Full opinion text
ROVNER, Circuit Judge. At the conclusion of an eleven-week trial, a jury convicted defendants Michael A. Vallone, William S. Cover, Michael T. Dowd, Robert W. Hopper, Timothy S. Dunn, and Edward Bartoli of conspiring to defraud the United States by impeding and impairing the functions of the Internal Revenue Service (“IRS”) and to commit offenses against the United States, along with related fraud and tax offenses. They were sentenced to prison terms ranging from 120 to 223 months. The defendants appeal their convictions and sentences. We affirm. I This is the latest in a series of cases arising out of abusive trusts promoted by The Aegis Company (“Aegis”) and its sister company, Heritage Assurance Group (“Heritage”), both based in Palos Hills, Illinois. See United States v. Wasson, 679 F.3d 938 (7th Cir.2012); United States v. Hills, 618 F.3d 619 (7th Cir.2010), cert. denied, — U.S. -, 131 S.Ct. 2958, 180 L.Ed.2d 249, — U.S. -, 132 S.Ct. 130, 181 L.Ed.2d 51 (2011); United States v. Patridge, 507 F.3d 1092 (7th Cir.2007); United States v. Baxter, 217 Fed.Appx. 557 (7th Cir.2007); Muhich v. C.I.R., 238 F.3d 860 (7th Cir.2001); Bartoli v. Richmond, 215 F.3d 1329, 2000 WL 687155 (7th Cir.2000); see also United States v. Richardson, 681 F.3d 736 (6th Cir.2012); United States v. Welti, 446 Fed.Appx. 784 (6th Cir.2012); United States v. Ellefsen, 655 F.3d 769 (8th Cir.2011); Richardson v. C.I.R., 509 F.3d 736 (6th Cir.2007); United States v. Diesel, 238 Fed.Appx. 398 (10th Cir.2007); United States v. Tiner, 152 Fed. Appx. 891 (11th Cir.2005). Heritage was formed in 1990 by Michael Richmond as the Illinois offshoot of a like-named California firm. Defendants Michael Vallone and Robert Hopper joined the staff of Heritage shortly thereafter. Defendant Edward Bartoli, an attorney with degrees from both Notre Dame and Harvard, later became affiliated with Heritage as its legal counsel. Heritage was in the business of selling living trusts for estate planning purposes. These trusts were marketed to customers through a network of cooperating insurance agents. In 1993, Bartoli put forward the idea of a package of business, family, and charitable trusts that could be marketed to customers as a means of both estate planning and income tax minimization. Bartoli thought that such a package could command a price of $25,000 or more. Vallone and Hopper were amenable to the idea and joined Bartoli in bringing his idea to fruition. They began to promote the concept of a multi-trust system at training sessions that Heritage sponsored for its cooperating insurance agents, and eventually began to sell some trust packages to Heritage clients. By early 1994, however, Vallone and Hopper had fallen out with Richmond and forced him out of Heritage, accusing him of embezzlement. Along with Bartoli, they decided to form a new company, Aegis, to take over marketing of the multitrust system. Aegis was formed later that same year, and it began to sell multi-trust systems as a way for high-income individuals to minimize their income taxes. Aegis and Heritage continued to share the same building in Palos Hills, a Chicago suburb, as their headquarters. Although the Aegis system of trusts was portrayed as a legitimate, sophisticated means of tax minimization grounded in the common law, the system was in essence a sham, designed solely to conceal a trust purchaser’s assets and income from the IRS, thereby reducing his apparent tax liability and defrauding the United States of revenue to which it was entitled. Pursuant to the Aegis system, “customers appeared to sell their assets to several trusts when, in fact, customers never really ceded control of their assets.” Hills, 618 F.3d at 624. The trusts were marketed to and implemented for customers across the United States through a network of corrupt promoters, managers, attorneys, and accountants. Although prospective customers who bothered to seek independent advice as to the legitimacy of the Aegis system were routinely warned of its flaws, greed led many to overlook the system’s “too good to be true” attributes. Between 1994 and 2003, some 650 individuals purchased Aegis trust packages, at prices ranging from $10,000 to $50,000 or more. The diverse clientele included real estate brokers, doctors, public officials, and a variety of small-business owners. Among the purchasers was a co-founder of the Hooters restaurants chain, Lynn “L.D.” Stewart, who himself was later charged with tax evasion, although the charges were dismissed after his trial resulted in a hung jury. (Others were not so lucky; some Aegis clients were convicted and sent to prison.) The thousands of false income tax returns that were filed based on the use of the Aegis trusts are estimated to have cost the federal government more than $60 million in tax revenue. The defendants in this ease include the progenitors of the Aegis trust along with some of its major promoters. Vallone was the executive director of Aegis; Bartoli, who came up with the idea of the trust system, was the firm’s first legal director until 1996, and continued to help manage Aegis thereafter; and Hopper served as the firm’s managing director. In 1995, these three, along with Timothy Shawn Dunn, created Aegis Management Company (“Aegis Management”) to provide trust management services and tax advice to individuals who purchased the Aegis trusts. Dunn, a certified financial planner, was a promoter as well as a manager of Aegis trusts; he became the executive director of Aegis Management. William Cover, like Dunn, was a promoter and manager of Aegis trusts. He served as the president of Sigma Resource Management, Inc. and later held the controlling interest in Sigma Resource Management, LLC (collectively, “Sigma”), which also provided management services to purchasers of Aegis trusts. Vallone and Michael Dowd served as directors and officers of Sigma. Dowd came to work at the Palos Hills offices of Heritage and Aegis in 1997, after earning a degree in business finance. In addition to assisting the Aegis principals, Dowd provided management services to trust purchasers through both Aegis and Sigma. David Parker, a New York attorney, served as the legal director of Aegis Management. He assisted in the promotion and management of Aegis trusts as well as the defense of the trust system from government inquiries. John Stambulis, an Illinois attorney, worked in the Palos Hills office of Aegis, and assisted with the creation and defense of Aegis trusts. Both Parker and Stambulis would later plead guilty and testify against the remaining defendants at trial. The Aegis trusts were typically marketed to wealthy, self-employed individuals whose income could not be easily traced through the W-2 forms that are issued to ordinary taxpayers. Aegis representatives, including the defendants, conducted seminars promoting the Aegis trusts in cities around the country. Attendance at these seminars was by invitation only, and guests were charged between $150 and $500 to participate. Attendees were told at such seminars that use of the Aegis trust system would reduce if not eliminate their federal income taxes. They were often given materials that purported to document the legitimacy of the system with seemingly thorough and impressive citations to the various legal authorities that supported the trusts. But as one lawyer wrote to a client who sought his advice as to the legitimacy of the system: This material is full