Federal pursuit of tax fraud violators often entail a great deal of time and multi-agency coordination.  Most investigations, it would seem, are conducted aggressively but fairly and within the bounds of what is legal and ethical.  A 10-year case in Atlanta, Georgia however, serves as a vivid reminder that government itself is capable of breaking the law, of using any means to justify the ends, and of violating the rights of American taxpayers when it serves the government’s single-minded purpose of winning a conviction at any cost.

Federal law enforcement is obviously very important, thousands of federal special agents and prosecutors do their job diligently, competently, and ethically every day of the week, to all of our mutual and great benefit.  We live in a dangerous world, and without the best efforts of the men and women in the federal special agent cadré and prosecutors offices, life, liberty, and property would be in jeopardy.

Nevertheless, when rogue agents and prosecutors step over the line and unjustifiably persecute innocent people for over a decade, ruining lives and jobs, it has to be called out for what it is. Because there but for the grace of God go each and every one of us. It is indeed unfortunate that a few rogue agents taint the reputations and good work of thousands of others whose names never make it into misconduct motions, ethical complaints, and the like, but perhaps that's why it's even more important that these misdeeds are exposed to the disinfecting light of judicial and public scrutiny. It is in this spirit that The Circle Group and the Marchelletta family are compelled to fight on to expose this outrageous misconduct and seek final resolution and remedy.

Key Facts:

• In 1993, New York-based Jerry Marchelletta, moved to Atlanta, Georgia to start his drywall construction company in an environment he deemed more conducive to raising his family and operating a company. His father, Jerry, Sr., and sister, Joyce Laidler followed in 2000. The company, now known as The Circle Group, grew rapidly, developing a significant customer base in the fast growing local economy and winning contracts for prestigious public and private sector projects throughout the Southeast and beyond, including work on two St. Regis Hotels, two Ritz Carlton’s, three large scale W Hotels, several projects at Emory University, the Intercontinental Hotel and Georgia World Congress Center in Atlanta, the Waldorf Astoria in Orlando, the Marriott Waterside in Tampa, the Westin Hotel in Charlotte, the Duke University Ambulatory and Medical Building, and many projects at The Wynn, The Encore, The Venetian and City Center properties in Las Vegas.
• At its peak, Circle employed 1200 fulltime employees, paying wages near the top of the local scale.  The company was among the first drywall companies in the Southeast to offer field employee benefit packages which include paid vacations, sick days, health insurance and 401k plans.  At peak the company was generating approximately $88 million in gross revenues.
• In 2006, the company came under a vicious and on-going attack from the Southeastern Council of Carpenters, conducted under the guise of an “area standards campaign”, yet more ostensibly done to discourage and pressure local contractors and developers not to award work to Circle.  That attack continues to this day and has included employee, customer, vendor, tenant and even neighbor harassment and intimidation, violations of off-site picketing prohibitions, the use of “salts” to infiltrate the company and alienate other employees, intimidation and harassment of family members and the use of unlawful secondary boycott activities designed to threaten, coerce and restrain innocent third-party neutrals from continuing to do business with The Circle Group. These unconscionable union activities further extended to include sending faxes full of hate-filled rhetoric to the children’s school officials and posting anti- Circle Group banners across the street from their schools and day care facilities.   In October 2009, The Circle Group filed suit in the US District Court, Northern District of Georgia, against the union alleging multiple violations of the National Labor Relations Act.  That case is now pending.
• Since moving to Atlanta, The Circle Group and its owners have been model suburban citizens, quietly supporting a variety of educational, social, civic and recreational programs, running a business, making a large payroll and contributing to the local quality of life. Programs and projects that the family and company have supported include Children’s Healthcare of Atlanta, Make a Wish Foundation, Starlight Foundation, Toys For Tots, St. Jude’s Children’s Hospital, the Boy Scouts of America, Noah’s Ark, the Alpharetta Police Safe and Secure Program and the Tampa Hope Lodge, not to mention financially contributing to the many youth activities of their employees families.  Altogether, Circle and the Marchelletta family has provided financial support to over 50 non-profit, youth recreation and civic organizations in a quiet and low-key manner that befits the company’s quiet approach to managing its business affairs.
• The Circle Group and the Marchellettas first gained the notice of federal authorities during their badly managed prosecution of the so-called Gold Club trial which took place in 2001.
• In March of 2001, the US Customs Service (now ICE) began an investigation into the company that centered around their “happenstance” seizure of a Federal Express delivery of three checks totaling $1.5 million from The Circle Group’s Atlanta corporate office to its legal counsel for deposit in the Bahamas where the company was working on several major projects at The Atlantis and was employing approximately 250 people at peak.  Seized funds were payments for completed construction work and intended for employee payroll since at that point, due to the resignation of the local project manager, no one at The Circle Group offices in the Bahamas had check signing authority.  While the seized funds were eventually returned to the company nearly two years later, ICE opted to keep $50,000 for their trouble.
• Initially, Customs explained the seizure as a random act however, only later did discovered documents reveal that the federal agency was investigating the Marchellettas for possible ties to New York crime bosses.  (It is noteworthy that while this investigation has never once revealed any such ties and no such allegation and no charge of this sort has ever been made in court, as recently as mid-2010 Customs documents continue to refer to the Marchellettas as LCN (organized crime suspects)).  While an FBI investigation into those alleged mob ties was opened, it was quickly closed when the agency determined that such there was no basis for going forward.  Nonetheless, this heinous stereotyping and racial profiling has continued.
• Over the ensuing 9 years, the Customs Service (ICE) in Atlanta, New Orleans and Miami worked in tandem with the US Department of Treasury (IRS) and the US Justice Department in the Northern District of Georgia to conduct an exhaustive investigation into Circle, its owners and employees, striving without success to draw any connection to the defendants and organized crime. 
• Instead of dropping the case completely, in their frustration and determination to justify a waste of millions of tax dollars on a fruitless investigation, federal agents then turned their attention to Circle Industries corporate and Marchelletta ownership tax returns for the years 1999 through 2000.
• During the income tax investigation (2004)-and 3 years prior to any indictment-the Marchellettas paid all taxes deemed by the government to be owed. (Legal counsel advised not paying these taxes any earlier).
• In April 2007, federal prosecutors brought 9 charges against Jerry Marchelletta Sr., Jerry Marchelletta Jr. and an employee who served as book keeper for the company.  These charges included tax evasion, conspiracy, and filing of materially false tax returns.  In the initial trial, the jury found the Marchellettas guilty on  a total of 4 counts including conspiracy.  The Marchellettas were found not guilty on 3 counts while a fourth count was dismissed at trial at the request of the prosecutors who even then seemed to sense the weakness of their case.
• Ultimately the convictions hinged on draft tax returns the Marchellettas had never seen or signed which were completed by their one time CPA who had been previously terminated.
• Official court documents show that Jerry Jr. had approximately $1200 in tax liabilities and penalties at the time of the sentencing.
• The Marchelletta’s sentencing coincided with Jerry Jr.’s receipt of  over $600,000 in federal tax refunds.
• Evidence, and eventually, the 11^th Circuit Court of Appeal ruling shows, that the conduct of the trial was fraught with many mis-steps by both the defense counsel, which failed to challenge many illegal acts and acts of misconduct by prosecutors and their federal agency cohorts at Customs and the IRS leading up to and through the trial, as well as failure of the judge to properly charge the jury.
• In fact, the government’s trumped up case was so badly managed that upon receiving the jury’s verdicts, presiding Judge Batten remarked that he was “deeply troubled” by the case.
• Over the course of the 10-year investigation and prosecution of the Marchellettas, this vast government misconduct took many forms including perjury, witness intimidation, falsifying government documents, failure to disclose a confidential FBI informant, manipulations of the discovery process, violations of FOIA regulations, withholding essential evidence and collusion with organized labor.
• Full documentation of the many illegal and unethical acts committed by representatives of the US Justice Department, ICE and Internal Revenue Service is available for media scrutiny and at this time is still being uncovered as thousands of pages of previously withheld documents—illegally concealed in violation of court orders—are finally being turned over to plaintiff’s counsel.
• The entire ordeal is fraught with odd and thus far unexplained episodes including:
  • Multiple break-ins at The Circle Group offices, the first of which occurred in July 2001 when the lock was picked and alarm system and electrical system were disabled inside the electrical closet.  The perpetrators passed up several new and easily accessible computers to steal only very old models previously used by Jerry Jr., and Jerry Sr.
  • Admitted actions by the Carpenter’s union to register Jerry Marchelletta, Sr. as an internet minister in the Universal Life Church and then mailing the registration certificate to his neighbors along with a “hate” flier regarding his convictions.
  • Union harassment of the Marchelletta’s young children at public locations near their homes (25-miles from any Circle Group projects), as well as at day care facilities.  Perhaps most appallingly, the union went so far as to mail hate-filled letters to the children at their own homes which included an official State of Georgia document for officially changing their name.
  • Door-to-door solicitation by the union and IRS special agent Patty Bergstrom in the Marchelletta’s neighborhoods to dig up negative comments from neighbors, to spread the word about the family’s legal problems and to plant the seed that the family was connected to New York mob bosses.
  • Documented communication and coordination between IRS Agent Bergstrom and Carpenter’s Union organizers.
• In August 2010, upon appeal filed by the Bernhoft Law Firm, selected by the Marchellettas as legal counsel for the 11^th Circuit appeal, the three judge panel saw the government’s case and conduct for what it was, remanding 3 convictions back to the lower court for re-trial, and reversing one conviction with instructions that the lower court issue a judgment of acquittal.
• The remaining conviction was affirmed despite a strong dissent by Judge Birch who cited insufficient evidence and argued instead for a judgment of acquittal.
• On October 4, 2010 attorneys for the Marchellettas submitted a Rule 33 filing in the District Court detailing for the first time much of the questionable and at times outright illegal actions taken by Federal Agents and Prosecutors throughout the 10 years of the investigation and trial.
• In December 2010, the 11^th Circuit invalidated the last remaining conviction against the Marchellettas.
• Also in December, Federal Judge Batten of the Northern District of Georgia sternly rejected a Motion for Summary Judgment filed by the government with regard to FOIA requests, citing vast inconsistencies in the testimony and declarations of the government’s star witness and lead investigator, IRS Special Agent Patty Bergstrom.
• To date, the Marchellettas have spent more than $5 million in legal and investigative fees to clear their names. 
• The government’s pernicious overreach and unchecked persecution of the Marchellettas and their company has cost them tens of millions of dollars in lost revenues as well as untold damage to their otherwise exemplary reputations.
• Hundreds of long-time employees with careers spanning as long as 15 years with The Circle Group have had to be laid off for the first time due to the decline in revenues directly attributable to the 10 year Federal investigation as well as the collusive actions taken up with the Carpenters Union.
• On April 5, 2011, the US Court of Appeals denied the Government’s appeal for rehearing and officially closed the case.  All convictions against the Marchellettas have been invalidated or reversed.  On April 13, 2011, US District Court Justice Timothy Batten, Sr. officially signed the mandate closing the case.
  
• The Marchellettas have committed to pressing their case for as long as it takes to win complete vindication and hold those federal employees and prosecutors responsible accountable for violating the law and pursuing these false claims.
• The Marchellettas are also committed to ending the stereotype that successful Americans of Italian descent must somehow be “connected” to crime bosses in order to gain their success.