United States of America v. Costaras

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF OHIO
United States of America,
Plaintiff,
-vs-
Bill C. Costaras,
Defendant.
Case No. 1:11-cv-00860-PAB
JUDGE PAMELA A. BARKER
MEMORANDUM OPINION & ORDER
Currently pending before the Court is the United States’ Objection (Doc. No. 48) to Magistrate
Judge Sheperd’s September 11, 2025 Report and Recommendation. 	Defendant Bill C. Costaras
(“Costaras”) did not file a response to the United States’ Objection. Also pending before the Court
is Costaras’ own Objection to the Report and Recommendation. (Doc. No. 49.) On September 30,
2025, the United States filed a Response to Costaras’ Objection. (Doc. No. 50.) Accordingly, the
parties’ Objections are ripe for review.
For the following reasons, the United States’ Objection is sustained in part, and Costaras’
Objection is overruled. The Report and Recommendation is adopted in part and rejected in part. The
Garnishment Order (as defined below) is hereby modified as follows:
1. 	Paragraph 1 of the Garnishment Order shall be modified to require Southwest
Orofacial Group to pay the United States thirty-nine percent (39%) of Costaras’ monthly gross
earnings, plus an additional $7,000.00 per month.
2. 	Paragraph 3 of the Garnishment Order is modified to require Costaras to remit his
estimated tax payments monthly using the current version of the IRS “Percentage Method Tables for
Manual Payroll Systems with Forms W-4 from 2020 or Later” for Monthly Payroll Periods for Single
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Taxpayers (published in IRS Publication 15-T (2023), Federal Income Tax Withholding Methods);
https://www.irs.gov/publications/p15t).
3. 	All 	other 	terms 	of 	the 	Garnishment 	Order 	not 	otherwise 	modified 	by 	this
Memorandum Opinion and Order shall remain in effect. 	Where there is conflict, the terms of this
Memorandum Opinion and Order shall control.
I. 	Background
On April 29, 2011, the United States filed a Complaint against Costaras for assessed federal
income taxes for tax years 1994, 1995, 1998, 2000, 2001, 2002, 2003, 2004, 2005, 2007, 2008, and
2009, and for assessed Trust Fund Recovery Penalty taxes for quarterly tax periods ending December
31, 1998, March 31, 1999, March 31, 2000, September 30, 2000, December 31, 2000, March 31,
2001, June 30, 2001, September 30, 2001, December 31, 2001, June 30, 2002, September 30, 2002,
December 31, 2002, June 30, 2003, September 30, 2003, December 31, 2003, March 30, 2004, June
30, 2004, June 30, 2005, December 31, 2005, March 30, 2006, and June 30, 2006. 	(Doc. No. 1,
PageID #1–2.) 	On December 5, 2011, the Court entered an Agreed Final Judgment. (Doc. No. 6.)
Therein, the Court entered judgment in favor of the United States and against Costaras in the amount
of $983,546.55, plus interest. (Id. at PageID #34.)
Years later, on July 6, 2023, the United States filed an Application for Writ of Continuing
Garnishment, which Costaras opposed on September 28, 2023. 	(Doc. No. 9, 16.) 	Ultimately the
parties resolved their dispute regarding that garnishment, and the Court entered a Consent
Garnishment Distribution Order (the “Garnishment Order”). 	(Doc. No. 24.) 	Therein, the Court
ordered, in relevant part,
1. 	The United States and Costaras will consent to a Distribution Order in
which Southwest Orofacial Group pays the United States thirty-nine percent (39%)
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of Bill Costaras’s monthly gross earnings per month . . . until the judgment debt,
including 	all 	interest 	and 	penalties, 	is 	fully 	satisfied, 	becomes 	legally
unenforceable, Southwest Orofacial Group no longer owes any payments to
Costaras, or until further order of the Court. . . .;
* * *
3. 	Costaras shall pay to the IRS an amount calculated using the current version
of the IRS “Percentage Method Tables for Manual Payroll Systems with Forms W-
4 form 2020 or Later” for Monthly Payroll Periods for Single Taxpayers (published
in IRS Publication 15-T (2023), Federal Income Tax Withholding Methods);
https://www.irs.gov/publications/p15t), as estimated payments towards his current
federal income taxes;
* * *
6. 	To the extent circumstances change, the United States or Costaras may seek
a modification of the Distribution Order;
7. If Costaras fails to pay the estimated payments specified in Paragraph 3, above,
to the IRS, then Costaras will consent to an increased garnishment payment[.]
