United States v. Edelman

majority opinion

UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF COLUMBIA

UNITED STATES OF AMERICA,

Criminal Action No. 24-239-1 (CKK)

DOUGLAS EDELMAN,

Defendant.

MEMORANDUM OPINION

(October 28, 2026)

Defendant Douglas Edelman faces a thirty-count indictment charging him with conspiring

to defraud the United States from 2008 to 2021, making false statements to the Department of

Justice in 2016, making false statements to the Internal Revenue Service in 2018, evading taxes

on his income from 2006 to 2020, and filing false reports of his foreign bank accounts with the

IRS from 2007 to 2012 and again from 2015 to 2020. Edelman has pled guilty to some, but not

all, of these charges. At the parties’ request, the Court has agreed to proceed to sentencing on the

charges to which Edelman has pled guilty while holding the remaining charges in abeyance.

At sentencing, the counts to which Edelman has pled guilty will be grouped and treated as

one. Edelman’s base offense level for this count will be determined by the “total tax loss”

attributable to his offense. In determining the total tax loss attributable to Edelman’s offense, the

Sentencing Guidelines direct the Court to consider the tax loss attributable to all of Edelman’s

“relevant conduct,” which is defined in this context as “all conduct violating the tax laws” that is

not “clearly unrelated” to his offense. The parties agree that courts routinely accept as relevant

conduct facts relating to uncharged counts that are proven by a preponderance of the evidence.

Where they disagree is the application of that practice here.

For all intents and purposes, the total tax loss attributable to Edelman’s offense will be a

product of the loss stemming from Edelman’s failure to report profit distributions he received from

the company Mina/Red Star, which he co-founded with a Kyrgyz national to sell jet fuel to the

U.S. military. It is undisputed that Edelman failed to report profit distributions from Mina/Red

Star in tax years 2006 through 2020, and he is charged with a count of tax evasion for each of these

years. Based on this failure and associated deceptive conduct, Edelman has pled guilty to willfully

evading taxes on hundreds of millions of dollars that he received as income from Mina/Red Star

during tax years 2006 through 2012. Edelman does not dispute including any tax loss from 2006

through 2012 in the calculation of the total tax loss attributable to his offense.

Edelman maintains his innocence, however, with respect to the charges of tax evasion for

tax years 2013 through 2020. According to Edelman, he did not receive any profit distributions

from Mina/Red Star from 2013 through 2020 because he “contributed” his ownership interest in

the company to his wife’s trust—the Galactea Trust—in 2013. Edelman therefore argues that the

Court should only consider the tax loss stemming from tax years 2006 through 2012 in calculating

the total tax loss attributable to his offense. The Government disagrees. According to the

Government, the Court should include any tax loss stemming from tax years 2013 through 2020

in its calculation because the Galactea Trust was a sham trust that did not change Edelman’s

economic relationship to Mina/Red Star or its profit distributions. The Government, in other

words, argues that Edelman continued to receive Mina/Red Star’s profit distributions as his income

from 2013 through 2020, and that the Court should therefore calculate the total tax loss attributable

to Edelman’s offense by tallying the loss stemming from Edelman’s admitted 2006–2012 tax

evasion and his charged 2013–2020 evasion.

Accordingly, to calculate the total tax loss attributable to Edelman’s offense and thereby

determine his base offense level at sentencing, the Court must first determine whether the

Government has shown by a preponderance of the evidence that the Galactea Trust was a sham

trust that did not change Edelman’s economic relationship to Mina/Red Star or its profit

distributions. If the Government fails to show that the Galactea Trust was a sham trust, then the

Court will only consider the loss stemming from tax years 2006 through 2012 when calculating

the total tax loss attributable to Edelman’s offense. If the Government does show that the Galactea

Trust was a sham trust, however, then the Court will consider whether the Government has shown

by a preponderance of the evidence that Edelman willfully attempted to evade income tax on the

profit distributions he received from Mina/Red Star for tax years 2013 through 2020. And if the

Government makes this second showing, then the Court will consider the loss stemming from tax

years 2006 through 2020 when calculating the total tax loss attributable to Edelman’s offense.

Upon consideration of the parties’ submissions, 1 evidence gathered from Edelman’s plea

hearing, evidence gathered from the Court’s evidentiary hearing, the relevant legal authority, and

the entire record, the Court concludes that the Government has made both showings. While the

Galactea Trust was organized on paper in accordance with the applicable foreign law, the

Government has shown that its purported structure did not change Edelman’s control over

Mina/Red Star’s operations and the income it generated through profit distributions. The Court

will therefore disregard the Galactea Trust, finding it is a sham trust. In addition, the Government

The Court’s consideration has focused on the transcript of Edelman’s May 21, 2025, plea hearing, Dkt. No. 79 (“Plea Hr’g Tr.”); Edelman’s Sentencing Memorandum, Dkt. No. 115 (“Def.’s Mem.”), and accompanying exhibits, including the Expert Report of John Machell, KC, Dkt. No. 119; the Government’s Sentencing Memorandum, Dkt. No. 116 (“Gov’t’s Mem.”), and accompanying exhibits, Dkt. No. 118; transcripts from the four-day deposition of Edelman’s longtime accountant Graham Collett, Dkt. Nos. 118-26–29; the Government’s Response to Edelman’s Sentencing Memorandum, Dkt. No. 125 (“Gov’t’s Resp.”); Edelman’s Response to the Government’s Sentencing Memorandum, Dkt. No. 126 (“Def.’s Resp.”), and accompanying exhibits; the Government’s additional exhibits, Dkt. No. 132; and the transcript of the Court’s April 29, 2026, evidentiary hearing, Dkt. No. 135 (“Evid. Hr’g Tr.”).

has shown that Edelman continued to willfully evade taxes on the Mina/Red Star profit

distributions he received as income from 2013 through 2020 in much the same way he has admitted

to evading taxes on the distributions he received as income from 2006 through 2012—namely, by

obfuscating his ownership, making misrepresentations, and shielding his role in the spending of

its income. Accordingly, at sentencing, the Court shall consider any tax loss stemming from tax

years 2006 through 2020 when calculating the total tax loss attributable to Edelman’s offense.

I. BACKGROUND

A. Factual Background

On May 21, 2025, Edelman entered, and the Court accepted, his partial plea in open court.

See Plea Hr’g Tr., Dkt. No. 79. In doing so, Edelman pled guilty to conspiring to defraud the

United States from 2008 through 2021 (Count One); making false statements to the Internal

Revenue Service in October 2016 (Count Two); making false statements to the Department of

Justice in March 2018 (Count Three); and willfully attempting to evade and defeat income taxes

for tax years 2006 through 2012 (Counts Four through Ten). See id.; Indictment, Dkt. No. 1. All

facts drawn from Edelman’s plea hearing are facts that Edelman has admitted to.

Following Edelman’s plea, the Court held an evidentiary hearing to determine whether the

Galactea Trust was a sham trust and, if so, whether Edelman willfully evaded taxes on his income

for tax years 2013 through 2020. See Evid. Hr’g Tr., Dkt. No. 135. In preparation, the parties

submitted briefs and introduced evidence into the record. See Def.’s Mem., Dkt. No. 115 (and

accompanying exhibits); Gov’t’s Mem., Dkt. No. 116 (and accompanying exhibits); Def.’s Resp.,

Dkt. No. 126 (and accompanying exhibits); Gov’t’s Resp., Dkt. No. 125 (and accompanying

exhibits). When referencing evidence drawn from the evidentiary hearing and the parties’

submissions, the Court shall identify the source of the evidence and indicate whether the evidence

is undisputed, unopposed, or disputed.