of errors, irrelevancies and partial truths followed by non sequiturs. I know that I must resist the temptation to follow every line or I could spend the rest of my life on this. I will ■ concentrate on how, even if it were 99 percent correct, the claimed tax effects fail. In doing so, I’m not implying that that 99 percent is correct. I’m just skipping over the errors. Gov’t Ex. Dunn Office 32, R. 962 Tr. 3395. Those persons who purchased packages of one or more trusts were also encouraged to purchase trust management services from Aegis Management or Sigma, for which they would pay thousands of dollars annually on top of the $10,000 to $50,000 they paid for the trusts themselves. These management services included advice and counsel on using the trusts to conceal income and assets from the IRS. The typical Aegis system comprised multiple domestic trusts, including a business trust, an asset management trust, and a charitable trust. (As we shall explain in a moment, foreign trusts were also used in many instances to further conceal an individual’s assets and income.) The centerpiece of the system was the business trust, also referred to as a “common law business organization” or “CBO.” The business trust was purportedly modeled after the Massachusetts Business Trust, a non-statutory arrangement by which ownership of a business is transferred to a trust in exchange for certificates of beneficial interest; the trustee then holds and manages the business on behalf of the holders of those, certificates. See Navarro Sav. Ass’n v. Lee, 446 U.S. 458, 468-69, 100 S.Ct. 1779, 1785-86, 64 L.Ed.2d 425 (1980) (quoting Hecht v. Malley, 265 U.S. 144, 146-47, 44 S.Ct. 462, 463, 68 L.Ed. 949 (1924)) (describing Massachusetts Business Trust). A key point distinguishing the Aegis business trust (along with the other trusts making up the Aegis system) is that an independent trustee never assumed any real control over the trust assets. With the aid of Aegis personnel, a purchaser nominally would transfer his assets—in-eluding his businesses and residence — to one or more trusts and formally cede control of those assets to the named trustee, typically Bartoli, Parker, or Stambulis. But routinely, within a few days after the trust was first established — and sometimes before the client had even transferred assets to the trust — the Aegis attorney would resign by means of a boilerplate letter citing “circumstances beyond [his] control,” and appoint the client as his replacement. E.g., R. 917 Tr. 3495-96; R. 921 Tr. 5408-09; R. 965 Tr. 306. Because the purchaser thus retained control over the assets assigned to the trusts, the transfer of those assets into the trust amounted to nothing more than a paper transaction with no economic substance. Again, the sole purpose of the trust was to conceal the purchaser’s assets from the IRS in an effort to reduce his tax liability. As the defendants themselves put it to their clients, the clients would “own nothing but control everything.” R. 921 Tr. 5384, 5406; R. 943 Tr. 204. That the Aegis trust system was a fraudulent scheme was borne out in the manner in which the underlying documentation was prepared. We have noted, for example, that the purportedly independent trustee named in the creation of the trust routinely would resign shortly after the trust was created and be replaced by the client on whose behalf the trust was created. Typically the boilerplate resignation letter was prepared and signed at the same time as the paperwork creating the trust, although it was dated several days later, leaving no doubt that the resignation of the initial, “independent” trustee was planned from the outset. Moreover, in many instances, the trust documents were backdated to make it appear that a client had (nominally) transferred his assets to the trusts long before he had even purchased the trusts — sometimes years earlier — in order to retroactively claim the tax advantages of the trusts. (False notarizations were routinely provided to give cover to the backdating.) An additional fee was sometimes charged for backdating documents in this way. Finally, false documents were created to make it appear that various legally important events had taken place — for example, minutes indicating that the directors of a trust had met— when in fact they never had. The income that Aegis clients derived from their businesses was also diverted to the trusts by means of management and consulting contracts between the clients’ businesses and their trusts, an arrangement that Aegis personnel suggested and helped to implement. Ostensibly, pursuant to such a contract, a trust would provide services to the client’s business, for which the business would in turn compensate the trust. In actuality, the trust would provide no services to the business, although the business would compensate the trust and write the payments off as an expense. The actual purpose of these contracts was thus to conceal the diversion of business profits to the trusts without the payment of taxes on that income. See Ellefsen, supra, 655 F.3d at 775, 779-80. The money that Aegis clients transferred to their trusts would be returned to the clients and their businesses in a variety of ways. In some instances, the trusts would make fictitious loans to the client or his business. In other instances, charitable trusts were used to pay for things that really had nothing to do with the stated aims of those trusts. For example, a charitable trust might pay hundreds of thousands of dollars to purchase a primary residence or vacation home for the Aegis customer, on the theory that the home would serve as the “world headquarters” of the trust. R. 943 Tr. 207, 222. Similarly, the charitable trust might pay for a family vacation trip on the theory that one of the purposes of the trip was to visit charitable enterprises to which the trust might make donations. Tax returns were prepared for the Aegis trust purchasers and for the trusts themselves, but these too were fraudulent in multiple respects. First, Aegis clients were advised by the defendants to assign their own income to the trusts despite the fact that the income was being earned and controlled by the clients just as it had been before the trusts were created. Second, clients were advised to report that assigned income on certain trust tax returns, but then to pass the income on to other trusts without taxes being paid on that income. The result was that the income remained in the clients’ hands, but the tax liability was transferred elsewhere. Third, the defendants encouraged clients to claim various deductions on the trusts’ federal tax returns that had no basis in law or fact. For example, clients were told to deduct their household utility and other expenses on the theory that their homes were the “world headquarters” of their trusts. College tuition for clients’ children was likewise posited as a trust expense based on the notion that the children would one day become directors of the trusts. The wealthiest Aegis clients were advised to participate in an offshore trust system employing foreign trusts and so-called “international business companies” (IBCs) in Belize. Belize was chosen as the locus for the offshore system because it was not particularly cooperative with the United States on issues related to asset-hiding and tax evasion. David Jenkins, a citizen of Belize, assisted the defendants with this aspect of the Aegis system, which commenced in 