(Id. at PageID #112–14.)
On May 9, 2025, the United States filed a Motion to Modify Consent Garnishment
Distribution Order (the “Motion to Modify”) requesting that the Court “modify the Consent
Distribution Order to adjust the amount Southwest Orofacial pays to the United States from the
current distribution rate of 39 percent of Bill (a/k/a) Basilios Costaras’ (‘Costaras’) monthly gross
earnings to 44 percent, plus $10,000.” 	(Doc. No. 39, PageID #216.) 	The United States filed the
Motion to Modify “because Costaras has failed to properly make estimated payments toward his
current federal income taxes (thus the additional $10,000) and because his income has significantly
increased since the United States agreed to the 39 percent monthly payment (thus the increase from
39 to 44 percent).” (Id.) 	On May 28, 2025, the Court referred the Motion to Modify to Magistrate
Judge Shepard for a report and recommended decision. (Doc. No. 40.)
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On July 15, 2025, Costaras opposed the Motion to Modify, to which the United States replied
on July 21, 2025 (Doc. Nos. 43, 44.) Both parties also filed supplements to their briefing. (Doc. Nos.
45, 46.) 	In Costaras’ supplement, he did not generally oppose a modification of the Garnishment
Order and offered the following “proposed solution:”
1. The garnishment be continued at 30% of Gross earnings[.]
2. The amount of $7,000 per month shall be withheld by [his employer] and
submitted to the Internal Revenue Service via Forms 1040-ES to Dr. Costaras’
then current income tax year.
3. As [his employer] has been providing the documentation to support the
garnishment payments, so too will it provide the documentation for the mailing of
the $7,000 estimated payments.
4. We schedule a status conference for November or December to update on the
success of the proposed resolution and the application of payments collected so
far.
5. That this be subject to modification.
(Doc. No. 46, PageID #386.)
On September 11, 2025, the Magistrate Judge issued his Report and Recommendation.
Therein, the Magistrate Judge made two recommendations. First, the Magistrate Judge recommended
that the garnishment of Costaras’ gross monthly wages not be lessened from 39% to 30%. (Doc. No.
47, PageID #395–98.) Second, the Magistrate Judge recommended that “Paragraph 1 of the Consent
Garnishment Distribution Order should be modified to continue the garnishment rate at 39% plus an
additional $4,000 per month penalty” (id. at PageID #399) and that “Paragraph 3 be amended to
require Dr. Costaras to remit his estimated tax payments monthly using the current version of the IRS
“Percentage Method Tables for Manual Payroll Systems with Forms W-4 from 2020 of Later” for
Monthly Payroll Periods for Single Taxpayers (published in IRS Publication 15-T (2023), Federal
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Income Tax Withholding Methods); https://www.irs.gov/publications/p15t).” (Id. at PageID #398–
400.)
On 	September 	22, 	2025, 	the 	United 	States 	filed 	an 	Objection 	to 	the 	Report 	and
Recommendation. 	(Doc. No. 48.) 	Costaras did not respond to the United States’ Objection. 	On
September 30, 2025, Costaras filed his own Objection to the Report and Recommendation. 	(Doc.
No. 49.) The United States filed a Response on September 30, 2025. (Doc. No. 50.) Accordingly,
the parties’ Objections are ripe for review.
