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Duncan Outdoors owner reaches plea bargain with IRS

Patrice Duncan said if case went to trial, 'we could win'

Posted: May 16, 2014 - 3:27pm

Patrice Duncan, 59, co-owner of Conway's Duncan Outdoors, has reached a plea bargain in felony charges filed against her in 2012 when the IRS raided her business for structuring a financial transaction in order to evade bank reporting requirements on cash deposits of more than $10,000.  

Duncan has pleaded guilty to one count of structuring a financial transaction in exchange for all charges filed against her husband Gary to be dropped.   

"I pled to one count so they would drop my husband totally," Patrice said. 

According to the US Attorney's office, structuring has a statutory maximum of not more than five years in prison and/or not more than a $250,000 fine followed by not more than three years of supervised release.

Patrice's plea bargain suggests probation rather than the five-year prison term. 

"If the judge doesn't accept the plea bargain we'll have the option to drop the plea and go to court," Patrice said. 

The plea was announced by Christopher R. Thyer, United States Attorney for the Eastern District of Arkansas and Christopher A. Henry, Special Agent in Charge of the IRS-Criminal Investigation Nashville Field Office on Wednesday. 

Patrice and Gary were indicted by a federal grand jury on September 5, 2012, on 21 counts of structuring financial transactions totaling more than $300,000 in deposits. She pled to Count 21 of the Indictment. The remaining counts against Duncan were dismissed.

In September and October 2011, an undercover agent of the IRS-Criminal Investigations went to Duncan Outdoor and purchased a motorcycle with cash. 

According to a news release from the US Attorney's office, the undercover agent, who was wearing a recording device, discussed paying in cash so that the bank and government would not know of the transaction.

The release says Patrice was recorded discussing with the undercover agent that she would not deposit all the money at one time so that the bank wouldn’t fill out the forms that document transactions over $10,000. 

Patrice said the discussions the news release claims were initiated by her, were words actually spoken by the undercover agent.  

On October 25, 2011, Patrice deposited $9,400 cash from the undercover agent’s purchase. A few days later, on October 28, 2011, Patrice deposited the remaining $2,000 cash from the undercover agent’s purchase.

"I didn't know it was illegal," Patrice said. 

There are many reasons why Patrice didn't deposit the nearly $11,500 at once, she said, but the main reason is insurance. 

Patrice explained if cash were to be stolen from Duncan Outdoors, the business' insurance would reimburse them up to $10,000, so each time they get near "the magic $10,000 number" they make a deposit. 

The undercover IRS agent told the couple his name was Chad Copper and that he was a bartender from Cincinnati, Ohio, Patrice said.   

"We had no idea he was an IRS agent," she said. 

The Duncans have spoken out in a video online called "Rampant Injustice" in which they say the IRS used harassing tactics when federal agents searched their business in 2012. 

The raid was uncalled for," Patrice said. "They had 20 armed IRS agents in our business. They shut it down, lined our employees up execution style and took them one by one and questioned them without reading any rights."   

Upon the plea, U.S. District Judge James M. Moody Jr. issued a preliminary order for Patrice to forfeit $94,500 that was in a Centennial Bank checking account at the time she and her husband were indicted in September 2012.  

"We're just counting that as money lost in the stock market in our effort to try to get back to a normal life," Patrice said. 

The Duncans have been in business in Conway for 33 years.

"I would never have pleaded guilty if it not had been for my family and employees," Patrice said. "If we both went to trial, we feel like we could win, but it's a gamble. This way we can keep the business, keep our employees and go on with our life." 

A sentencing date has not yet been set, but Patrice's attorney tells her the plea could be accepted by Aug. 1.

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lachowsj
4972
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lachowsj 05/16/14 - 07:35 pm
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Having it both ways

You can't plead guilty to something unless you are willing to swear under oath that you are guilty. And if you swear under oath that you are guilty, it's pretty disingenuous to turn around and say you have done nothing wrong. You can't have it both ways.

conwaygerl
5099
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conwaygerl 05/16/14 - 08:17 pm
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not necesarily

You take a big risk going to criminal court. If a plea will avoid a statutory five-year sentence, then it's the smart move, not the guilty move.

I'm not saying they are guilty or innocent, I'm just saying a plea bargain isn't indicative of guilt.

"If the judge doesn't accept the plea bargain we'll have the option to drop the plea and go to court,"

It's called a compromise, not an admission...otherwise the judge could say "no, you just confessed with your plea."