1. The Rise of Mina/Red Star

In the 1990s and early 2000s, Douglas Edelman was living and working as a commodities

trader in Bishkek, Kyrgyzstan. Plea Hr’g Tr. at 17:19–18:13. Following September 11, 2001, the

U.S. military began using the Manas Air Base near Bishkek to supply U.S. troops in the Middle

East. Plea Hr’g Tr. at 17:19–18:13. This led to a need for jet fuel. Id. Drawing on his connections

in the region, Edelman and a Kyrgyz national named Erkin Bek bid on and won a contract with

the U.S. Department of Defense (“DOD”) to provide jet fuel to the U.S. military. Id. at 18:15–25.

And so began the company that would come to be known as Mina/Red Star.

Edelman and Bek won their initial contract with the DOD in the name of Red Star

Enterprises Limited, which was a Canadian company owned by Bek. Id. Edelman invested

hundreds of thousands of dollars to fund Red Star’s startup costs and early operations through two

other companies that he owned: Aspen Wind Corporation and Bartol Limited. Id. at 19:3–21. Red

Star grew quickly and continued to win contracts to supply the U.S. military with jet fuel. Id.

In 2003, Edelman created a sister company to Red Star named Mina Corp Limited. Id. at

19:22–20:4. Mina Corp was incorporated in Gibraltar. Id. In 2004, Edelman reincorporated the

Red Star entity in Gibraltar as well. Id. These entities were known collectively as Mina/Red Star,

which was owned in a 50/50 partnership between Edelman and Bek. Id.

From the founding of Mina/Red Star through 2008, Edelman routinely executed bank

documents showing that he was the ultimate beneficial owner (“UBO”) of his half of Mina/Red

Star. Id. at 20:5–12. Edelman began receiving profit distributions from Mina/Red Star once it

became profitable in 2005. Id. From 2005 to 2008, Edelman used Swiss bank accounts for his

companies Aspen Wind and Bartol to receive profit distributions from Mina/Red Star. Id. These

accounts were primarily with Credit Suisse. Id. Edelman used his profit distributions, among

other things, to send money to his U.S. family members, invest in other businesses, and purchase

property around Europe, including a home in Ibiza, Spain. Id. at 20:15–21. The Government has

introduced evidence showing that, from 2006 through 2008, the Swiss bank accounts for Aspen

Wind and Bartol received approximately $50,000,000 in profit distributions from Mina/Red Star.

Gov’t’s Mem. at 5 (citing Gov’t’s Ex. 25-1, Dkt. No. 118-9). Edelman does not dispute the

accuracy of this evidence. Evid. Hr’g Tr., Dkt. No. 135 at 7:18–8:6. Although these Swiss

accounts were not in Edelman’s name, Edelman was the ultimate beneficial owner. Plea Hr’g Tr.

at 20:22–21:7.

In November 2008, Credit Suisse notified Edelman’s longtime accountant Graham Collett

that, due to U.S. law enforcement activity regarding the use of Swiss banks for tax evasion,

Edelman had to either disclose to U.S. authorities that his accounts belonged to a U.S. person or

close his accounts and transfer the balance elsewhere. Id. Edelman chose the latter. In December

2008 and January 2009, Edelman, with the assistance of Collett, moved his funds from Credit

Suisse to an account he had recently opened at Bank Julius Baer in Singapore under the name of

the Sunage Foundation. Id. 21:8–22:3.

The Sunage Foundation was a Panamanian entity that Edelman created in April 2008. Id.

The Government and Edelman’s counsel have both explained that, under Panamanian law, a

“foundation” operates much like a trust. See Evid. Hr’g Tr., Dkt. No. 135 at 8, 23. The purported

beneficiaries of the Sunage Foundation were Edelman’s French wife, Delphine Le Dain, and their

children. Plea Hr’g Tr. at 21:8–22:3. But Edelman has admitted that this structure was a sham

and that he was the ultimate beneficial owner of the Sunage Foundation. Id. Starting in 2009,

Edelman began directing his Mina/Red Star profit distributions to the Sunage Foundation. Id. at

21:8–25. The Government has introduced evidence showing that, in 2009 and 2010, the Sunage

Foundation account at Bank Julius Baer received approximately $48,000,000 in distributions from

Mina/Red Star. Gov’t’s Ex. 25-1, Dkt. No. 118-9. Edelman does not dispute the accuracy of these

figures. Evid. Hr’g Tr. at 7:18–8:6. And he admits to being the ultimate beneficial owner of this

account. Plea Hr’g Tr. at 21.

In 2010, the House of Representatives’ Committee on Oversight and Government Reform,

Subcommittee on National Security and Foreign Affairs (the “Subcommittee”), began

investigating allegations of corruption in connection with Mina/Red Star’s contracts with the

Department of Defense. Plea Hr’g Tr. at 22:4–13. As part of this inquiry, the Subcommittee

became interested in the identity of Mina/Red Star’s owners. Id.

At this point, Edelman had not filed U.S. tax returns to report the millions of dollars he had

earned from Mina/Red Star and had not paid U.S. taxes on his income. Id. at 22:14–23:1. Edelman

has admitted that, rather than disclose his ownership of Mina/Red Star, he caused his attorneys to

tell the Subcommittee a false story that his wife, Le Dain, (i) founded Mina/Red Star with Bek, (ii)

owned 50 percent of Mina/Red Star, and (iii) held her interests through the Sunage Foundation.

Id. This false story was beneficial to Edelman because Le Dain’s French citizenship meant she

had no U.S. tax obligations for her income earned outside the United States. Id. According to

testimony from Edelman’s longtime accountant Collett, Edelman made it clear to those he worked

with that this false story would be “the party line” going forward. See Collett Dep. (Feb. 4, 2025),

Dkt. No. 118-27 at 86:2–13. Collett further admitted to going along with the party line even though

it contradicted the documents he had seen and the experience that he had in his years of working

on these businesses with Edelman. See Collett Dep. (Feb. 5, 2025), Dkt. No. 118-28 at 45:8–12.

While causing these false representations to be made to the Subcommittee, Edelman, with

the assistance of Collett, caused the creation of false and backdated paperwork to corroborate Le

Dain’s purported ownership of Mina/Red Star and remove his name from the Sunage bank account

at Bank Julius Baer. Plea Hr’g Tr. at 23:2–7; see also Gov’t’s Mem. at 7 (citing Collett Dep. (Feb.

4, 2025) at 9–60; Collett Dep. (Feb. 5, 2025) at 14–50)). During the solicitation of a contract worth

hundreds of millions of dollars with the U.S. Department of Defense (“DoD”) in late 2010, the

DoD asked Mina/Red Star for the identity of the company’s owners. Id. at 23:10–20. In response,

Edelman caused Mina/Red Star to falsely certify that it was owned by Le Dain and Bek. Id. The

DoD again asked Mina/Red Star to identify its owners during the solicitation of another contract

worth hundreds of millions of dollars in 2011, and Edelman again caused Mina/Red Star to falsely

certify that it was owned by Le Dain and Bek. Id.

From 2010 through late 2012, Edelman continued to direct his profit distributions from

Mina/Red Star into the Sunage Foundation account. Id. at 23:22–24:5. The Government has

introduced evidence showing that, in 2011 and 2012, Edelman earned approximately $65 million

in income from Mina/Red Star. Gov’t’s Mem. at 7 (citing Gov’t’s Ex. 25-1, Dkt. No. 118-9). This

brought Edelman’s total income from 2006 through 2012 to over $168 million. Id. Edelman did

not file any tax returns during this time, although he did consult a tax attorney in 2010. Id. (citing

Collett Dep. (Feb. 4., 2025) at 64–5, 82–8).