II. 	Standard of Review
Under 28 U.S.C. § 636(b)(1), “[a] judge of the court shall make a de novo determination of
those portions of the report or specified proposed findings or recommendations to which objection is
made.” 28 U.S.C. § 636(b)(1)(C); see Powell v. United States, 37 F.3d 1499 (Table), 1994 U.S. App.
LEXIS 27813, at *4 (6th Cir. Sept. 30, 1994) (“Any report and recommendation by a magistrate judge
that is dispositive of a claim or defense of a party shall be subject to de novo review by the district
court in light of specific objections filed by any party.”) (citations omitted); Orr v. Kelly, No. 1:14-
cv-2302, 2015 U.S. Dist. LEXIS 121347, at *4 (N.D. Ohio Sept. 11, 2015) (citing Powell, 1994 U.S.
App. LEXIS 27813at *4); see also Fed. R. Civ. P. 72(b)(3). “A judge of the court may accept, reject,
or modify, in whole or in part, the findings or recommendations made by the magistrate judge.” 28
U.S.C. §636(b)(1).
III. 	Analysis
The United States objected to the Magistrate Judge’s recommended increase of $4,000 in
monthly payments instead of the requested amount of $10,000. (Doc. No. 48, PageID #402.) Other
than this, the United States represents that “[t]he Report and Recommendation is otherwise
unobjectionable.” (Id.)
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In its Objection, the United States argues that it “showed that application of the estimated tax
formula imposed by the Consent Garnishment Distribution Order to Costaras’ gross earnings for the
month of June 2025 ($32,017) yielded a required estimated tax payment of $8,231.” (Id. at PageID
#403.) 	It 	asserts 	that 	“[t]he 	Report 	and 	Recommendation’s 	fundamental 	flaw 	is 	that 	it
mischaracterizes the imposition of an increased monthly garnishment amount as a ‘penalty’ for the
judgment debtor’s bad behavior (the failure to pay estimated current income taxes),” but that the
increase contemplated by the Consent Garnishment Distribution Order is not a penalty for Costaras’
bad behavior but rather a recognition that he is a high-earner and has more funds available to pay the
judgment debt when he doesn’t pay his estimated taxes.” (Id. at PageID #404.) It further asserts that
the Report and Recommendation “will simply allow the judgment debtor an extra $6,000 per month
. . . until the United States gathers evidence that, indeed, he continues not to pay his estimated taxes.”
(Id.) The United States further argues that “Costaras has made no voluntary payments towards his
judgment debt, and it is only through forcible collection – the garnishment – that the United States
has been able to compel any payment from this high-earning judgment debtor” and that “[a]llowing
Costaras to keep more of his earnings by flouting his obligation to pay estimated current income taxes
is not warranted.” (Id. at PageID #405.)
Costaras did not file a Response to the United States’ objection and instead filed his own
Objection. 	Costaras’ only objection to the Report and Recommendation is that “the $4,000
‘additional’ amount should be put to current taxes.” (Doc. No. 49, PageID #409.) Costaras asserts
that “[i]n the R&R, the assumed amount that Dr. Costaras grossed per month was an average of
$39,548 based on Defendant’s computation from records provided by the United States. It turns out
that this amount is too high.” (Id. at PageID #408.) He claims that he “was temporarily picking up
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more hours and patients as Southwest Orolfacial Group (SWOF) opened a new office and had a doctor
leave” and that “a new doctor has been hired and SWOF is recruiting another doctor.” (Id.) Thus,
according to Costaras, “[t]he additional $4,000 should, plus an amount of $3,000 for a total of $6,000
(sic) additional funds go towards current taxes.” (Id. at PageID #408.)
The United States responds that “[t]he garnishment cannot be a means of collecting Costaras’
current income taxes, as he requests, or, for that matter, any other taxes he may owe” because “[t]he
Department of Justice does not have the authority to collect the debtor’s current income taxes, and
those tax periods are not before this Court.” (Doc. No. 50, Page #414.) It argues that “[a]ny additional
amount beyond the 39% of his gross earnings subject to garnishment should be – and can only be –
applied to the judgment debt.” (Id. at PageID #414–15.)
