United States District Court, D. Massachusetts
MEMORANDUM AND ORDER
J. Casper, United States District Judge.
Biogenesis Church, Inc. (“Biogenesis Church”) has
filed this lawsuit against Defendant the United States of
America (the “United States”) alleging a wrongful
levy and seeking declaratory and injunctive relief, as well
as damages under 26 U.S.C. § 7426(a)(1) and (b)(2). D.
1. The United States has moved for summary judgment on Count
II of the complaint. D. 22. For the reasons stated below, the
Court ALLOWS the motion.
Standard of Review
Court grants summary judgment where there is no genuine
dispute as to any material fact and the undisputed facts
demonstrate that the moving party is entitled to judgment as
a matter of law. Fed.R.Civ.P. 56(a). “A fact is
material if it carries with it the potential to affect the
outcome of the suit under the applicable law.”
Santiago-Ramos v. Centennial P.R. Wireless Corp.,
217 F.3d 46, 52 (1st Cir. 2000) (quoting Sanchez v.
Alvarado, 101 F.3d 223, 227 (1st Cir. 1996)). The movant
bears the burden of demonstrating the absence of a genuine
issue of material fact. Carmona v. Toledo, 215 F.3d
124, 132 (1st Cir. 2000); see Celotex Corp. v.
Catrett, 477 U.S. 317, 323 (1986). If the movant meets
its burden, the non-moving party may not rest on the
allegations or denials in her pleadings, Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 256 (1986), but
“must, with respect to each issue on which she would
bear the burden of proof at trial, demonstrate that a trier
of fact could reasonably resolve that issue in her
favor.” Borges ex rel. S.M.B.W. v. Serrano-
Isern, 605 F.3d 1, 5 (1st Cir. 2010). “As a
general rule, that requires the production of evidence that
is ‘significant[ly] probative.'” Id.
(quoting Anderson, 477 U.S. at 249) (alteration in
original). The Court “view[s] the record in the light
most favorable to the nonmovant, drawing reasonable
inferences in his favor.” Noonan v. Staples,
Inc., 556 F.3d 20, 25 (1st Cir. 2009).
following facts are taken from the parties' Rule 56.1
statements and accompanying documents and are undisputed
unless otherwise noted. Daniel H. George, Jr.
(“George”) is a self-taught chemist who has
created his own health supplements. D. 29, ¶
On April 3, 2003, George was indicted on four counts of tax
evasion for tax years 1996-1999 and four counts of using a
false social security number. D. 29, ¶ 3. George was
found guilty on all four counts of tax evasion. D. 29, ¶
The Biogenesis Foundation
14, 2003, George established the Biogenesis Foundation, Inc.
(“Biogenesis Foundation”). D. 29, ¶ 8.
George was the sole incorporator and, as of its 2016 annual
report, was still listed as the president, treasurer, clerk,
and director of the Biogenesis Foundation. D. 29,
¶¶ 8, 13. George was also the only person with
signatory authority for the Biogenesis Foundation's
checking account. D. 29, ¶ 15. George transferred $7.7
million of his own money into a Biogenesis
Foundation bank account, for which George received no
consideration (the “2003 transfer”). D. 29,
¶¶ 9-10. After the 2003 transfer, George did not
own any assets except for a house at 1 Warren Court,
Rockport, Massachusetts (the “Warren Court
property”), which in 2016 had a tax value of $281, 900
and social security disability payments he has received since
1976. D. 29, ¶ 11. The Biogenesis Foundation's
address was the Warren Court property. D. 29, ¶ 14.
has control over Biogenesis Foundation's funds and
responsibility for distributing them. D. 29, ¶ 40. While
operating the Biogenesis Foundation, George paid his own
legal fees out of funds held in its bank account. D. 29,
¶ 16. Between 2003 and 2008, Biogenesis Foundation spent
$1, 504, 564 on George's legal fees. Id. In
2008, George also used funds from the Biogenesis Foundation
account to pay for improvements to the Warren Court property,
structured as a loan to George with a balance of $218, 205,
as well as utility bills and property taxes. D. 29,
IRS Begins Civil Tax Assessment of George
George was released from prison in 2007, and while he was on
supervised release in 2010, the United States alleged that
George violated the terms of his supervised release due to a
failure to pay the fine that was a part of his sentence and
his continuing lack of cooperation with the IRS. D. 29,
¶¶ 19-20. On November 4, 2010, George's counsel
stated at a supervised release revocation hearing that the
IRS was reviewing George's tax records to issue an
assessment. D. 29, ¶ 21. On October 10, 2012, the IRS
issued a statutory notice of deficiency (the “Notice of
Deficiency”) to George, informing him that the IRS had
determined that he owed $2, 165, 892 for tax years 1995-2002,
and $1, 624, 419 in tax penalties. D. 29, ¶ 23.
The Biogenesis Church
20, 2012, George founded Biogenesis Church as the sole
incorporator. D. 29, ¶ 25. George is Biogenesis
Church's president and its business address is the Warren
Court property. D. 29, ¶¶ 26-27. On October 11,
2012, George transferred $7, 559, 861.16 from Biogenesis
Foundation's account to a new Biogenesis Church account,
for which there was no consideration (the “2012
transfer”). D. 29, ¶¶ 28-29. Except for $10
remaining in its account, after the 2012 transfer, Biogenesis
Foundation had no property and essentially ceased operations
as Biogenesis Church took over, in George's own words,
“the exact same work.” D. 29, ¶¶ 30-31.
George has control over Biogenesis Church's funds and
responsibility for distributing them. D. 29, ¶ 40.
George is the only signatory for Biogenesis Church's bank
account. D. 29, ¶ 38. George used funds from the
Biogenesis Church account to make payments on behalf of the
Biogenesis Foundation. D. 29, ¶ 32. Biogenesis Church,
similarly to Biogenesis Foundation, paid utility bills for
the Warren Court property owned by George and does not pay
rent for using the house. D. 29, ¶¶ 41-43.
IRS Issues Levy to ...