1995. The use of offshore trusts and foreign bank accounts enabled clients to further conceal their income by nominally transferring that income to a foreign trust. Again, control of the money would in fact remain with the client, but the tax liability would be shifted to a foreign entity that would, in actuality, file no U.S. tax return and pay no tax. As with the domestic trusts, foreign trusts and IBCs were established in such a way as to create the illusion that they were not under the control of Aegis clients. Jenkins would designate certain foreign entities to serve as the nominal directors, trustees, and protectors of these trusts or IBCs. For example, Freedom Services Company, an entity directed by Yallone, was often named as a trust protector (whose job it was to oversee the trustee), and a second company controlled by Jenkins was typically named as trustee. Meanwhile, Aegis clients were given undated letters of resignation from Vallone and Jenkins so that control of the trusts and IBCs at all times remained with them. Offshore accounts in Antigua were established in the names of these Belizean trusts and IBCs, and these accounts too were in reality under the control of the Aegis clients. To effect the concealment of his income using the offshore trust system, an Aegis client was advised to first transfer his untaxed income to a trust bank account in the United States. From there, the money would be transferred to a bank account in Antigua that was held in the name of a foreign trust. The money was then transferred again to a second bank account, this one in the name of an IBC. The transfer of funds between domestic and foreign trusts often was characterized as a loan, evidenced by one or more promissory notes. Because the transfer of funds from one trust account to another was simply a means of hiding the client’s funds from the IRS, these notes were a fiction. But to give them a patina of legitimacy, Aegis clients were advised that periodic demands should be made on the notes and, in turn, relatively small repayments (say, $10,000) should be made on the outstanding “loans.” Once a client’s funds had been transferred to the IBC’s bank account, the money could be repatriated to the client in the United States in one of several ways. The client would be given a credit card linked to the IBC account in Antigua, which card he could use to access his money, either by making purchases using that card or by receiving cash advances through Automated Teller Machines (ATMs) in the United States. Because the card was linked to an offshore account, there would be no record of these transactions clearing in the United States. The IBC could also make fictitious “loans” or “gifts” of deposited funds to the client. No taxes were paid on income diverted through the offshore trust system. Aegis clients were assured that the IRS would not have access to offshore trust and bank records and would never be able to link the clients to the control of the IBCs or the bank accounts linked to those IBCs. The system worked to the benefit of the defendants as well: they could receive transaction fees equal to two or three percent of any funds funneled through the offshore trusts. The services that the defendants provided to Aegis clients did not end with the establishment of the various trusts. The defendants also provided clients with assistance on two fronts in an effort to ensure that the goal of tax evasion was accomplished — preparation of tax returns, and defense of IRS audits. As the trusts were a sham, Aegis insisted that clients use pre-selected tax return preparers whom the defendants knew would both conceal the true nature of the tax-avoidance scheme and help to perpetuate it by preparing returns consistent with the purpose of that scheme. Vallone, Dunn, and Cover each assisted clients and their tax preparers in preparing their personal, business, and trust tax returns. Copies of the tax returns filed on behalf of many Aegis clients were later found in the defendants’ offices. By the mid-1990s, the IRS was aware that Aegis and other organizations were promoting various forms of trusts as a means of income tax evasion, and it began to step up its efforts to combat the abusé of trusts for this purpose. It formally signaled its focus on abusive trusts in April 1997, with the issuance of IRS Notice 97-24, available at 1997 WL 187852. The notice explained that it was “intended to alert taxpayers about certain trust arrangements that purport to reduce or eliminate federal taxes in ways that are not permitted by federal tax law.” Notice 97-24 at 1. The notice went on to cite five examples of potentially abusive tax arrangements, among them the business trust. Id. at 2. It explained that a common feature of an abusive trust is that the original owner of the assets nominally subject to the trust retains the .authority to cause the financial benefits of those assets to be returned to or made available to himself. Id. at 1-2. The notice also summarized the key legal principles applicable to trusts and tax liability, including firstly the - point that “[sjubstance — not form-— controls taxation,” such that abusive trust arrangements may be treated as shams for tax purposes. Id. at 3. It also noted: When used in accordance with the tax laws, trusts will not transform a taxpayer’s personal, living or educational expenses into deductible items, and will not seek to avoid tax liability by ignoring either the true ownership of income and assets or the true substance of transactions. Accordingly, the tax results that are promised by the promoters of abusive trust arrangements are not allowable under federal tax law.... Id. at 3. As we discuss in greater detail below, the Aegis principals were aware of Notice 97-24: Vallone, for example, acknowledged that Aegis received multiple copies of the notice (along with client inquiries) soon after it was issued by the IRS. R. 921 Tr. 5434. Yet, the notice did not cause, the firm to stop promoting Aegis trusts; instead, as we discuss below, it triggered efforts to avoid and/or obstruct IRS inquiry into the trusts. In fact, even before it issued Notice 97-24, the IRS was already quietly investigating Aegis. Michael Priess, then a Special Agent with the Criminal Investigation Division of the IRS, was among several agents who participated in an undercover investigation of Aegis that began in 1996. Priess posed as Mike Jordan, an investment adviser whose clients were mostly physicians. After attending an Aegis seminar in June 1996 at the Oak Lawn Hilton in suburban Chicago, Priess and another agent met with Dunn in 1997 to discuss the possibility of purchasing an Aegis package that would include an offshore trust. After attending two additional Aegis seminars — an October 1997 seminar in New York and a January 1998 seminar in Belize — Priess met again with Dunn in July 1998 to confirm-that he was interested in purchasing an offshore trust package. During that meeting, Dunn assured Priess that he would surrender control of the assets he.placed into the trust system for only about five minutes before the initial trustee resigned. “In fact,” Dunn told Priess, “the resignation letter is completed before you’re actually signing up.” R. 965 Tr. 275. Two months later, Priess (as Jordan) agreed to purchase a trust package at a price of $38,000, and to engage Aegis Management to service the trusts at a cost of $11,500 per year. Priess told Dunn at that time that