Edelman spent his income from Mina/Red Star in a variety of ways throughout 2006 to

2012. For instance, he has admitted to using his Mina/Red Star income from this time to make a

variety of investments, including investments in a music television franchise in Eastern Europe, a

land venture in Tulum, Mexico, and a farm in Kenya. Plea Hr’g Tr. at 23:22–24:5. He has also

admitted to using his Mina/Red Star income from this time to make personal purchases, such as a

luxury townhome in London. Id. Testimony from Edelman’s longtime accountant Collett—whom

Edelman used to make many of these investments and purchases—provides additional examples.

For instance, Collett testified that Edelman used income generated from Mina/Red Star to purchase

a ski chalet in Austria and a house in Ibiza, Spain. Collett Dep. (Feb. 4, 2025) at 128–37; Collett

Dep. (Feb. 6, 2025) at 18–9. Collett also explained that Edelman purchased hundreds of thousands

of dollars of Palantir shares. Collett Dep. (Feb. 4, 2025) at 135–8. Edelman also gave $580,000

to his son from a previous marriage. Collett Dep. (Feb. 3, 2025) at 122–24. “On paper we will

structure it as a loan to his Company,” he directed Collett over email regarding the gift to his son,

“This is mainly for his tax purposes, as I am really just giving him the money.” Id. at 123–24.

In detailing how Edelman directed the transfer of funds from various accounts to pay for

his purchases and investments, Collett explained that Edelman was careful not to own any of the

property he purchased in his own name. See Collett Dep. (Feb. 4, 2025) at 101–44; Collett Dep.

(Feb. 3, 2025) at 108. A 2008 email from Edelman to Collett provides a good example. See

Gov’t’s Ex. 14-31, Dkt. No. 132-1. Edelman opened the email by asking Collett to “handle” his

purchase of an $11 million house in London, adding that they “simply need[ed] to decide who is

the best for ownership, for tax purposes // wife and kids maybe . . . i do have a foundation?” Id.

Edelman then detailed some of his anticipated spending over the coming months—“at least 2

million” on a Billy Graham movie and “1 million or 1.5 million” to purchase MTV networks in

Eastern Europe. Id.; Collett Dep. (Feb. 3, 2025), Dkt. No. 118-26 at 109. Edelman concluded by

assuring Collett, who would be the one directing these payments, of the financials: there would be

“another usd 5 million [arriving] to bartol in the next couple of days,” and if more was needed,

Edelman “[had] other amounts [he could] lay [his] hands on pretty easily, so all should be ok.” Id.

2. The Restructuring of Mina/Red Star and the Galactea Trust

As indicated above, Edelman admits that, in 2003 and 2004, he incorporated Mina/Red

Star in Gibraltar and owned the business in 50/50 partnership with Erkin Bek until 2012. See Plea

Hr’g Tr. at 19:22–20:4. He admits that, in 2010 and 2011, he spread the false narrative—to, among

others, Congress and the Department of Defense—that his wife, Le Dain, founded Mina/Red Star

with Bek and owned it as Bek’s partner, and that he later helped create false, backdated paperwork

and even attempted to change Gibraltar’s public registration database to corroborate this false

narrative. Id. at 22–24, 28. And he admits that, for tax years 2006 through 2012, he willfully

evaded taxes on the hundreds of millions of dollars he earned as Mina/Red Star’s co-owner by (i)

making false statements to U.S. authorities; (ii) using nominees to conceal income and assets; (iii)

creating false documents; (iv) closing accounts and moving funds to avoid his name being

disclosed to U.S. authorities; (v) providing false information to banks, attorneys, and tax return

preparers regarding his income, assets, financial accounts, and the historical ownership of

Mina/Red Star; and (vi) filing false tax returns. Id. at 29–30.

Edelman also admits that he did not report income from Mina/Red Star on his returns for

tax years 2013 through 2020. Id. at 26:22–27:25. But he does not admit to the charges of tax

evasion for those years. That is because, according to Edelman, he did not owe any taxes on

Mina/Red Star’s income after he “contributed” his 50% share in the company to a trust—the

Galactea Trust—in 2013. See Def.’s Resp. at 3; Evid. Hr’g Tr. at 20.

Edelman’s purported transfer of his 50% share in Mina/Red Star to the Galactea Trust

coincided with a broader restructuring at Mina/Red Star that began in 2012—what Collett referred

to as a “new regime.” Collett Dep. (Feb. 4, 2025) at 98; see also Gov’t’s Mem. at 9. Collett

testified that, as part of this new regime, Mina/Red Star’s business was “transferred out” of the

Gibraltar-based entities that Edelman formed in 2003 and 2004 and “into a new structure” that

involved numerous layers of ownership. Id. At the core of this new structure was the new Mina

Petroleum, now incorporated in the UAE, and the new Red Star Enterprises, now incorporated in

Hong Kong—referred to collectively, again, as Mina/Red Star. Gov’t’s Ex. 4-5, Dkt. No. 118-1

at 16. The entities forming the new Mina/Red Star were owned by a BVI company called

Yellowstone Resources Management Limited (“Yellowstone”), which was in turn owned by a BVI

partnership called Global Resources Worldwide LP (“Global Resources”), half of which was

owned by a BVI company called Rosbelt International Limited (“Rosbelt”). Id. Through its

ownership of Rosbelt, the Galactea Trust owned 50% of Mina/Red Star, at least on paper. Id.

Edelman claims that he “contribut[ed]” his 50% share in Mina/Red Star to the Galactea

Trust. See Def.’s Resp. at 3 (where Edelman argues that “[t]he government now bears the burden

of proving that during 2013-2020, following his contribution of [Mina/Red Star] to his wife’s trust,

all the income earned during those late years was actually his”); Evid. Hr’g Tr. at 20 (where

Edelman’s counsel confirms that the phrase “his wife’s trust” means the Galactea Trust). But there

is no evidence in the record of Edelman contributing his 50% share in Mina/Red Star to the

Galactea Trust. Instead, the record shows that the law firm responsible for vetting the Galactea

Trust—Mishcon de Reya—was told the same lie about Mina/Red Star’s ownership that Edelman

had been telling since the congressional investigation in 2010: that Le Dain already owned 50%

of Mina/Red Star through the Sunage Foundation. 2 See Gov’t’s Ex. 4-5, Dkt. No. 118-1 at 54

(Mishcon de Reya’s report regarding the organization of the Galactea Trust); Collett Dep. (Feb. 5,

2025) at 44–5 (where Collett testifies that Edelman lied to the outside attorneys that created the

Galactea Trust by telling them that Le Dain had always been the 50% owner of Mina/Red Star).

The record also shows that the firm responsible for organizing the Galactea Trust was told the

same lie. See Def.’s Ex. 15, Dkt. No. 126-3. In other words, the record, at least in isolation,

appears to render Edelman’s claim that he contributed his 50% share of Mina/Red Star to the

As the Government points out, this shows an additional falsity, as “[e]ven Edelman and Collett’s 2010 attempts to create backdated documents [for Mina/Red Star] only stated that Le Dain had been the owner, not the Sunage Foundation.” Gov’t’s Mem. at 10 n. 5 (citing Gov’t’s Ex. 14-50, Dkt. No. 118-4). While Edelman had discussed transferring his 50% ownership of Mina/Red Star to the Sunage Foundation in 2010, he ultimately decided not to do so because it would have “show[n] real time[] dates.” Gov’t’s Ex. 14-49, Dkt. No. 118-3.