Based on the parties’ respective Objections, the Court’s review at this stage is narrowed to
two issues: (1) whether it should adopt the Magistrate Judge’s recommended increase of $4,000 per
month, and (2) whether to modify the Magistrate Judge’s recommendation and require the increase
to be paid toward current taxes, as opposed to the outstanding judgment amount.
A. 	The Court sustains, in part, the United States’ Objection
The Federal Debt Collection Procedure Act, 28 U.S.C. § 3001, et seq., “provides the exclusive
civil procedure for the United States . . . to recover a judgment on debt.” 28 U.S.C. § 3001(a)(1).
The Court may “make an order denying, limiting, conditioning, regulating, extending, or modifying
the use of any enforcement procedure under this chapter.” 28 U.S.C. § 3013. District courts have
“broad discretion to temporarily suspend or modify a writ of garnishment under § 3013.” 	United
States v. Robinson, No. 19-CV-50046, 2019 U.S. Dist. LEXIS 22414, at *4 (E.D. Mich. Feb. 12,
2019). 	“And many courts have found that the discretion afforded by § 3013 permits the court to
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consider financial hardship to the defendant and limit the government’s enforcement remedies
accordingly.” United States v. Freeman, No. 3:99-CR-101-CRS, 2024 U.S. Dist. LEXIS 175601, at
*6 (W.D. Ky. Sept. 27, 2024) (citing cases).
1. 	The parties’ arguments before the Magistrate Judge
To resolve the United States’ Objection, the Court finds it useful to summarize the parties’
arguments that were made to the Magistrate Judge concerning Costaras’ current financial situation.
In the Motion to Modify, the United States asserts that “[b]ased on a salary of $458,628,
Costaras likely owes approximately $120,000 in federal income taxes for each year.” (Doc. No. 39-
1, PageID #222.) The United States came to the estimation through counsel’s “rough estimate using
a tax withholding estimator on the IRS website.” 	(Id.) 	Thus, the United States’ request for the
$10,000 increase is based on “the amount [Costaras] should have been paying in estimated tax
payments ($120,000 / 12 months).” (Id. at PageID #223.) The United States points out that, “[f]or
the past 6 months, Costaras has received an average of $24,124 per month – after the garnishment
payment to the United States.” (Id. at PageID #224.) The United States also points out that “[t]he
reasonable expenses for one person, living in Maricopa County, Arizona total $3,956 per month.”
(Id. at PageID #223.)
Costaras responds that, “at the end of a typical month, after the sizeable garnishment, and his
living expenses, Dr. Costaras is operating at a deficit.” (Doc. No. 43, PageID #261.) To support this
assertion, Costaras attached a spreadsheet itemizing his alleged expenses. (Doc. No. 43-4, PageID
#303.) As the United States points out in its Reply, Costaras’ proposed solution would be “to require
the garnishee to pay $9,000 per month to the IRS as estimated taxes on Costaras’ behalf.” (Doc. No.
44, PageID #308; see also Doc. No. 43 PageID #267 (proposing that “[t]he amount of $9,000 per
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month shall be withheld by SWOF and submitted to the Internal Revenue Service via Forms 1040-
ES to Dr. Costaras’ then current income tax year”).)
After the Magistrate Judge held a status conference, the parties submitted additional briefing.
The United States submitted “the most recent monthly statements in its possession for the debtor’s
credit cards and 2024 expenditure summaries for those cards.” (Doc. No. 45, PageID #317.) 	The
United States argued that Costaras’ list of expenses submitted with his Opposition “grossly
exaggerates the debtor’s monthly credit card expenses as ranging between $279 and $3,533” because
“none of the cards have minimum payments in the thousands of dollars.” (Id. at PageID #318.)
Instead, “all but one of the accounts have minimum payments of less than $100 and the Discover
Card’s minimum payment is only $147.” (Id.) The United States also argues that Costaras “double
counts expenses” and “the expense summaries show the debtor frequently travels and dines out.” (Id.
at PageID #318–19.)