his accountant had told him the Aegis system was “bullshit” and that he should not go ahead with the purchase. R. 965 Tr. 288. Dunn was not surprised: “It’s not the first time we’ve heard those words, believe me.” Id. Tr. 288. The trust documents were ready for Priess’s (or rather Jordan’s) signature in November. The package that Priess had purchased included a CBO/business trust (the Jordan Business Company Trust), an asset management trust (the MJ Asset Management Trust), an offshore trust (the Fructus International Trust), and an IBC (the Pernour Services Company). Parker had already signed the paperwork as trustee of the MJ Asset Management Trust, and Jordan’s forthcoming signature had already been notarized. Dunn told Priess to date his signature August 26, 1998, although that date had come and gone more than eleven weeks earlier. (As it turned out, the dates on some of the documents had to be corrected later so that they matched the notarized dates.) Minutes had already been prepared showing .that the asset management trust’s board of directors (which included only one director— Parker) had met by telephone on August 26, 1998. Parker had signed a letter of resignation effective on September 28, 1998; and Priess was also given an undated letter of resignation from the trustee and protector of the Belizean trust, “[t]o give me [i.e., Jordan] assurances that I had control of the Fructus International Trust.” R. 965 Tr. 332. Bank accounts at the Swiss American Bank in Antigua were opened for both the offshore trust and the IBC. After the trust system was established, Priess (as Jordan) set about with Dunn’s help to use the system to divert profits from his (fictitious) business into the trusts. A contract was prepared between Jordan’s business (Cumberland Investment Group) and the CBO (Jordan Business Company Trust) pursuant to which the CBO purportedly would provide management services to the business. The fee that the CBO would charge for these services was pegged at the amount of money Jordan expected his business to realize in profits that year — initially $220,000 and later $290,000. In reality, the CBO would provide no services at all to Jordan’s investment business, but the business would pay the fee to the business trust as a cover for the diversion of the business’s profits; the business trust would then transfer the fee to the asset management trust, which would in turn convey the fee to the offshore trust, which would then transfer the fee to the IBC. Priess posed a wrinkle to Dunn: he (Jordan) did not have $290,000 on hand to pay the CBO its “fee.” Dunn helped Priess come up with a “Plan B”: Jordan’s business would make an initial payment of $185,000 to the CBO; that money would then be transferred among the various trusts into the bank account of the IBC in Antigua; then $105,000 of that money would be repatriated to Jordan from the IBC account to Jordan as a “gift”; Jordan would then send that $105,000 back into the trust system by writing a check for $106,400 to Fructus International Trust in purported repayment (with interest) of a $105,000 “loan” that Fructus had made previously. These machinations added a new level of deceit to the charade of the management fee, making it appear as though Jordan’s business ultimately paid the entire “fee” of $290,000, when in fact part of that total was simply a recycling of the initial down-payment of $185,000. The net effect was that Jordan’s business gained a $290,000 deduction for its books, for which it paid only $185,000; the income tax liability that would have been due on the business’s profits was effectively shipped offshore to the IBC (which was beyond the reach of the IRS); and Jordan at all times retained control over the money. Priess subsequently had conversations with both Cover and Vallone at a February 1999 Aegis seminar in Cleveland about the way in which he had repatriated the $105,000 from the Belizean IBC to himself as a “gift.” Cover, who told Priess that he was managing trusts from some fifty Aegis clients, warned Priess that bringing money back into the United States as a gift from the IBC was risky, as he would owe tax on the portion of any gift in excess of $10,000. Cover suggested to Priess that he bring back the remainder of the $290,000 sent abroad as a “loan.” Cover also mentioned to Priess that he (Cover) used a credit card linked to his own offshore IBC account to obtain cash from that account. “I go to the Cash Station every week and pull out $400,” he told the agent. Priess Tr. 42; R. 944 Tr. 409; R. 966 Tr. 688. When Priess raised the same subject with Val-lone over lunch, Vallone had a different idea. Vallone suggested that Priess could still use a “gift” as the means of repatriating money from the Belizean entities, so long as he named a nominee director to the offshore bank accounts linked to the international trust and the IBC. That way, Vallone explained, Priess could say he had nothing to do with the “gift” if ever questioned by the IRS. Priess’s experience with the Aegis system documented most of the tax-evasive aspects of the Aegis scheme: a chain of connected trusts that, on paper, accomplished the transfer of client income abroad and assigned the income tax liability to an IBC, where it would effectively disappear; the designation of nominally independent trustees whose immediate resignation was planned for before the client signed the trust paperwork; the backdating of documents; the preparation of minutes to reflect fictitious meetings of the trusts’ boards of directors (e.g., Parker’s telephonic meeting with himself); the use of bogus management services contracts to facilitate the transfer of a client’s business profits into the trust system; the repatriation of funds diverted to the offshore trust and IBC back to the client in the United States through fictitious loans and gifts; and the reality that for the Aegis client, all of these transactions and events occurred on paper only, without altering the operation of their businesses, control of their assets, or access to their money. After the IRS signaled its interest in abusive trust arrangements with the issuance of Notice 97-24 in 1997, the defendants created what they referred to as the “Aegis Audit Arsenal.” This so-called arsenal was basically a series of obstructionist measures that the defendants encouraged Aegis clients to use, and in some instances aided their clients in using, to thwart IRS inquiries into the use of Aegis trusts. For example, the defendants encouraged clients to withhold information from IRS agents, to respond to IRS inquiries and requests for the production of financial records with non-responsive letters and questionnaires drafted by defendants, and to file frivolous motions to quash summonses issued by the IRS. In some instances, attorneys Parker and Stambulis sent letters drafted by Vallone to the IRS on behalf of Aegis clients. A nine-page letter that Parker sent to the IRS in November 1999 on behalf of Aegis client Genevieve Riccordino, a real estate broker, exemplifies the nature of this correspondenee. The letter is a font of evasion and obfuscation, posing a multitude of questions as to the IRS’s purposes in seeking information related to Riccordino’s trusts, voicing doubt as to the IRS’s authority to investigate the trusts, making frivolous document requests, and threatening to seek sanctions if the IRS did not comply with Parker’s demands. Gov’t Ex. Dunn Office 25 (Gov’t Supp. App. -189-97). Parker later confessed on - the witness stand that he issued letters such as this one with little or no forethought as to whether they had any arguable basis in the law. “I was more concerned about sending these letters' out pursuant to the Aegis Audit Arsenal than determining át the time whether they were legally defensible or not,” he testified. R. 947 Tr. 2040. Early in 2000, the defendants also created the Washington, D.C., law firm of Parker & Associates, which was owned by Parker and Hopper, to represent Aegis clients during IRS audits and examinations. The law firm served the dual function of helping to implement the Audit Arsenal’s goal of obstruction and to generate additional fees from Aegis clients. In a particularly brazen move, several of the defendants filed lawsuits against both the IRS and a number of its revenue and special agents, among others. Bartoli, Vallone, Hopper, and Dunn filed one such suit on May 8, 1997, in the Northern District of Illinois against (among others) IRS Revenue Agent James Pogue and the Illinois Attorney Registration and Disciplinary Commission (“ARDC”), which had initiated disciplinary proceedings against Bartoli based on his involvement with the trusts sold by both Heritage and Aegis. (We shall have more to say about the ARDC proceeding below.) That .suit was assigned to Judge Plunkett who, after dismissing most of the defendants and granting summary judgment to Pogue, imposed Rule 11 sanctions on the four plaintiffs for filing a frivolous lawsuit. See Fed.R.Civ.P. 11. His sanctions opinion, which we later affirmed and adopted on appeal, observed: ■ At base, the plaintiffs filed this claim because they believe the trusts they promote should be a legal means to avoid paying taxes. They are not. Plaintiffs may disagree with the state of the law, but Rule 11 prohibits them from filing fictional claims to protest it.... Bartoli v. A.R.D.C. of Ill. 1999 WL 1045210, at *3 (N.D.Ill. Nov. 12, 1999) (citations omitted), ajfd sub nom. Bartoli v. Richmond, supra, 2000 WL 687155. In May 2001, Vallone, Aegis, and Heritage also filed a class-action suit against the IRS and three of its agents (among other defendants) in the Southern District of Illinois, seeking damages of $556 billion for purported violations of the plaintiffs’ civil rights. That action was dismissed as devoid of merit in June 2003. Judge Plunkett’s November 1999 ruling in the Bartoli case was an unmistakable rejection of the legitimacy of the Aegis trusts, but in fact the defendants were on notice long before his ruling that the Aegis system was contrary to longstanding rules governing trusts and taxation. Prospective clients of Aegis who received warnings as to the legitimacy of the system from their own lawyers and' accountants frequently forwarded the negative opinions to Aegis personnel; copies of such opinions were later discovered in the files at Aegis headquarters. We' quoted earlier from one such opinion letter, which noted that the Aegis materials distributed at promotional seminars purporting to document the legality of the system were “full of errors, irrelevancies and partial truths followed by non sequiturs.” Gov’t Ex. Dunn Office 32, R. 962 Tr. 3395. We also noted that when Priess (posing as Mike Jordan) reported his own accountant’s description of the Aegis system as “bullshit,” Dunn assured him it was not the first time he had heard such language used in reference to Aegis. IRS Notice 97-24, issued in April 1997, reiterated the ways in which abusive trusts akin to those promoted by Aegis violated longstanding and well-known legal principles. This notice, as we have discussed was well-known to the Aegis principals, and copies of the notice were found in the Aegis headquarters. Then in June 1999, the United States Tax Court issued its decision in Muhich v. C.I.R., 1999 WL 390695 (U.S. Tax Court June 14, 1999), holding that a multi-trust system that Bartoli had sold to Frank and Virginia Muhich through Heritage was a sham lacking in economic substance that should be disregarded for tax purposes. Mr. and Mrs. Muhich owned a family photography business. They purchased a trust package from Heritage in 1994 after meeting with Bartoli; they subsequently engaged Aegis to help operate the trusts. The Muhichs’ system ultimately comprised five trusts, including an asset management trust, a business trust, a charitable trust, an equity trust, and a vehicle trust. Bartoli served as the initial trustee of the asset management trust, which was formed first, and following Bartoli’s resignation as the initial trustee, the Muhichs became the sole trustees and beneficiaries of that and the other four trusts. Most of the Muhich’s assets were assigned to the asset management trust, including Mr. Muhich’s right to receive compensation for his services. Once the trusts were in place, Mr. Muhich ran the family business just as he did before. In lieu of paying a salary to him, however, the business paid the asset management trust for his services, calling the payments “consulting fees.” The Muhichs, as officers of the asset management trust, assumed responsibility for managing the trust’s affairs, and as compensation for their services, the trust “agreed” to pay the family’s housing, transportation, health care, and other expenses. The asset management trust, of course, claimed deductions for those expenses; and any net income remaining after the deduction of those expenses was transferred to the charitable trust. The asset management trust thus reported zero taxable income, and the charitable trust (which made only modest charitable contributions) claimed exemption from taxation. The other trusts reported no income whatsoever. On the returns that the Muhichs themselves filed for 1994 and 1995, they reported no income in the form of compensation. The IRS determined that the trust arrangement was an abusive one that should be disregarded for tax purposes, and the Tax Court agreed. The court found that the trusts lacked any economic substance apart from tax considerations. The court pointed out that (1) the Muhichs’ relationship with their property did not change (“the Muhichs could manipulate, distribute, or otherwise use trust property at their whim”) (2) the trusts lacked an independent trustee (“[t]he fact that Bartoli served as a trustee for a limited time is meaningless; it was a paper appointment solely for the purpose of facilitating the creation of the trust scheme”); (3) “no economic interest in the trusts ever passed to anyone other than the Muhichs”; and (4) the Muhichs were not bound by any restrictions as to the use of trust property. Id., at *6-*7. The court noted that, overall, “the tangled web” of trusts did little more than conceal who really owned the assets and who earned the income assigned to the trusts. Id., at *7. In sum, petitioners established the trusts with an aim to avoid, improperly, Federal income tax. None of the trusts ever reported taxable income, and none of them conducted a legitimate business activity. Petitioners’ purpose for the trust scheme was to take untaxed money out of Midwest [the family business] and circulate it around the trusts to pay for the Muhichs’ personal expenses. The Muhichs admitted as much at trial. Although the Muhichs attempted to identify other nontax reasons for the trusts, we find these reasons incredible. Because the trusts lacked economic reality, the Court will ignore them for tax