Galactea Trust an impossibility, as the Galactea Trust’s organizing documents show that those

responsible for creating the Galactea Trust acted under the misrepresentation that Le Dain already

owned 50% of Mina/Red Star.

Edelman offered an explanation for this apparent discrepancy during the evidentiary

hearing: “he had been lying about [his ownership of Mina/Red Star] before,” so “he continued that

lie.” Evid. Hr’g Tr. at 20:17–21. More to the point, Edelman “agree[s] that he lied to [the Galactea

Trust’s trustee] about whether he owned [Mina/Red Star,] [a]nd that is why the KYC

documentation says his wife owned it.” Id. at 21:3–4. While this explanation raises additional

questions about Edelman’s relationship with the Galactea Trust’s trustee, it aligns with the other

evidence in the record. For instance, in January 2012, Edelman emailed Collett a litany of lies to

“write and present” to Mina/Red Star’s general counsel “to put [him] into the picture” about

Mina/Red Star’s restructuring, including: that Mina/Red Star “was seeded and has always been

owned by Le Dain . . . and another shareholder”; that Edelman was “NOT the beneficial owner

and has never been paid dividends”; that Edelman “did not operate the [Mina/Red Star] account at

all and worked on an advisory basis to Le Dain”; that “those who filled out the various forms” at

Mina/Red Star “mistakenly . . . used the name of douglas edelman . . . as the shareholder and true

beneficial owner of the company”; and that “in fact [Edelman] was only fully recently advised that

his name appears on the account.” Gov’t’s Ex. 24-1, Dkt. No. 118-8 (cleaned up).

The deed of settlement for the Galactea Trust was executed on December 23, 2012, upon

the false foundation that Le Dain owned 50% of Mina/Red Star and would be granting it to the

Trust. See Def.’s Ex. 2, Dkt. No. 119-10 (the “Galactea Deed”). The deed identifies the grantor

as Delphine Le Dain, Edelman’s wife. Id. at 2. It identifies the original trustee as Salamander

Associates Limited, id., which was “a professional trust administration company organized under

the laws of the British Virgin Islands” that was “owned and operated” by Leonard O’Brien, Def.’s

Mem. at 22. 3 And it identifies the original protector as Graham Collett, Edelman’s longtime

accountant. Galactea Deed at 2. The Trust was governed by the laws of either the British Virgin

Islands (BVI) or England & Wales during the relevant period. See Def.’s Mem. at 17; Def.’s

Expert Rep., Dkt. No. 119-1. But the Government does not dispute whether the Galactea Trust

was organized on paper in accordance with the requirements of the applicable foreign law. See

Gov’t’s Resp. at 3. Rather, “the core of the government’s allegation is that Edelman intentionally

created a complex web of foreign trusts and entities in order to hide behind, precisely so that he

could obscure his income and ownership” of Mina/Red Star. Id. at 3–4.

3. Edelman and Mina/Red Star Post-Galactea Trust

On paper, the Galactea Trust owned half of Mina/Red Star in partnership with Erkin Bek

starting, at the latest, on December 23, 2012. See Galactea Deed, Def.’s Ex. 2, Dkt. No. 119-10.

But the Government argues that “[t]he new trust structure did not change anything with respect to

Edelman’s running the business, receiving distributions, and spending the funds.” Gov’t’s Mem.

at 10.

The Government’s argument finds support in the record, which shows that Edelman

continued to exercise significant influence and control over Mina/Red Star’s operations following

the restructuring. For instance, a January 2015 email chain shows Edelman, Bek, and their

Mina/Red Star associate Steve Buscher—who was “engaged with [Bek] and [Edelman] is crafting

a new BOD”—discussing whether to terminate Mina/Red Star’s CEO (Graham O’Donoghue) and

As Edelman explains, Salamander Associates acted as trustee of the Galactea Trust from 2012 to November 2019. Def.’s Mem. at 22. A November 2019 amendment replaced Salamander Associates with Salamander Corporate Services SA, which was a Swiss company also owned and operated by Leonard O’Brien. Id. When referring to the purported trustee of the Galactea Trust, the Court shall simply refer to Leonard O’Brien or “Salamander.”

CFO (Zack Friedman) and their potential severance packages. 4 Gov’t’s Ex. 25-2, Dkt. No. 118-10 at 1. The discussion opens with Buscher reporting to Edelman and Bek—referring to them

collectively as “D&E”—that O’Donoghue “seem[ed] . . . ‘weary’ from trying to fulfill your

expectations.” Id. at 3. The conversation then moves to Friedman, with Buscher writing that

O’Donoghue had told him that “D&E made it clear that if [Friedman] didn’t work out, it was on

[O’Donoghue’s] shoulders, and [O’Donoghue would] take the heat if D&E want[ed] to get rid of

[Friedman].” Id. at 2. The discussion ends with Edelman—writing from the email,

“[email protected]”— giving direction on next steps: “Let’s be fair and reasonable, let [Friedman] go

for sure . . . [and] do right by [O’Donoghue] as I think despite everything he did a good job in

organising [sic] and cleaning up some situations that he walked into. I suggest we just get these

figures clear and move it forward from there.” Id. at 1.

A few months later, Edelman sent Bek a long email—this time from the email address,

“[email protected]”— expressing his concern over “how much cash we are burning every

day,” particularly on employees. Def.’s Ex. 14, Dkt. No. 126-2 at 2. “Bottom line is we MUST

run the business at a profit as it will make even more difficult to find loans and or potential buyer’s

or investors,” Edelman wrote, adding, “Let’s review literally everyone .. I’m sure we will find

loads of expenses we pay every day and every month that are not essential.” Id. Bek, responding

in all caps, agreed regarding employee compensation. Gov’t’s Ex. 25-3, Dkt. No. 118-11 at 2

(“WE DEFINITELY NEED TO REVISE COMPENSATION PACKAGES.”). Bek also

suggested that he and Edelman consolidate control over Mina/Red Star: “I WAS WONDERING

FOR US TO CONSIDER AND DECIDE FOR SOMEONE BETWEEN YOU AND I TO TAKE

ULTIMATE POWER SO WE CAN CUT OUT INEFFICIENCIES,” wrote Bek, “AND JUST

The Government represents that the individuals mentioned in these emails were Mina/Red Star’s CEO and CFO. Gov’t’s Mem. at 10. Edelman does not dispute this representation.

HAVE ONE DECIDER OF EVERYTHING, A CONTROLLING HOLDER.” Id. Bek further

explained to Edelman that it “might be relevant for one partner to take out all his equity and lower

stake to 25pct for instance and for the other controlling stakeholder to manage the company

BECAUSE WE NEED SOME SERIOUS NO JOKING LEADERSHIP.” Id. Edelman agreed

with his partner’s assessment: “You and I need to speak with a single voice and give serious solid

directions and instructions to people asap,” he said, adding that he was going to ask one of

Mina/Red Star’s employees for “deep accounting information” so he could “analyse [sic] it all.”

Id. at 1.