Costaras responded that after reviewing the credit card statements, after monthly payments
on his credit cards and garnishments, Costaras would be left with $3,592 per month. (Doc. No. 46,
PageID #385.) 	Costaras based this amount on an assumed average monthly income of $39,548.
(Doc. No. 46-1, PageID #389.) He supported these figures with an updated spreadsheet listing his
alleged expenses. (Id.) After the Magistrate Judge issued the Report and Recommendation, Costaras
now claims that his own calculation was inaccurate and that his average monthly gross income from
April 2025 through September 2025 was $31,884. (Doc. No. 49, PageID #408.)
2. 	Costaras is living well beyond his means
Upon reviewing the evidence submitted by the parties, the Court finds Costaras’ position
regarding his financial situation disingenuous. Despite his substantial debts, Costaras continues to
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live well above his means. For example, he spent $17,573.51 on automotive payments (notably one
purchase is from “Porsche North Scottsdale”) (Doc. No. 45-1, PageID #324; Doc. No. 45-3, PageID
#354; Doc. No. 45-5, PageID #378), and he spent thousands of dollars on what appear to be car parts
for luxury vehicles.1 (Doc. No. 45-2, PageID #339; Doc. No. 45-5, PageID #376–77.) Costaras also
appears to own a boat and spent nearly two-thousand dollars at several marinas. 	(Doc. No. 45-1,
PageID #326–27; Doc. No. 45-5, PageID #377.)
Likewise, Costaras frequents expensive restaurants racking up large bills as high as $267.31,
$282.60, $333.00, and even $540.81. (See, e.g., Doc. No. 45-1, PageID #325; Doc. No. 45-2, PageID
#339.) 	Costaras’s expensive tastes do not end there. 	For example, he spent $411.65 at Simones
Beverage, a liquor store, on December 22, 2024.2 	(Doc. No. 45-2, PageID #337.) 	He also spent
$644.46 on December 27, 2024 at Omaha Steaks in Rocky River, Ohio. 	(Doc. No. 45-5, PageID
#376.) 	These expenses are just a sampling of the unnecessary expenses Costaras incurred during
2024.
In addition to his credit card spending, Costaras could be saving money in other areas. The
Court finds it hard to believe that the cheapest place he could rent in Phoenix costs him $3,427.05
per month. (Doc. No. 46-1, PageID #389.)3 And the Court finds it hard to believe that the cheapest
phone/plan would cost him $573.00 per month. (Id.)
3. 	Costaras claimed expenses are exaggerated
The Court also finds that Costaras’s claimed expenses are exaggerated. 	After his claimed
1 There are several purchases from “Rimmer Bros,” which is a company that sells car parts for luxury car brands. See
https://rimmerbros.com/.
2 See http://www.simonesbeverage.com/.
3 As of January 20, 2026, there are listings on Apartments.com for two bedrooms, one-bathroom apartments for $649.00
per month in the Phoenix area.
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expenses and the 39% garnishment, Costaras claims he will only have $3,592.76 in income
remaining. (Doc. No. 46-1, PageID #389.) To reach this amount, Costaras claims that he is spending
$4,728.00 on credit cards per month. (Id.) Upon review of the credit card statements submitted by
the United States, the minimum payments on those cards total only $634.99 per month. Costaras has
not submitted conflicting statements showing that (somehow) his total minimum monthly payments
increased to $4,728.00 in 2025. Assuming, for the sake of argument, that his total minimum payments
per month on his credit cards total only $1,000, by his own accounting, Costaras would be left with
$7,320.67 per month. Moreover, as the United States correctly points out, Costaras’ own accounting
double counts expenses, like his phone bill for example.
