Former Mayor Seeks Dismissal of Long Tax Case

Former Portage, Indiana, Mayor James Snyder is asking a federal appeals court to dismiss a nearly decade-old tax case stemming from his 2016 indictment on charges of obstructing the IRS. Snyder’s attorneys filed an 111-page motion on Monday in the U.S. 7th Circuit Court of Appeals, seeking to throw out the conviction entirely. The filing argues that the district court made a legal error in denying his motion for acquittal and that the statute of limitations has expired on the obstruction charge.

The motion lists three primary reasons for dismissal. First, Snyder’s team claims the evidence was insufficient to prove a “corrupt endeavor to obstruct the administration of the internal revenue laws.” They allege prosecutors relied on false and misleading evidence, specifically pointing to fake and fraudulent invoices used to hide income. Second, the attorneys argue the six-year statute of limitations expired before the trial began. Finally, they contend that the U.S. Supreme Court’s recent ruling in Snyder’s bribery case should automatically undo the IRS conviction, as the two charges are legally linked under the court’s new definitions of bribery versus a gratuity.

Related: Social Security Benefits Could Rise Under New Proposal

Snyder was convicted on the IRS charge, which involved his personal business rather than his duties as mayor, and that conviction had stood unchallenged until now. Prosecutors argue the obstruction scheme began in January 2010 and involved the creation of “phony invoices” from a company called SRC to bill Snyder’s mortgage business, First Financial Trust Mortgage LLC, for consulting work. In 2010, GVC paid SRC over $400,000, and the deposits totaled more than $640,000 over three years. On his personal taxes, Snyder claimed $31,369 in debt was uncollectible in March 2010 and offered to pay just $1,000, according to court records.

Snyder’s attorneys argue that the district court failed to properly apply the statute of limitations, which they say began to run when the alleged crime occurred rather than when it was discovered. The motion highlights testimony from IRS Special Agent Gerard Hatagan, who testified during sentencing that a case like Snyder’s “possibly would not be pursued today.” Hatagan stated that if the obstruction charge were considered “solely on number” and not the manner of its commission, it would not be prosecuted. He noted that aggravating factors—Snyder being an elected official and the tax scheme lasting multiple years—caused the charge to move forward.

Related: Missouri Voters Reject Income Tax Phaseout Plan

The government admitted targeting a “failed business owner” on a tax theory because he later became an elected official, the court document states. Hatagan’s testimony contradicted the claim that Snyder used fake invoices to avoid paying taxes. While prosecutors previously said Snyder hid income with no evidence, the agent suggested the government’s theory was weak. Snyder was sentenced to three years of probation and ordered to repay $78,111.57, though he has only paid $18,000 so far, according to the court filing.

This latest legal maneuver comes after the U.S. Supreme Court ruled in June 2024 that a $13,000 payment Snyder received for a garbage truck contract was a gratuity, not a bribe, because it was made after the contract was awarded. That ruling forced prosecutors to drop the bribery count, but the IRS obstruction charge remains. The Supreme Court remanded the bribery case to lower courts, and prosecutors indicated they would forgo a third trial on that matter. Snyder had requested a new trial on the IRS charge, arguing that the information from the bribery case improperly influenced the jury, but the U.S. Attorney’s Office rejected that request as “untimely and meritless.” Snyder is also appealing his probation sentence and has requested oral arguments on the dismissal motion.