demand to, S. Hopkins for unpaid income taxes, penalties, statutory additions, and interest for tax years 1996 and 1997. See IRS Form 4340s, Hopkins Crim. Gov. Exs. 117, 118. To date, S. Hopkins has neglected, failed, and refused to pay the full amount of the federal income tax assessments for these years. The table below shows the tax period, the assessment date, the amounts assessed, and the liabilities that S. Hopkins owes for these periods to October 19, 2010. See Hopkins Crim. Gov. Ex. 315 (stating the tax liabilities at issue in Count Two of the Indictment that S. Hopkins owed at the time of her criminal trial).

TAX PERIOD

DATE ASSESSED

AMOUNT ASSESSED

AMOUNT DUE AS 10/19/2010

1996

12/25/2000

$39, 914.38

$72, 496.21

1997

12/25/2000

$27, 794.92

$51, 174.77

TOTAL

$123, 670.98

The balance due has increased since that date, and shall continue to increase by statutory additions and accruals until paid. Thus, the IRS required the Hopkins to file federal income tax returns for the tax years at issue: $242, 070.00 in tax year 1996; $202, 662.00 in 1997; $64, 233.00 in 1999; $74, 357.00 in 2000; and $93, 157.00 in 2001. See Hopkins Crim. Gov. Ex. 192 at 4; Hopkins Crim. Gov. Ex. 192 at 4; Hopkins Crim. Gov. Ex. 193 at 9; Hopkins Crim. Gov. Ex. 194 at 2; Hopkins Crim. Gov. Ex. 194 at 2.[5]
On July 6, 2004, August 3, 2004, July 12, 2005, and December 13, 2005, the IRS filed Notices of Federal Tax Lien for M. Hopkins' federal income tax liabilities for the tax years at issue with the County Clerk of Eddy County, New Mexico. On September 3, 2009, the IRS filed a Notice of Federal Tax Lien for S. Hopkins' federal income tax liabilities for tax years 1996 and 1997 with the County Clerk of Eddy County. See Hopkins Form 668s, Notices of Federal Tax Liens, filed July 16, 2012 (Doc. 77-2).
In May, 2010, the IRS filed Notices of Federal Tax Lien against the Hopkins' nominees -- Shalom Enterprises and House of Royale -- as the Hopkins' nominees and/or alter egos for the Hopkins' federal income tax liabilities for the years at issue with the County Clerk of Eddy County. See Nominees Form 668s, Notices of Federal Tax Liens, filed July 16, 2012 (Doc. 77-3).

         2. The Hopkins' Real Property on Which the United States Wants to Foreclose.

At a time when they owed income taxes and federal tax liens existed, the Hopkins acquired properties in the names of nominee entities to avoid IRS collection. As part of the tax conspiracy and evasion for which they were convicted in the United States' criminal case against them, M. Hopkins and S. Hopkins used nominees to acquire their home and adjoining real properties as a way of keeping their assets and ownership interests hidden from the IRS. See Hopkins Crim. Gov. Ex. 331, filed July 16, 2012 (Doc. 77-4)(a plat map with the Hopkins' real estate at issue). The nominees -- Shalom Enterprises and House of Royale -- held title in their name to the four real estate tracts at issue in this case. In April 22, 1997, M. Hopkins filed or caused to be filed with the Chaves County, New Mexico, Clerk several documents, each of which is identified as a “common law contract and declaration, ” and purports to establish several trusts, including the Grace Trust. See Grace Trust, Hopkins Crim. Gov. Ex. 42, filed July 16, 2012 (Doc. 78).

         a. Tract #1-601 N. Canyon.

