United States v. Ulibarri.
No. 25-1281. 5/27/2026. D.Colo. Judge Kelly. Tax Evasion—US Sentencing Guidelines—Sophisticated Means Enhancement—Common Scheme—Procedural Reasonableness—Substantive Reasonableness.
May 27, 2026
Ulibarri is a licensed dentist in Colorado who has owned and operated Ulibarri Family Dentistry since 2014. Shortly after starting his dental practice, Ulibarri attended a seminar for business owners that taught a strategy for eliminating most federal income taxes on their business income. But the strategy in fact was an abusive-trust tax scheme. From 2016 through 2023, Ulibarri assigned a 90% stake in his dental practice to a business trust, which then distributed its income to a family trust, which then distributed its income to a charitable trust. Ulibarri paid his family’s expenses with funds held in the trusts’ bank accounts and improperly claimed these personal expenses as tax deductions. On the trusts’ tax returns, each trust reported distributions and deductions matching or exceeding its income, and any remaining income was “donated” to a tax-exempt private family foundation. The foundation then “loaned” its funds back to the sham trusts. Ulibarri thus retained full control and beneficial use of his dental practice’s income on a tax-free basis. He continued this tax scheme notwithstanding repeated warnings from lawyers, bookkeepers, and third-party lenders that his use of the trusts was unlawful, and despite receiving a target letter in September 2023 from the Department of Justice indicating that he was under criminal investigation for the tax scheme.
In August 2024, Ulibarri was indicted with six counts of tax evasion under 26 USC § 7201—one count for each tax year from 2017 through 2022. He pleaded guilty to all counts in February 2025. Yet as late as May 2025, he continued to funnel his income from Ulibarri Family Dentistry through the sham trusts. Through his scheme, from 2016 through 2023 Ulibarri avoided paying more than $1.6 million in taxes owed on $5.3 million in earnings from Ulibarri Family Dentistry. At Ulibarri’s sentencing hearing, the district court determined that the total loss amount was $1,616,087. This amount included $162,053 from uncharged conduct for tax year 2023, a year for which he filed no tax return nor paid federal income taxes. This resulted in a base offense level of 22. The district court then adjusted for Ulibarri’s sophisticated means, acceptance of responsibility, and zero-point offender status, for a total offense level of 20. The advisory guidelines range was 33 to 41 months of imprisonment. The district court sentenced Ulibarri to 41 months of imprisonment, three months of supervised release, $1,616,087 in restitution, and a fine of $150,000.
On appeal, Ulibarri argued that his sentence was procedurally unreasonable. He asserted that the district court abused its discretion by misapplying the US Sentencing Guidelines (USSG) while computing his offense level, maintaining that the court improperly included, and then miscalculated, the 2023 tax loss in its valuation of the total loss amount. He also argued that the court improperly assessed a two-level “sophisticated means” enhancement. The USSG requires a sentencing court to aggregate the tax loss from the offenses of conviction and acts or omissions that were part of the same course of conduct or common scheme as the offenses of conviction. And all conduct that violated the tax laws should be considered as part of the pattern of conduct unless the evidence shows that the conduct is clearly unrelated. Here, the district court found with record support that Ulibarri used the same exact method to disguise his business income in 2023 as he did between 2016 through 2022. This supports the conclusion that Ulibarri’s 2023 tax year conduct, while uncharged, was simply a continuation of his offenses of conviction. Accordingly, the district court did not clearly err in aggregating the loss amounts for tax years 2016 through 2023. Further, the district court’s calculation of the 2023 tax loss was based on reasonable estimates in light of the facts available and was thus not clearly erroneous. And there is ample record support for concluding that Ulibarri’s offense involved sophisticated means. The sentence was thus procedurally reasonable.
Ulibarri further contended that his sentence was substantively unreasonable because the district court abused its discretion in misapplying the 18 USC § 3553(a) factors to impose an unduly long sentence. However, the district court thoroughly weighed each of the § 3553(a) factors to impose a sentence that is within the USSG range and presumptively reasonable. While the district court had discretion to apply a downward variance based on Ulibarri’s community standing and lack of criminal history, it did not abuse its discretion by declining to do so. The sentence imposed was not substantively unreasonable.
The sentence was affirmed.