Edelman’s influence and control over Mina/Red Star appeared to extend beyond its internal

business operations even after his half of the company was purportedly transferred to the Galactea

Trust. In July 2016, Edelman—this time writing from the email address,

“[email protected]”—discussed selling Mina/Red Star with Bek, explaining that it would

be “very difficult” to sell some of the company but that he had “an idea what I’d accept.” 5 Gov’t’s

Ex. 25-4, Dkt. No. 118-12. Mina/Red Star’s employees also appeared to treat Edelman as the partowner of Mina/Red Star even though Le Dain, through the Galactea Trust, was the part-owner on

paper. When the DoD asked Mina/Red Star for the phone numbers of its owners in 2018, an

employee emailed Erkin Bek and Edelman asking them to “share [their] respective cell numbers

(ie, Erkin and Delphine 6).” Gov’t’s Ex. 25-5, Dkt. No. 118-13 at 1 (emphasis added). The

employee appeared to apologize for requesting the phone numbers, explaining that they had

“pushed as much as we could” and had the DoD agree to forgo other informational items “such as

. . . ownership start date” before adding, “do not know if they will try calling the numbers, but

Edelman does make a passing reference to a trust in this exchange, writing that “their [sic] is a preference by the Trust to sell and enter into other things.” Id. at 3.

Le Dain’s first name.

better be ready in case someone does call.” Id. Edelman provided Le Dain’s landline in response,

explaining that she “rarely uses” a cell phone. Id. As to the prospect of Le Dain receiving a phone

call from the DoD, Edelman said that he was “not sure what she say [sic] if she got a call” because

she was “so ‘not involved.’” Id.

The record indicates that the restructuring of Mina/Red Star did not appear to change

Edelman’s relationship with Mina/Red Star’s profit distributions, either. A February 2016

exchange between Edelman and Bek shows that Edelman was directing dividend distributions

following the restructuring. “I like jerome or whomever to issue dividends . . . 2m each side”

Edelman wrote to Bek, adding that they needed to “use credit lines and not be so lazy and quite

[sic] using cash.” Gov’t’s Ex. 25-6, Dkt. No. 118-15. Moreover, Edelman admits that the Sunage

Foundation—which Edelman admits was a “sham” trust that he used to receive Mina/Red Star

distributions—continued to receive distributions from Mina/Red Star after the Galactea Trust was

created and purportedly owned those distributions. Evid. Hr’g Tr. at 22–23. Specifically, the

record shows that Edelman’s Sunage Foundation account at Bank Julius Baer received the

following payments from Mina/Red Star after the Galactea Trust was created: an April 2013

transfer of $2,789,654.72 for “Dividends”; a December 2013 transfer of $15,000,000 for a

“Shareholder Distribution”; a March 2014 transfer for $3,000,000 for a “Shareholder

Distribution”; and another March 2014 transfer for $12,000,000, again for a “Shareholder

Distribution.” See Gov’t’s Ex. 25-1, Dkt. No. 118-9 at 2. Edelman chalks this up to an accounting

error. Id. at 23:21–23 (“. . . they messed around with the bank accounts and continued to send

money out to Sunage . . .”). Whatever the reason, the record gives no indication that he attempted

to correct this nearly $33 million accounting error.

Collett testified that Edelman also continued to direct where Mina/Red Star’s distributions

would be sent following the creation of the Galactea Trust. In 2013, Bank Julius Baer—the bank

housing Edelman’s Sunage Foundation account—was acquired by the American bank Merrill

Lynch. See Collett Dep. (Feb. 3, 2025), Dkt. No. 118-26 at 144–45. A representative from Bank

Julius Baer informed Edelman and Collett that this had “changed the whole philosophy” of the

bank, and that these “changes could have consequences in terms of disclosure.” Id. Collett

testified that this representative advised Edelman to move his money to Mirabaud Bank in Dubai,

where the representative would be joining, and that Edelman did so. Id.; see also Collett Dep.

(Feb. 4, 2025), Dkt. No. 118-27 at 104–05. Evidence in the record shows that, starting in 2014,

Mina/Red Star’s dividends stopped going to the Sunage Foundation account at Bank Julius Baer

and were instead sent to an account at Mirabaud Bank in the name of Rosbelt International. See

Gov’t’s Ex. 25-1, Dkt. No. 118-9. The record shows that, from February 2014 to September 2016,

approximately $60,825,306 in “Dividends” went to the Rosbelt International account at Mirabaud

Bank. Id. Edelman does not dispute the accuracy of this evidence. Evid. Hr’g Tr. at 7:18–8:6.

Starting in 2016, Mina/Red Star’s distributions stopped going to the Rosbelt account at

Mirabaud Bank and instead began flowing to another Rosbelt account at Banque J. Safra Sarasin

(“Safra Sarasin”) in Luxembourg. See Gov’t’s Ex. 25-1, Dkt. No. 118-9. Collett testified that

Edelman made the decision to close the Mirabaud Bank account and move the funds to the Safra

Sarasin account because one of Edelman’s agents had “negotiated arrangements” with Safra

Sarasin. Collett Dep. (Feb. 5, 2025), Dkt. No. 118-28 at 79–80. An email exchange between

Edelman and Collett in late 2015 corroborates Collett’s testimony regarding Edelman’s

relationship to the Galactea Trust and the decision to leave Mirabaud Bank in favor of Safra

Sarasin. See Gov’t’s Ex. 11-5, Dkt. No. 118-2. The exchange opens with an email from the

aforementioned representative of Mirabaud Bank to Edelman, Collett, and Leonard O’Brien (the

trustee of the Galactea Trust) in which the representative expresses concern over their failure to

meet their investment obligations, writing:

It’s this time of the year that the management looks at the accounts to see if they

are in line with the strategic objectives of the bank. As you may recall, earlier this

year I sent numerous emails noting that the account has not fulfilled the fund

investment objective agreed with the principal and mandated by Yves Mirabaud in

summer 2014 as a condition for account acceptance. Effectively, all my requests

to top up the fund positions have been ignored for the last 12 months and we are

now USD10.5mn short of the agreed fund investment level. Not only are we not in

line with the original agreement by a large margin (only 2.5m invested so far), but

you are also sitting on cash and missing out on returns.

I kindly request you to treat this email with the utmost urgency and revert to me by

Friday, Nov 13th, with regards to fulfilling the investment criteria.

Id. at 1. Collett then emails Edelman directly—removing O’Brien, the trustee, from the email

chain—to ask for a catch-up call, explaining that “we have some big cash calls coming up” before

adding: “I have been watching the RS position quite closely with particular regard to the loan and

possible shareholder distributions going forward. Will elaborate more when we speak. Meanwhile

we have 30m in total reserves right now.” Id. Edelman responds by listing a variety of investments

he was considering before directing Collett to “open today or next week asap the new accounts

and we just leave mirabaud.” Id. Collett ends the conversation by agreeing about Mirabaud—

explaining that “they are getting too pushy”—before reemphasizing that he was “quietly seeing

what we can possibly get out of RS in the short term.” Id. Collett testified that “RS” referred to

Red Star Enterprises. Collett Dep. Tr. (Feb. 5, 2025) at 77–78. Edelman does not dispute the

accuracy of the evidence in the record showing that, from 2016 to 2019, at least $55,023,399 in

dividends and distributions were directed to the Rosbelt International account at Safra Sarasin. 7

See Gov’t’s Ex. 25-1, Dkt. No. 118-9.