purposes. Id. (footnotes omitted). This decision to treat the trusts as a sham meant that the business income that had been diverted to the trusts would instead be treated as income to the Muhichs on which they would owe tax. The court went on to hold the Muhichs liable for a penalty equal to twenty percent of the amount of income they had underpaid in the relevant tax years based on their negligence in under-reporting their income. Id., at *10 — *11; see 26 U.S.C. § 6662(a) and (b)(1). In imposing that penalty, the court rejected the Muhichs’ contention that they had reasonably relied on the advice of Bartoli, among others, as to the legitimacy of the trusts. “Bartoli’s bias was obvious, and his ability to benefit financially by luring individuals into the scheme should have sent up a red flag. Petitioner is an experienced businessman who should have been suspicious of Bartoli’s claims.” Id., at *11. The court opted not to impose an additional penalty on the Muhichs under 26 U.S.C. § 6673(a)(1) for asserting a frivolous or groundless position in response to the IRS’s claims. The court agreed that the Muhichs’ contention that the trusts had economic substance indeed was frivolous; it rejected the penalty only because the Muhichs had prevailed on the distinct question whether the “consulting fees” paid by the Muhichs’ business to the asset management trust should be included in the Muhichs’ income as compensation or constructive dividends. Id. The Muhichs appealed the Tax Court’s decision to this court. We affirmed the Tax Court’s holding in January 2001, noting that it was wholly consistent with prior cases rejecting efforts to assign a taxpayer’s income and other assets to a trust, treat his personal expenses as deductible costs of trust administration, and avoid paying income taxes on his income. The Muhichs transferred their assets to the trusts and attempted to have their trusts pay all their personal expenses. As detailed above, courts have uniformly held that such transactions are a sham and that the Commissioner [of Internal Revenue] may disregard these sham trusts for tax purposes. This is what the Commissioner did and we can see no reason to overturn the decision of the Tax Court. 238 F.3d at 864 (footnote omitted). The executives of Aegis were keenly aware of the Tax Court’s decision in Muhich. The Muhichs may have purchased an early version of a trust system from Heritage (where Bartoli, Vallone, and Hopper developed the concept of a multitrust package aimed at tax avoidance), but their package of trusts was similar in essential respects to the Aegis system of trusts, and the Muhichs had in fact engaged Aegis to help them operate their trusts. Frank Muhich was spotted in the audience at the first Aegis seminar that Agent Priess attended in 1996, and in the wake of the Tax Court’s decision three years later, Hopper remarked to Priess that Muhich “was one of our CBO clients.” Priess Tr. 48; R. 944 Tr. 419. There was extensive discussion and correspondence both within Aegis and between Aegis representatives and existing and prospective clients regarding the Muhich decision. Publicly, Aegis officials put on a brave face when referencing the decision, attempting to distinguish the Aegis trusts from the Heritage system that the Muhichs had purchased and criticizing the Muhichs’ implementation and use of the system. Privately, some at Aegis feared that the Tax Court’s decision marked the beginning of the end of Aegis. As we discuss in greater detail later in this opinion, the adverse decision led to a schism between Hopper and Vallone: Hopper believed that Muhich’s description of the trusts as a sham exposed the Aegis principals to criminal liability for promoting the Aegis trusts; he thought that Aegis clients should be encouraged to seek out independent advice as to how they should proceed in the wake of Muhich. Vallone, on the other hand, thought that Aegis should increase its efforts to avoid and obstruct IRS inquiries into the Aegis trusts. The other red flag that signaled official disapproval of the Aegis system came in the form of the disciplinary complaint that the Illinois ARDC filed against Bartoli in November 1996. By this time, Bartoli had resigned as Aegis’s legal counsel, assumed inactive status with the Illinois bar, and relocated to Myrtle Beach, South Carolina; but he remained involved in the management of Aegis. The ARDC began investigating Bartoli after Richmond, who had been forced out of Heritage in 1994, complained to the ARDC about Bartoli. The complaint that the ARDC ultimately filed against Bartoli was premised primarily on the assertion that Bartoli had engaged in dishonesty, fraud, and deceit in promoting CBOs as a means of tax avoidance, because the applicable principles of trust, tax, and common law did not recognize the CBO as employed by Heritage, Aegis, and Bartoli as a viable entity. R. 916 Tr. 2652-53. Much like the Muhich litigation, then, the ARDC proceeding directly implicated the legitimacy of the Aegis system of trusts. We shall have more to say about the ARDC proceeding later in this opinion as we discuss an issue with respect to the evidence that the government offered at trial regarding that proceeding. For now it is enough to note that although only Bartoli was named as a respondent in the ARDC proceeding, the defendants were well aware of the proceeding. Vallone and Hopper, in addition to Bartoli, were deposed in the course of that proceeding. Copies of the ARDC documents were later discovered in the Aegis headquarters. And, as we have already noted, four of the defendants filed suit against the ARDC based on its conduct in investigating and charging Bartoli. Ultimately, a Hearing Board of the ARDC issued a Report and Recommendation in February 2000 proposing that Bartoli be disbarred in Illinois based on his conduct in connection with promoting and selling the CBOs. That proposal was adopted by the ARDC’s Review Board in December 2001, and Bartoli was formally disbarred by the Illinois Supreme Court in May 2002. By early 2000, it was apparent to all that the government had both Aegis and the firm’s clientele in its sights. Vallone would report in an April 2000 letter to Aegis clients that as of January 2000, some 150 Aegis members had received audit requests from the IRS, although he assured clients that the IRS dropped half of these “after one or two letters from us.” Gov’t Ex. Priess 26; R. 944 Tr. 435. On March 31, 2000, search warrants were executed at the Aegis headquarters in Palos Hills, Illinois, at Dunn’s office in Indiana, and at the offices of other individuals working with the defendants. Both documents and computers were seized during the search, making plain that the government was not only building a case against Aegis and its officials but attempting to identify the firm’s clients as well. Vallone would later testify that “new business was practically completely finished” at that point. R. 921 Tr. 5356. It would be another four years, however, before Aegis finally closed its doors. Aegis continued to service existing clients of the trust system; and Vallone led an ultimately unsuccessful effort to prevent the government from identifying those clients. Vallone initiated changes in the trust system in an ongoing effort to keep Aegis clients “off the radar screen” of the IRS. Kg., R. 944 Tr. 452-53, 455; R. 954 Tr. 5501-02. Vallone learned that the government had been able to identify some Aegis clients