In November 2001, when the Hopkins owed federal income taxes, M. Hopkins wrote a check for $14, 589.23 from the Grace Trust account as a down payment to acquire 601 N. Canyon in Carlsbad, New Mexico. Tract #1, located at 601 N. Canyon, is more fully described as follows: “Lots 11 and 13, Block 66, Lowe Addition to the City of Carlsbad, Eddy County, New Mexico as shown on the official plat thereof on file in the office of the County Clerk of Eddy County, New Mexico, ” referring to MAP # 246-66-13, LOC 601 N. Canyon Street. They used Grace Trust to hold title to the property, which served as their principal residence.
In the Fall of 2007, the Hopkins' attempt to refinance their home was temporarily delayed when the title company refused to issue a clear title, because Grace Trust was a “pure trust, ” and not insurable as a borrower or as an owner. According to the title company, the home first needed to be transferred into an entity, a person, or an entity like a corporation. S. Hopkins then directed the nominal trustees of Grace Trust to transfer title to a different nominee -- House of Royale -- to effect the mortgage acquired from Interbay Funding, LLC, and the title to 601 N. Canyon ultimately vested from Grace Trust to House of Royale. See Hopkins Crim. Doc. 340; Crim. Trial Tr. at 607 (Sept. 23, 2010)(Cliff Currier), filed July 16, 2012 (Doc. 78-1); Hopkins Crim Gov. Ex. 34 (Docs. 78-2, 78-3, 78-4, 78-5, and 78-6). On May 28, 2010, a nominee Notice of Federal Tax lien was filed in the Eddy County property records against House of Royale as the Hopkins' nominee and/or alter ego for their unpaid federal income tax liabilities for tax years 1996, 1997, 1999, 2000, and 2001. See Entity Form 688s, Notices of Federal Tax Lien.

         b. Tract #2: 605 N. Canyon.

In October, 2002, M. Hopkins purchased 605 N. Canyon Road in Carlsbad in the name of Shalom Enterprises for a $1, 000.00 down payment on a $21, 500.00 purchase price. See Hopkins Crim. Doc. 340; Hopkins Crim. Gov. Ex. 32; Crim. Trial Tr. at 535-536 (Sept. 23, 2010), filed July 16, 2012 (Doc. 79). Tract #2 is more fully described as follows: Lowe Addition, Block 65, LOT 9, MAP# 246-66-9, 605 N. CANYON.

         c. Tract #3: 607 N. Canyon.

In April, 2002, M. Hopkins purchased 607 N. Canyon Road in Carlsbad in the name of Shalom Enterprises. See Crim. Trial Tr. at 533-534 (Sept. 23, 2010)(Hopkins Crim. Doc. 340), filed July 16, 2012 (Doc. 79-2); Hopkins Crim. Doc. Ex. 31, filed July 16, 2012 (Doc. 79-3). Tract #3, located at 607 N. Canyon Road in Carlsbad, is more fully described as follows: Lowe Addition, Block 65, LOT 7, MAP# 246-66-7, 607 N. CANYON. On May 28, 2010, a nominee Notice of Federal Tax lien was filed in the Eddy County property records against Shalom Enterprises, as nominee/alter ego of M. Hopkins and/or S. Hopkins for the Hopkins= unpaid federal income tax liabilities for tax years 1996, 1997, 1999, 2000, and 2001. See Nominees Form 688s, Notices of Federal Tax Lien.

         d. Tract #4: 602 N. Canyon/108 & 110 W. Bonbright.

In November, 2003, M. Hopkins sought to acquire 602 N. Canyon Road, as well as 108 and 110 W. Bonbright, in Carlsbad, in the name of Shalom Enterprises. Tract #4, located at 602 N. Canyon Street and 108 & 110 W. Bonbright, is more fully described as follows: Lowe Addition, Block 65, LOT 14, Book 532, Page 230, MAP# 246-65-14, 602 N. CANYON. Advanced Electronics, a New Mexico partnership, owned the land on a commercially zoned tract consisting of a two-bedroom home and two two-bedroom homes on one commercial corner lot. Hopkins entered into a New Mexico real estate contract with Advanced Electronics for the property; the original note was $45, 000.00 at 7% interest with a balloon payment due November 15, 2012. On November 15, 2010, WestStar Escrow, on behalf of Advanced Electronics, sent a default notice to Shalom Enterprises for nonpayment; Shalom Enterprises owed $35, 789.19 at the time and did not cure the default.

         3. Defendants New Mexico Department of Taxation and Revenue and Bayview Loan Servicing, LLC.

On August 15, 2006, Taxation & Revenue filed a Notice of Claim of Lien against M. Hopkins. Bayview Loan intends to establish the validity and default on a promissory note that House of Royale made, signed in November, 2007, by S. Hopkins as director, which, under New Mexico law, was a properly perfected security interest on the real property located at 601 North Canyon. Bayview Loan has a pending state court action against House of Royale, S. Hopkins, and the United States (IRS) in the Fifth Judicial District Court, Eddy County, State of New Mexico. See Fifth Judicial District Court of New Mexico, Case No. D-503-CV-201100096.