Google Rule 11(c)(1)(C) agreement

lachowsj
4972
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lachowsj 05/16/14 - 09:07 pm
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Yes, necessarily

I'll try to type slowly, conwaygerl. She has struck a plea bargain. She has not yet been to court with it. When she goes to court, she will have to get on the stand and testify as to certain facts. Those facts will have to support what she is pleading guilty to. She can't just say she enters a guilty plea. She has to describe under oath what she did exactly that made her guilty of that charge. Only when the judge is satisfied that she has made an adequate admission will he find her guilty. If he is not satisfied, he will ask her own attorney to question her further to get the necessary facts on the record. If the attorney cannot elicit an actual factual basis for the plea, the matter will go to trial.

So it is only a compromise in the sense that the rest of the charges are dropped. It is a full admission to the one charge.

A judge can refuse to support the agreement and, if so, the parties can go back to the bargaining table or can go to trial. The most likely reason a judge would not support a plea agreement is that the defendant is getting off too easy. In other words, there are facts already in evidence that would support greater charges. The decision to support the plea agreement is made before the client testifies. But again, after the plea bargain is struck, the client still has to testify as to the facts. The reason for that is so she can't later claim she is not guilty.

After writing the above, I played your little google game. It reinforced what I just said. http://www.law.cornell.edu/rules/frcrmp/rule_11

conwaygerl
5099
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conwaygerl 05/18/14 - 10:56 pm
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Like I said it is a

Like I said it is a compromise.

She is guilty of something she didn't know was a crime. Why call her disingenuous over that?

Not to mention the seized account, sounds like they've paid for their mistake to me.

lachowsj
4972
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lachowsj 05/19/14 - 06:58 am
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What you said

What you said, and what I took strong issue with, was that it was a compromise, not an admission. It is a compromise AND an admission. No getting around that. You can say she didn't know it was a crime. But everyone knows ignorance of the law is no excuse. And she can spin it that way if she wishes. But she went beyond that in this article, claiming not ignorance but innocence. That was the reason for my original comment.

conwaygerl
5099
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conwaygerl 05/19/14 - 10:22 am
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hmmm

"But she went beyond that in this article, claiming not ignorance but innocence."

I guess I missed that...What part of the article is claiming innocence?

mikeng1994
10164
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mikeng1994 05/19/14 - 09:25 am
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We don't disagree often, but

We don't disagree often, but the Duncans knew exactly what they were doing and that is was illegal. If they didn't know the difference, then why would they break up the deposits? It would have been much more easy to just deposit the entire amount.

Its unfortunate they they were able to negotiate out of this. White collar crime is still a crime, and they should have been held accountable for counts and pay for that with the appropriate prison time.

conwaygerl
5099
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conwaygerl 05/19/14 - 10:26 am
1
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read

"If they didn't know the difference, then why would they break up the deposits?"

There are many reasons why Patrice didn't deposit the nearly $11,500 at once, she said, but the main reason is insurance. Patrice explained if cash were to be stolen from Duncan Outdoors, the business' insurance would reimburse them up to $10,000, so each time they get near "the magic $10,000 number" they make a deposit.

Maybe she is lying there, I don't know. But nothing in the article hits me as a red flag of criminal activity.

Just my opinion.

I would think with the research capabilities of the IRS, once an investigation begins, the chance of detecting a crime more serious than what boils down to the crime of "avoiding paperwork" would have been exposed, if that was occurring.

Again, just my opinion.

mikeng1994
10164
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mikeng1994 05/19/14 - 12:05 pm
2
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I'm just not buying it

Let's say there is a $10K limit for insurance reimbursement if cash is stolen from the business. Then some one comes in and flops down, say, $15k cash for a brand new Kubota. Why wouldn't they deposit that whole 15K just for the sake of getting out of the building if there were no benefit financially from it for themselves?

It's just a business transactions that requires a document. They are not penalized for depositing greater than $10K. I am sure that legit businesses all over America make cash sales for that amount every day. I bet Lowes sees 10 a week.

And just one more thing, why would they share that information with the customer? Is it common to discuss how a person handles money inside their business with customers? I bet not. I am certain this was done to hide something from the powers that was agreed upon by the customer and the Duncans.

Just my thought.

Igor Rabinowitz
8392
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Igor Rabinowitz 05/19/14 - 01:37 pm
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Also

"It's 'cause of in the insurance" is one of the great fall-backs in the finger-pointing game; you hear it all the time.

The company has any number of items in inventory selling for over $10K. I expect the insurance provider was well aware of this, as well as the potential for a cash transaction.

It's, as stated, just not adding up.

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