from the Schedule C forms (used to report income from sole proprietorships) that those clients had attached to their trust tax returns. R. 944 Tr. 438-39. Val-lone adopted a new business name — “The Fortress Trust” (which had the same address as the Aegis headquarters) — and under that name promoted a new “Tax Minimization Plan,” which employed a different type of trust and a limited liability company, so as to eliminate the type of tax return that called for a Schedule C. Existing Aegis clients were encouraged to switch to the new system — at a cost of several thousand dollars — in order to avoid scrutiny from the IRS. Dunn, in fact, had such a conversation with Agent Priess. Priess, in his role as Aegis client Mike Jordan, had a June 2000 meeting with Dunn in which Priess voiced skepticism whether he had an ongoing need for the services of Aegis Management. Dunn responded that Priess (Jordan) needed those services more than ever “[i]n light of the increased scrutiny and them [the IRS] now having the records” from the March 2000 search. Gov’t Ex. Priess Tr. 59; R. 944 Tr. 452. “There are ways to get those same benefits without having to be on the radar screen,” Dunn told Priess. Id. Tr. 452. In the meantime, changes were occurring within Aegis. Hopper resigned as the managing director of the firm in January 2000, although he remained on hand to provide assistance through April. Parker ceased his involvement as counsel in May 2000, after the Muhich decision caused him to seek independent advice as to the legitimacy of the Aegis trusts from three different tax attorneys, who informed him that the trusts were not valid. In May 2000, the same month as Parker’s departure, Dowd was named by Vallone to be the operations manager of both Heritage and Aegis. In a letter to Aegis clients announcing (among other events) Harper’s departure and Dowd’s promotion, Vallone described Dowd’s new role as a “purely administrative position, not managerial,” but added that Dowd “will greatly help me in carrying on with our operations.” Gov’t Ex. 27; R. 944 Tr. 450. In June 2000, Dowd, Cover and others joined what was known as the Aegis Advisory Board to counsel Vallone in his management of Aegis and the Fortress Trust. A discussion of the facts would not be complete without mention of the ways in which the defendants themselves used the Aegis trusts. The defendants not only promoted the Aegis trust system but used that system to hide the substantial income they reaped from sales of trust packages. (From 1997 through 2000, the total incomes earned by each defendant ranged from a low of $142,000 in Dowd’s case to a high of $1.5 million in Dunn’s case. Collectively, the defendants earned more than $6 million from the sale and management of Aegis trusts over the life of the scheme.) In some cases, the defendants failed to file tax returns at all: Vallone, Bartoli, and Hopper filed no individual tax returns for the years 1997 to 2000, for example. To hide the income they earned from Aegis and other sources, their paychecks were made payable to the trusts they controlled and were deposited into the bank accounts held by those trusts; the defendants then withdrew cash and paid for personal expenditures out of the trust accounts. None of the income funneled through the trusts was reported as income and thus no tax was paid on it. Vallone failed to report gross income of $700,000 from 1997 through 1999 (he was not charged for the 2000 tax year), on which he owed federal income taxes of $182,000. Bartoli failed to report gross income of over $600,000 in 1997 through 2000, on which he owed tax of $192,000. Hopper failed to report gross income of more than $814,0000 in those four years, on which his tax liability was more than $220,000. Like Vallone, Bartoli, and Hopper, Dunn did not file a federal income tax for 1999, although his gross income exceeded $438,000 that year. He did file tax returns for 1997 and 1998, but he reported only modest income of approximately $16,000 and $9,000 for those years, when his actual income exceeded $434,000 and $604,000 respectively. On the income that he failed to report in these three years, Dunn owed taxes totaling more than $315,000. Dowd and Cover both filed federal income tax returns in 1997 through 2000, but as with Dunn the returns they filed substantially under-reported their actual income. Dowd, for example, reported income of only $3,000 to $6,000 annually, although his gross income in those four years amounted to more than $211,000. He owed $55,000 on the income that he failed to report, while Cover owed an additional $84,000 on the income that he did not report for 1997 through 1999. Although the doors of Aegis did not close until 2004, the scheme was largely at an end by 2003. By that time, people were being summoned to testify about Aegis to a grand jury. In March 2003, the government conducted a second round of searches which included, among other locations, the Aegis headquarters and Val-lone’s homes in Illinois and Florida. The defendants were indicted in April 2004. Count One of the superseding indictment charged all of the defendants with conspiring to defraud the United States by impairing and impeding the functions of the IRS and to commit tax offenses against the United States. Í8 U.S.C. § 371. The defendants were also charged with multiple counts of mail fraud, 18 U.S.C. § 1341; wire fraud, 18 U.S.C. § 1343; aiding and assisting the filing of false tax returns by others, 26 U.S.C. § 7206(2); filing their own false tax returns, 26 U.S.C. § 7206(1); and tax evasion, 26 U.S.C. § 7201. After multiple continuances were granted at the requests of one or more of the defendants, an eleven-week trial commenced in February 2008 and concluded in May 2008. The jury convicted Vallone, Bartoli, Hopper, and Cover on all counts in which they were charged. Dunn was convicted on the conspiracy charge and fourteen tax-offense charges, but he was acquitted on nine counts of mail and wire fraud. Dowd was convicted on the conspiracy count, one count of mail fraud, and four counts of filing false tax returns but was acquitted on four mail and wire fraud counts and four counts alleging that he aided and assisted the filing of false tax returns by others. Each of the defendants was sentenced to a substantial term of imprisonment: Val-lone was ordered to serve a prison term of 223 months; Bartoli, 120 months; Hopper, 200 months; Dunn, 210 months; Cover, 160 months; and Dowd, 120 months. All six defendants appeal, raising a multitude of joint and individual issues that we resolve in turn below. II. JOINT ISSUES A. Speedy Trial Act Claim The trial in this case was originally set for June 29, 2004, R. 31, but was continued on multiple occasions thereafter at the request of various defendants. In a number of instances, these continuances were granted over the objection of the government, but at no time did any defense counsel voice an objection to the delays. However, in February 2008, shortly before the trial commenced, defendant Vallone moved to dismiss the indictment, contending that the multiple postponements of the trial date had violated his right to an expeditious trial under the Speedy Trial Act, 18 U.S.C. § 3161, et seq. (the “STA” or the “Act”). R. 408, 411. That Act grants a defendant the right to a trial commencing within seventy days after he is charged or makes an initial appearance, § 3161(c)(1), subject to certain authorized exceptions that permit