         4. Criminal Case.

The Hopkins were indicted and convicted of conspiracy and tax evasion. The grand jury indicted the Hopkins on one count of conspiracy and multiple counts of tax evasion. The tax evasion counts related to tax years 1996, 1997, 1999-2007. In particular, Count Two of the Indictment charged the Hopkins with tax evasion for tax years 1996, 1997, 1999, 2000, and 2001. To gain the conviction on tax evasion, the United States proved beyond a reasonable doubt all elements.
In particular, to prove the first element of tax evasion, the United States proved that the Hopkins had income, subject to tax, in each year charged. Further, with its investigations and audits, the United States provided evidence of the amounts of income that the Hopkins earned and the specific tax that was due on that income. The IRS also introduced its Form 4340s and evidence that it made valid assessments of tax. Hence, the jury necessarily decided that the Hopkins owe substantial income tax.
To prove tax evasion, the United States also proved the third element: that the Hopkins used nominees to evade or to defeat the tax owed. Again, the United States was successful in presenting the evidence of the Hopkins' use of “pure” trusts and corporate shells while retaining dominion and control of these entities to funnel monies and to conceal their assets, including their home and real estate. The jury's verdict in finding the Hopkins guilty of Count Two's tax evasion necessarily determined that the entities were nominees that the Hopkins used.
At the Hopkins' criminal trial, the United States proved that the Hopkins earned significant income, but failed to report it and used nominees in their illegal attempt to avoid paying any income tax. The Hopkins testified at their trial. In the Hopkins' criminal trial, the jury instructions, essential to the verdict, were provided to the jury as follows:
INSTRUCTION NO. 3
2. From at least 1996 to the present, MARK E. HOPKINS worked as an emergency room doctor for various medical staffing companies in New Mexico. Since January 1, 1996, MARK E. HOPKINS has earned at least $3, 616, 134 in business income from these medical staffing companies, including the Schumacher Group, which paid him for services that he performed as an emergency room physician at hospitals in the region that includes Carlsbad Medical Center.
4. MARK E. HOPKINS and SHARON J. HOPKINS have failed to file personal federal tax returns since tax year 1997.
5. To assist in their tax evasion scheme, MARK E. HOPKINS and SHARON J. HOPKINS created a number of entities that the couple used to conceal their assets, including:
i) Shalom Enterprises, Inc. (“Shalom Enterprises”), an Oregon corporation, whose officers were MARK E. HOPKINS and SHARON J. HOPKINS.
ii) House of Royale, Inc. (“House of Royale”), a Nevada Corporation, whose only officer was SHARON J. HOPKINS.
v) The Grace Trust, a purported trust whose purported trustees were V.A. and S.S.
Manner and Means
10. It was a part of the conspiracy for MARK E. HOPKINS to direct his business income to a nominee to conceal his income.
11. It was a further part of the conspiracy that MARK E. HOPKINS and SHARON J. HOPKINS would transfer funds between bank accounts held in nominee names.
12. It was a further part of the conspiracy for MARK E. HOPKINS and SHARON J. HOPKINS to title real property in the names of nominees to conceal their ownership of the property.
13. It was a further part of the conspiracy that MARK E. HOPKINS and SHARON J. HOPKINS would send threatening correspondence to IRS employees to impede the ascertainment and collection of the federal income taxes that they owed.
Overt acts
In furtherance of the conspiracy, and to effect the objects thereof, the following overt acts, among others, were committed in the District of New Mexico, and elsewhere:
16. On or about April 15, 1997, MARK E. HOPKINS and SHARON J. HOPKINS filed an IRS Form 1040, U.S. Individual Income Tax Return, falsely stating that they had an adjusted gross income of zero and requesting a refund of all federal income tax withheld.
17. On or about April 22, 1997, MARK E. HOPKINS filed or caused to be filed with the Chaves County Clerk seven documents, each of which was identified as a “common law contract and declaration”, which documents purported to establish the Grace Trust, the Shalom Trust, the Solomon Educational Trust, the Maranatha Trust, the Esteem International Trust, the Bethlehem Trust, and the Guadalupe Medical Services Trust.
24. In December 1998, MARK E. HOPKINS directed his new employer, the Schumacher Group, to pay his business income to Shalom Enterprises.
29. On or about November 15, 2001, MARK E. HOPKINS wrote a check for $14, 589.23 from the Grace Trust account #xxxxxx8409 as a down payment for 601 N. Canyon in Carlsbad, New Mexico. Said property was used as the personal residence of MARK E. HOPKINS and SHARON J. HOPKINS through the date of this indictment.
30. On or about April 15, 2002, MARK E. HOPKINS purchased 607 N. Canyon Road in the name ...

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