4. 	The Court imposes a $7,000 per month increase on the Garnishment
Order
Put simply, the Court is not sympathetic to Costaras’s situation. 	Costaras avoided paying
taxes for two decades, and his lifestyle does not reflect a person who owes over $600,000 on a
judgment for unpaid taxes. His spending habits do not reflect “a terrible ‘businessman’” or a “poor
financial manager” as he self-describes himself. (Doc. No. 43, PageID #256.) Instead, his spending
habits reflect someone who holds himself above the law. If Costaras was serious about repaying his
debts, his lifestyle would have changed. He would be living in a modest apartment, would be driving
a modest car, would be eating modest food, and would be cutting costs wherever he could. Instead,
he decided to live lavishly and ignore the Garnishment Order’s (and more importantly the law’s)
simple requirement that he pay his current taxes.
Based on Costaras’ lavish spending and exaggerated expenses, the Court finds that a $4,000
per month increase is simply insufficient. 	The Court acknowledges and understands why the
Magistrate Judge imposed a $4,000 penalty. The Magistrate Judge focused on the purpose of Section
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6 of the Garnishment Order, namely the failure to pay current taxes. 	The Court agrees with the
Magistrate Judge’s conclusion that a penalty is necessary here but based on the Court’s review of the
evidence in the record, the Court finds that Costaras has more than enough income available to pay
the Judgment, and his ongoing obligations.
As explained above, even if Costaras largely does not change his spending, by his own
accounting, he would be left with over $7,000 per month. 	There is room for him to decrease his
monthly expenses by finding a cheaper apartment and finding a work situation that does not require
travel between Cleveland and Phoenix. 	Further, by decreasing his extravagant expenses, he could
focus on paying down his credit card bills, which, of course, would leave him with more disposable
income per month. The Court therefore finds that a $7,000 per month increase on the Garnishment
Order is appropriate. 	Costaras is advised that the Court will entertain a request by the United States
for an increase in that amount should he continue to live a lavish lifestyle and should he fail to pay
his current taxes timely.
B. 	The Court overrules Costaras’ Objection
The Court will not entertain Costaras’s request that the increased amount be applied to current
taxes. Costaras offers no authority for his request. Indeed, as the United States correctly points out,
the garnishment statute would not permit such a request. “A court may issue a writ of garnishment
against property (including nonexempt disposable earnings) in which the debtor has a substantial
nonexempt interest and which is in the possession, custody, or control of a person other than the
debtor, in order to satisfy the judgment against the debtor.” 28 U.S.C. § 3205(a) (emphasis added).
There is no “judgment” against Costaras for his current taxes that a garnishment order would
“satisfy.” The Court, therefore, overrules Costaras’ Objection.
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V. 	Conclusion
In summary, the Court sustains the United States Objection, in part, and overrules Costaras’
Objection. The Garnishment Order is hereby modified as follows:
1. 	Paragraph 1 of the Garnishment Order shall be modified to require Southwest
Orofacial Group to pay the United States thirty-nine percent (39%) of Costaras’ monthly gross
earnings, plus an additional $7,000.00 per month.
2. 	Paragraph 3 of the Garnishment Order is modified to require Costaras to remit his
estimated tax payments monthly using the current version of the IRS “Percentage Method Tables for
Manual Payroll Systems with Forms W-4 from 2020 or Later” for Monthly Payroll Periods for Single
Taxpayers (published in IRS Publication 15-T (2023), Federal Income Tax Withholding Methods);
https://www.irs.gov/publications/p15t.
3. 	All 	other 	terms 	of 	the 	Garnishment 	Order 	not 	otherwise 	modified 	by 	this
Memorandum Opinion and Order shall remain in effect. 	Where there is conflict, the terms of this
Memorandum Opinion and Order shall control.
The Clerk is instructed to mail a copy of this Memorandum Opinion and Order to Southwest
Orofacial Group at 10214 N. Tatum Blvd, Suite A1100, Phoenix, AZ 85028.
IT IS SO ORDERED.
s/Pamela A. Barker
PAMELA A. BARKER
Date: January 22, 2026 	U. S. DISTRICT JUDGE
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