time to be excluded from the seventy-day period, § 3161(h). See Zedner v. United States, 547 U.S. 489, 492, 126 S.Ct. 1976, 1981, 164 L.Ed.2d 749 (2006); United States v. O’Connor, 656 F.3d 630, 636 (7th Cir.2011), cert. denied, — U.S. -, 132 S.Ct. 2373, 182 L.Ed.2d 1024 (2012). On the defendant’s motion, the district court must dismiss the indictment if the trial does not commence within seventy non-excluded days. § 3162(a)(2). Principally, Vallone contended that from February 7 to May 3, 2007, the court had failed to enter an order properly tolling the running of the speedy-trial clock, so that by April 18, 2007, seventy days had elapsed and because the trial had not yet commenced, his right to a speedy trial had been violated. (Secondarily, Vallone suggested that “other time periods” were problematic because the court’s findings as to the excludability of these time periods were inadequate. But Vallone never identified which time periods he was relying upon.) At the hearing on Vallone’s motion, the government responded that the lack of an order entered between February 7 and May 3, 2007, was immaterial, because the court in December 2006 had continued the trial date at the request of the defendants until October 23, 2007, and had excluded time through that new trial date from the STA’s seventy-day mandate with the agreement of the parties. R. 1051 at 54-57; see R. 1057 at 6. The government presented the court with a transcript of the December 7, 2006 hearing at which this had occurred. R. 1051 at 58-59. After reading a portion of that transcript into the record, the court denied Vallone’s motion. R. 1051 at 64. Vallone, now joined by the other defendants, contends that the court erred in denying his motion. As the defendants acknowledge, “certain specified periods of delay are not counted” toward the STA’s seventy-day limit. Defendants’ Joint Br. 23 (quoting Zedner, 547 U.S. at 492, 126 S.Ct. at 1981); United States v. Wasson, supra, 679 F.3d at 944. One such exception, and the one most on point here, is a continuance of the trial date granted based on the court’s finding that “the ends of justice served by taking such action outweigh the best interest of the public and the defendant in a speedy trial.” § 3161(h)(7)(A) (formerly § 3161(h)(8)(A) as noted in O’Connor, 656 F.3d at 636 n. 2). The statute identifies a number of factors that the court must consider in deciding whether such a continuance is warranted. § 3161(h)(7)(B); see Wasson, 679 F.3d at 944. The district judge has broad discretion in weighing the pertinent factors and in determining whether a continuance is warranted. United States v. Rojas-Contreras, 474 U.S. 231, 236, 106 S.Ct. 555, 558, 88 L.Ed.2d 537 (1985); see also United States v. Broadnax, 536 F.3d 695, 698 (7th Cir.2008); United States v. Taylor, 196 F.3d 854, 860 (7th Cir.1999) (citing United States v. Blandina, 895 F.2d 293, 296 (7th Cir.1989)). Counterbalancing that open-ended discretion, however, is “procedural strictness”: The judge must set forth in the record, either orally or in writing, his reasons for concluding that a continuance is warranted by the ends of justice. § 3161(h)(7); Zedner, 547 U.S. at 509, 126 S.Ct. at 1990; see O’Connor, 656 F.3d at 639-40; United States v. Adams, 625 F.3d 371, 378-79 (7th Cir.2010). The defendants’ lead and principal argument on appeal, as it was below, is that the district court did not order the exclusion of time during the time period commencing on February 7, 2007, and ending on May 3, 2007. As the speedy trial clock consequently was running during that period, the defendants reason, the district court was obliged to start the trial no later than April 18, 2007 (seventy days after February 7). The fact that it did not shows that they were deprived of their right to a speedy trial and compelled the district court to grant Vallone’s request that the indictment be dismissed. § 3162(a)(2). We conclude that the defendants have waived this argument. The argument, as we have said, assumes that there was no order at all excluding time between February 7, 2007, and May 3, 2007, such that the speedy trial clock expired in April. This argument overlooks the fact that the court on December 7, 2006, had already continued the trial date from February 7, 2007, on motion of defendants, to October 23, 2007, and had orally excluded time, by agreement. The government relied on the December 7 continuance, and the surrounding context, as adequate to support the exclusion of time under the STA’s ends-of-justice provision. It is clear that the court itself relied on what had transpired on December 7 to deny Vallone’s motion: the court, after all, read the relevant portion of the December 7 transcript into the record in ruling on the motion. R. 416; R. 1051 at 64. It made the point even more explicitly in its order denying the defendants’ post-trial motions for judgments of acquittal, where it noted that it had granted the continuances based on defense counsels’ representations regarding the complexity of the case and the length of time needed to prepare for trial. R. 650 at 7-8. So the threshold question presented by the appeal on this issue is whether, as the government and the district court concluded, the December 2006 continuance of the trial date and the accompanying exclusion of time complied with the STA’s ends-of-justice provision. (To the extent the defendants presume that exclusion must take the form of a written order, they are mistaken. Our decision in United States v. Napadow, 596 F.3d 398, 405 (7th Cir.2010), leaves no doubt that a written order is not required so long as the district court’s oral remarks make clear its intent to exclude time. See also O’Connor, 656 F.3d at 639-40; Adams, 625 F.3d at 380.) Yet, in their lead brief, the defendants make no mention at all of what took place on December 7, 2006, let alone any argument as to why the court’s oral directive that time would be excluded from December 7, 2006, to October 23, 2007, was insufficient to comply with the STA. There can be no reasonable excuse for this omission. The December continuance and exclusion of time was the centerpiece of the govern-merit’s response to the motion to dismiss below and was repeated when the defendants reasserted the speedy trial issue in their post-judgment motions for acquittal. The record leaves no doubt that the district court itself relied on the events of December 7, 2006, as the basis for its decision to deny Vallone’s motion to dismiss and likewise to deny the defendants’ post-judgment motions for acquittal as to this issue. But the defendants’ lead brief is altogether silent as to December 7. They belatedly address the subject in their reply brief, but this is too late. E.g., United States v. Stevenson, 656 F.3d 747, 753 (7th Cir.2011) (citing United States v. Boisture, 563 F.3d 295, 299 n. 3 (7th Cir.2009)). Having altogether ignored the rationale for the district court’s ruling in presenting the issue and making their initial argument on appeal, the defendants have waived this aspect of their challenge. See Bonte v. U.S. Bank, N.A., 624 F.3d 461, 466 (7th Cir.2010) (failure to grapple with basis for district court’s decision to dismiss case, and to respond to defendant’s arguments in support of dismissal, results in waiver of appeal); In re Snyder, 152 F.3d 596, 599-600 (7th Cir.1998) (although, in bankruptcy appeal, appellate court’s review is not confined to district court’s findings but ext