In 2020, Safra Sarasin froze the Rosbelt International account due to compliance issues. Collett testified that Safra

In addition to testifying that Edelman continued to direct Mina/Red Star’s operations and

its profit distributions following the creation of the Galactea Trust, Collett also gave substantial

testimony detailing how Edelman continued to use the income generated from Mina/Red Star to

invest in the same ventures in which he had invested from 2006 to 2012. The Government

organizes this testimony by isolating specific investments that Collett testified Edelman directed

after the creation of the Galactea Trust through a combination of four different entities—the

Sunage Foundation, Satellite Support Services Ltd. (“SSS”), Rosbelt International (“Rosbelt”),

and Bluestone International (“Bluestone”). 8

One such venture highlighted by the Government was the company Evanshire Finance Ltd.

(“Evanshire”), which held the assets of a Kenyan farming business. Collett Dep. (Feb. 4, 2025) at

102–03. During his plea hearing, Edelman admitted to investing his Mina/Red Star distributions

in Evanshire through late 2012. Plea Hr’g Tr. at 23:22–24:5. The Government has introduced

evidence showing that the Sunage Foundation, SSS, Rosbelt, and Bluestone invested over $15

million in Evanshire from 2013 to 2017. Gov’t’s Ex. 14-69, Dkt. No. 118-7 at 3–5. Collett testified

that Edelman directed him to make these payments through the various accounts, and that the

investments continued through the end of 2020. Collett Dep. (Feb. 4, 2025) at 104–05. He also

testified that the investments in Evanshire never returned any profit. Id. at 105.

Sarasin froze the account “in order to carry out a detailed analysis and examination of the various payments that were being made through the account[].” Collett Dep. (Feb. 5, 2025), Dkt. No. 118-28 at 128–29. Collett also testified that Edelman told him at the time that they “need[ed] more accounts to replace Safra.” Id. at 129. 8

The Court has already identified the Sunage Foundation and Rosbelt International—these were entities that received distributions from Mina/Red Star and were used to make a variety of investments. Collett testified that Satellite Support Services was an entity originally created in 2009 to hold investments in satellite technology but that became involved in a broader scope of investments at some point. See Collett Dep. Tr. (Feb. 3., 2025) at 152; Collett Dep. Tr. (Feb. 4, 2025) at 124. Bluestone International, on the other hand, was a company set up to operate various routine payments of the trust structure, including payments for Edelman’s various advisors such as Collett, and was mainly used as a treasury company for the Galactea Trust. See Collett Dep. Tr. (Feb. 3, 2025) at 21; Collett Dep. Tr. (Feb. 6, 2025) at 47–51.

The Government also highlights a company called Waterlow Management Limited

(“Waterlow”). See Gov’t’s Ex. 14-69, Dkt. No. 118-7 at 19. Collett testified that Edelman used

Waterlow to invest in shares of another company called Isotropic, which was a company “involved

in satellites and communication lines.” Collett Dep. (Feb. 4, 2025) at 106. According to Collett,

Edelman chose to invest in Isotropic “based on his association with the [f]ounder.” Id. at 107. In

2015, Edelman and a business associate discussed who should sit on Isotropic’s board: “Board seat

is you for sure,” wrote Edelman, adding, “I’m not really involved at all of course .. [sic]

Shareholder will be an entity etc and end up in an easy kyc 9 trust etc. Don’t want any usa

connection in this of course.” Gov’t’s Ex. 25-6, Dkt. No. 118-14. The record shows that by 2017

Waterlow had invested approximately $3,098,000 in Isotropic, with Collett estimating that an

additional $4 to $5 million was invested through 2019. Id. at 108. Collett testified that these

payments were “mainly made through Rosbelt International,” which was owned by the Galactea

Trust, and that he would communicate to the Galactea Trust’s trustee instructions from Edelman

regarding the details of these payments. Id. at 107–08. Collett was not aware of any profit

generated from Waterlow’s investments in Isotropic. Id. at 108.

According to Collett, Isotropic was not the only investment that Edelman directed based

on personal relationships. For instance, Collett identified Mountain Pass Limited as a company

that Edelman used to invest in a Chinese media company “based on his association with a Chinese

national investor.” Collett Dep. (Feb. 4, 2025) at 109. The Government has introduced evidence

showing that SSS and Rosbelt invested millions through Mountain Pass in 2015 and 2016. Gov’t’s

Ex. 14-69, Dkt. No. 118-7 at 21–23. And Collett further testified that Edelman continued to direct

approximately $6 million through Mountain Pass between 2017 and 2020. Collett Dep. Tr. (Feb.

As the Government explains, this likely refers to financial institutions’ “Know Your Customer” procedures, which involve various reporting requirements.

4, 2025) at 110. Collett also testified that Edelman used an entity called the Spectral Fund to front

the purchase of Palantir stock for two of his associates—first in 2009 from the Sunage Foundation,

and again in 2013 from the Galactea Trust. Collett Dep. Tr. (Feb. 4, 2025) at 134–38.

In addition to investments based on personal relationships, Collett testified that Edelman

directed him to use funds from the Galactea Trust to invest in a variety of ventures based on

Edelman’s personal preferences. For instance, Collett testified that Edelman created the company

Taruki Management Limited in 2008 or 2009 to invest in films and productions because Edelman

“wanted to make movies.” Collett Dep. Tr. (Feb. 4, 2025) at 115. The Government has introduced

evidence showing that SSS and Rosbelt invested over $15 million in Taruki between 2014 and

2017. Gov’t’s Ex. 14-69, Dkt. No. 118-7 at 29–39. Collett testified that he made these payments

“based on the approval of Mr. Edelman,” and that Edelman continued to direct investment in

Taruki through 2020. Collett Dep. Tr. (Feb. 4, 2025) at 116. Another company in this area of

Edelman’s interest was Atlantic Screen Holdings Ltd., which Collett explained was “involved in

the purchase and income from music and film royalties.” Id. at 116–17. The Government has

introduced evidence showing that, from 2015 to 2017, SSS, Rosbelt, and Bluestone invested over

$5 million in Atlantic Screen Holdings. Gov’t’s Ex. 14-69, Dkt. No. 118-7 at 41–47. Collett

testified that he was making these payments “based on the agreed amounts with Mr. Edelman.”

Collett Dep. Tr. (Feb. 4, 2025) at 117.

Collett identified additional companies that he testified Edelman used to direct investment

from the Galactea Trust into speculative ventures. For instance, Collett testified that Edelman

created the company Murney Overseas Limited in 2011 or 2012 to act as the holding company for

investments in land in Mexico. Collett Dep. Tr. (Feb. 4, 2025) at 110–11. The Government has

introduced evidence showing that SSS, Sunage, and Rosbelt invested more than $50 million in

Murney Overseas between 2013 and 2017. Gov’t’s Ex. 14-69, Dkt. No. 118-7 at 25–27. Collett

testified that he made these investments based on instructions from Edelman. Collett Dep. Tr.

(Feb. 4, 2025) at 111–12. He also testified that, up until the end of 2020, there had been no returns

on this investment. Id. at 111.

In addition to land speculation, Collett testified that Edelman also directed investment in

“oil exploration” in Africa and Canada and a “fuel logistics pipeline project” in Mexico through

the company Lang International Holdings (“Lang”). Collett Dep. (Feb. 4, 2025) at 112–15. The

Government has introduced evidence showing that, between 2013 and 2017, SSS invested over

$30 million in Lang International Holdings. Gov’t’s Ex. 14-69, Dkt. No. 118-7 at 7–9. Collett

testified that Edelman directed these investments and that the investments continued through 2020.

Collett Dep. (Feb. 4, 2025) at 112–15. He also testified that the investments did not return any

profit. Id. The record shows that, in 2016, Edelman told Collett that they “really do need in [sic]

place 23 or 24 million” in the Mexico project, adding that “NONE of the money can be spent

without us.” Gov’t’s Ex. 25-7, Dkt. No. 118-16 at 1–2. In 2018, a recording was made of a

meeting between Edelman and two of his business associates where they discussed the lack of

value in the North American oil exploration projects and the threat of a lawsuit brought by one of

their former associates. See Gov’t’s Mem. at 15 (citing Gov’t’s Ex. 25-8 (on file with chambers)).

At the meeting, Edelman informed his associates that he wanted to “close all these companies”

because they were “complete losses to this point and my name gets dragged into this and I funded

it hundred percent;” “suddenly I see my name on some legal document,” Edelman said, “I spend

all my, all of my time trying to make sure my name isn’t in anything, so any companies that we

have, anything whatsoever, any penny that we have in any company, lets close everything, stop

everything.” Gov’t’s Ex. 25-8 (on file with chambers). “I don’t have enough knowledge about

what’s going on and yet I’ve invested all the money,” Edelman complained. Id.

Beyond investing, Collett testified that Edelman also directed transfers from the Galactea

Trust to make personal purchases. Collett testified that in 2014, for example, he used SSS to

purchase a €711,000 yacht—Divinity—at the direction of Edelman. Collett Dep. (Feb. 4, 2025) at

139–43. Then he did it again the next year, using SSS to make the 2015 purchase of Princess

Juliet for €325,000 at Edelman’s direction. Id. An email chain from 2016 shows that Edelman

“instructed” one of his associates to purchase a $480,000 home in Mexico through Murney

Overseas Ltd. Gov’t’s Ex. 14-63, Dkt. No. 118-5. And Collett testified that in 2018, at Edelman’s

direction, he transferred €450,000 to an associate of Edelman’s so they could purchase a property

in Ibiza, Spain, where Edelman already owned a house. Collett Dep. Tr. (Feb. 5, 2025) at 10–11.

In sum, Collett, who served as Edelman’s accountant from 2004 to 2020, testified at length

about how Edelman continued to use the income generated from Mina/Red Star as his own after

that income purportedly belonged to the Galactea Trust. Whether it was investments identified

through Edelman’s connections or purchases for Edelman’s personal use, Collett testified that “the

directions had always come from Mr. Edelman.” Collett Dep. (Feb. 4, 2025) at 119. Collett also

testified that, while Edelman’s investments typically did not turn a profit, he could not remember

a time when Edelman wanted to make an investment or transfer money and the trustee of the

Galactea Trust said no. Id. at 124.

4. Edelman’s Tax Filings and Continued False Statements

In 2015, Edelman, who had yet to file any U.S. income tax returns on his income from

Mina/Red Star or any other source, decided to participate in the Offshore Volunteer Disclosure

Program (“OVDP”), an amnesty program for taxpayers who willfully fail to report foreign

financial assets and pay taxes due. Plea Hr’g Tr., Dkt. No. 79 at 24:23–25:5. So he sent a Dutch

individual—identified as Co-Conspirator 2—to the United States to meet with tax attorneys and

tax preparers on his behalf. Id. at 24:6–22. Following this meeting, Co-Conspirator 2, along with

Edelman’s longtime accountant Collett, told the tax attorneys and tax preparers the same false

story that Edelman had engineered in response to the 2010 congressional investigation: that Le

Dain was a founder and 50% owner of Mina/Red Star and that its assets, put in a trust, had always

been hers. Id. Over the next few months, Edelman’s advisors, including Collett and CoConspirator 2, provided a series of false and misleading documents to support the false story that

Mina/Red Star was and always had been owned by Le Dain. Id.

Edelman and his advisors ultimately prepared a client binder for his tax attorneys. See

Gov’t’s Ex. 4-5, Dkt. No. 118-1 (the “Client Binder”). This binder relayed a series of

misrepresentations regarding Edelman’s relationship with Mina/Red Star. As Collett put it, the

“Binder told the party line.” Collett Dep. (Feb. 6, 2025) at 17:14. For instance, it repeated the

misrepresentation that Le Dain was a founder and 50% owner of Mina/Red Star. Id. at 4. It also

stated that Edelman “had no interest in [the Sunage Foundation] trust at any time.” Id. To explain

Edelman’s involvement with Mina/Red Star, the client binder stated that Edelman had acted as a

nominee for Le Dain from the beginning. Id. at 21. Edelman and his advisors attached a sworn

affidavit from Le Dain to bolster these misrepresentations. Id. at 373. But as Edelman admitted

in his plea, these representations were false. He was the co-founder of Mina/Red Star and the

ultimate beneficial owner of the Sunage Foundation trust. Plea Hr’g Tr. at 19–22.

Based on the false information Edelman and his advisors provided to his tax attorneys and

tax preparers, Edelman was advised to report only “gifts” from Le Dain and “consulting fees” from

Mina/Red Star. Id. at 24:23–25:5. In March 2016, Edelman caused his attorneys to submit an

OVDP letter to the IRS on his behalf. Id. at 25:8–18. This letter was signed by Edelman, and in

it, Edelman swore that, from 2007 to 2014, he was a “consultant” for foreign entities in which he

never had an ownership interest and that he had earned less than $1 million in unreported income

in each of these years. Id. In October 2016, Edelman caused his attorneys to make a full

submission through the OVDP, which included Edelman’s individual income tax returns for years

2007 through 2014 and the previously mentioned March 2016 letter. Id. at 25–26. Edelman’s

income tax returns for years 2007 through 2014 did not report the income he received for his 50%

ownership of Mina/Red Star. 10 Id. Nor did his returns for years 2015 through 2020, which he

continued to file after his 2016 OVDP submission. Id. at 26–27. Edelman has pled guilty to

making false statements in these 2016 submissions to the IRS, and to tax evasion based on his

failure to report his Mina/Red Star income for tax years 2006 through 2012.

In 2018, the Department of Justice contacted Edelman regarding Mina/Red Star. Id. at 28.

Edelman continued to push the party line. Edelman admits that, in response to DOJ’s contact, he

caused his attorneys to make a presentation to a federal agent and prosecutors in which they

repeated the false story that Le Dain, not Edelman, had co-founded Mina/Red Star and that

Edelman received less than $1 million in income working as a consultant in each year from 2007

to 2014. Id. For this, Edelman has pled guilty to willfully making false statements to the Executive

Branch. Id. at 66.

In 2019, Edelman’s Mina/Red Star co-founder, Erkin Bek, began expressing concern over

the way the other half of the company had been organized. This concern came to a head in a

December 2019 email that Bek sent to Edelman, Collett, the trustee of the Galactea Trust (Leonard

O’Brien), and another of Edelman’s associates (Remco Polderman). Bek wrote that

After . . . receiving various conflicting messages in regard to your side of

ownership, mixed with various multiple misrepresentations made from your side[,]

Edelman also failed to submit a tax return for the year 2006, in which he earned approximately $6,486,356 in profit distributions from Mina/Red Star. Id.

. . . I conclude that you are playing with fire on compliance business operational

issues and not taking them seriously.

Collett Dep. (Feb. 4, 2025) at 132:4–10 (Collett reading from Bek’s email). Bek continued by

clarifying that

My partner and ultimate beneficial owner is Douglas Edelman. It is not Delphine

[Le Dain]. It is not Leonard [O’Brien, the trustee], or his sham trust companies.

Not Graham [Collett], not Remco [Polderman], nor anyone else. There’s one and

only partner and UBO—Douglas Edelman.

Id. at 132:14–23 (same). Bek concluded by saying that “Douglas need[ed] to formalize his position

regarding his own status if he want[ed] to keep giving directions to the company’s officers.” Id.

at 135:15–18.

Collett testified that Bek’s email triggered a “long and confusing time” during which

“Edelman consulted with various lawyers . . . and there was a long series of meetings and proposals

put forward” regarding his relationship with Mina/Red Star. Id. at 137. Collett explained that one

of the leading proposals was for Edelman to set up a new company—to be called Praedium—that

would acquire the half of Mina/Red Star that was purportedly owned by the Galactea Trust. Id. at

150. In April 2020, Edelman sent Bek letters memorializing his “100% interest as the ultimate

beneficial owner of Praedium,” which Edelman described as “a holding company for the 50%

interest that I personally have in Mina Group FZCO,” and certifying that the “authorization of any

necessary third parties, including Galactea Trust to transfer all of the business of [Mina/Red Star]

to Mina Group FZCO” would “immediately occur.” Collett Dep. (Feb. 6, 2025) at 14–16 (quoting

Edelman’s letters to Bek). At the same time as he was structuring proposals for the future,

however, Edelman continued his attempts to cover up the past. During his plea, Edelman admitted

that, in 2020, he directed one of his associates to change Gibraltar’s public registration database to

falsely reflect that Edelman was not the co-owner of Mina/Red Star. Plea Hr’g Tr. at 28:21–29:3.

Edelman’s plan to convert Mina/Red Star into Mina Group FZCO and to own half of Mina

Group FZCO through Praedium never materialized. Instead, in July 2020, Edelman proposed that

Bek purchase the entirety of Mina/Red Star. Gov’t’s Ex. 25-10, Dkt. No. 118-18. Bek made an

offer to Edelman and Collett in August 2020. Gov’t’s Ex. 25-11, Dkt. No. 118-19. The deal closed

in October 2020, with Edelman signing as the Seller Guarantor for the Seller Rosbelt International

Limited and Bek signing as the Purchaser Guarantor for the Purchaser, which was one of his own

companies. Gov’t’s Ex. 25-12, Dkt. No. 118-20. A week after the sale Edelman wrote to an

associate that “we sold mina .. good deal for us .. I am not really advertising it or telling people in

general but thought you’d like to know.” Gov’t’s Ex. 25-13, Dkt. No. 118-21.

Collett testified that Bek agreed to pay $76 million for the other half of Mina/Red Star,

with approximately $41 million of that paid to Rosbelt International in 2020. Collett Dep. (Feb.

6, 2025) at 31–33. Collett further testified that Edelman directed much of the $41 million received

in 2020 into his business ventures. Id. at 33. For instance, Collett testified that $10 million was

invested in the Mexican fuel logistics project. Id. at 33–35. Edelman did not report the income

from the sale of Mina/Red Star on his 2020 tax return. See Gov’t’s Ex. 25-9, Dkt. No. 118-17.

B. Procedural Background

On May 16, 2024, a grand jury in the District of Columbia handed down a thirty-count

indictment charging Edelman with conspiring to defraud the United States from 2008 to 2021,

making false statements to the Department of Justice in 2016, making false statements to the

Internal Revenue Service in 2018, evading taxes on his income from 2006 to 2020, and filing false

reports of his foreign bank accounts with the IRS from 2007 to 2012 and again from 2015 to 2020.

See Indictment, Dkt. No. 1. Edelman was arrested in July 2024. See Mem. Op., Dkt. No. 53 at 3.

On May 21, 2025, Edelman entered, and the Court accepted, his partial open plea in open

court. See Plea Hr’g Tr., Dkt. No. 79. In doing so, Edelman pled guilty to the first ten counts of

the indictment: conspiring to defraud the United States from 2008 through 2021 (Count One);

making false statements to the Internal Revenue Service in October 2016 (Count Two); making

false statements to the Department of Justice in March 2018 (Count Three); and willfully

attempting to evade and defeat income taxes for tax years 2006 through 2012 (Counts Four through

Ten). See id.; Indictment, Dkt. No. 1. Edelman maintains his innocence with respect to the

remaining twenty counts: willfully attempting to evade and defeat income taxes for tax years 2013

through 2020 (Counts Eleven through Eighteen); willfully filing false reports of foreign bank

accounts with the IRS for years 2007 through 2012 (Counts Nineteen through Twenty-Four); and

willfully filing false reports of foreign bank accounts with the IRS for years 2015 through 2020

(Counts Twenty-Five through Thirty).

Following Edelman’s open plea, the parties proposed proceeding to sentencing on the

counts to which Edelman had pled guilty while holding the remaining counts in abeyance. See

Plea Hr’g Tr., Dkt. No. 79 at 67. The Government indicated that it would decide whether to

proceed to trial on the remaining counts following the Court’s resolution of certain issues at

sentencing—specifically, issues related to the extent of the tax loss attributable to Edelman’s

offense. See Min. Order, May 16, 2025. The Court adopted this proposal.

The parties agree that, at sentencing, the counts that Edelman has pled guilty to will be

“grouped” and treated as one count. See Joint Notice, Dkt. No. 78 at 2 n. 1 (citing USSG §§ 3D1.1,

3D1.2). Edelman’s base offense level will be determined by the “total tax loss” attributable to his

offense. USSG § 2T1.1. In determining the total tax loss attributable to Edelman’s offense, the

Sentencing Guidelines direct the Court to consider the tax loss attributable to all of Edelman’s

“relevant conduct,” which is defined in this context as “all conduct violating the tax laws” so long

as that conduct is not “clearly unrelated” to his offense. Id. comment (n.2) (citing USSG

§1B1.3(a)(2)). The parties agree that “courts routinely accept as relevant conduct facts, proven by

a preponderance of the evidence, relating to uncharged counts.” Joint Notice, Dkt. No. 78 at 4.

For all intents and purposes, the total tax loss attributable to Edelman’s offense will be a

product of the loss stemming from Edelman’s failure to report profit distributions he received from

Mina/Red Star. It is undisputed that Edelman failed to report profit distributions from Mina/Red

Star in tax years 2006 through 2020. Based on this failure and associated deceptive conduct,

Edelman has pled guilty to willfully evading taxes on hundreds of millions of dollars that he

received as income from Mina/Red Star during tax years 2006 through 2012. Edelman does not

dispute including any tax loss from 2006 through 2012 in the calculation of the total tax loss

attributable to his offense.

Edelman maintains his innocence, however, with respect to the charges of tax evasion for

tax years 2013 through 2020. According to Edelman, he did not receive any profit distributions

from Mina/Red Star from 2013 through 2020 because he “contributed” his ownership interest in

the company to the Galactea Trust in 2013. See Def.’s Resp. at 3. Edelman therefore argues that

the Court should only consider the tax loss stemming from tax years 2006 through 2012 in

calculating the total tax loss attributable to his offense. The Government disagrees. According to

the Government, the Court should include any tax loss stemming from tax years 2013 through

2020 in its calculation because the Galactea Trust was a sham trust that did not change Edelman’s

economic relationship to Mina/Red Star or its profit distributions. The Government, in other

words, argues that Edelman continued to receive and evade taxes on Mina/Red Star’s profit

distributions from 2013 through 2020, and that the Court should therefore calculate the total tax

loss attributable to Edelman’s offense by tallying the loss stemming from Edelman’s admitted

2006–2012 tax evasion and his charged 2013–2020 evasion. 11