Category

Tax Evasion

Illinois Home Builder Gets 30 Months in Jail for Failing to Pay $1.27 Million in Federal Income Taxes

By | Tax Evasion

On Nov. 24, 2014, in Chicago, Illinois, Dennis Weiss, of South Elgin and formerly of St. Charles, was sentenced to 30 months in prison and ordered to pay $296,643 in restitution to the IRS. Weiss previously pleaded guilty to filing a false federal income tax return and making false statements in a bankruptcy petition. According to court documents, Weiss owned Custom Homes by D. R. Weiss, Inc., and Reliable Home Solutions, Inc. Weiss filed false individual federal income tax returns for 2005 through 2009, and he failed to file corporate tax returns for both of his companies. Between 2005 and 2009, Weiss paid personal expenses from Custom’s business bank account, accepted cash payments from Custom and Reliable customers, and failed to record the receipt of these funds on the books and records of the corporations, resulting in a total federal tax loss of $1,271,280. In Weiss’ personal bankruptcy petition, he intentionally concealed the existence of a company he owned and interests in three family held entities. In addition to criminal penalties, Weiss remains responsible for all taxes and interest due, as well as civil penalties of up to 75 percent of the tax owed.

Ohio Restaurant Owner Sentenced for Tax Evasion

By | Tax Evasion

On Nov.7, 2014, in Cincinnati, Ohio, Joel Field, of Marion, was sentenced to 12 months and a day in prison, four months in a halfway house, four months home confinement, three years supervised release and ordered to pay $353,778 in restitution and fines. In May 2014, Field pleaded guilty to evading payment of his federal income taxes for the years 1997 through 2001. According to court documents, when the IRS attempted to collect the outstanding amount of taxes owed by Field, which was in excess of $140,000, Field misled the IRS by failing to report assets and income and by submitting false information regarding foreclosure proceedings. Furthermore, Field transferred assets in an effort to conceal those assets from the IRS. Field also filed false federal income tax returns for the years 2006 through 2009 where he failed to report over $620,000 in income that he earned through his companies.

Michigan Man Imprisoned for Federal Tax Evasion

By | Tax Evasion

On Oct. 30, 2014, in Detroit, Michigan, Bradley T. McKouen, of Clarkston, was sentenced to 18 months in prison, two years supervised release and ordered to pay $319,000 in restitution. McKouen pleaded guilty to tax evasion in April 2014. According to court documents, during the 2008 tax year, McKouen was the president and sole member of Delta Staffing, LLC, an employee leasing company located in Clarkston, Michigan. Delta was a Schedule C company, meaning its profits were to be reported on Schedule C as a part of McKouen’s personal federal income tax return. In 2008, Delta’s gross receipts were approximately $5.7 million. However, McKouen reported $0 gross receipts on his return. He also reported $0 business income, $0 taxable income, and $0 income tax. In 2008, McKouen’s actual taxable income was approximately $299,000 and his tax due was approximately $110,000. Under the terms of his plea agreement, McKouen is also being held responsible for filing similar zero-income returns for the years 2004-2007. In all, he failed to report $15 million in gross income and evaded $319,000 in federal income taxes for the years 2004-2008.’’

Illinois Man Sentenced for Underreporting Income

By | Tax Evasion

On Nov. 5, 2014, in Chicago, Illinois, Paul West was sentenced to 37 months in prison and ordered to pay $582,934 in restitution. West pleaded guilty to two counts of filing false tax returns. According to court documents, West, aka Thomas Wilson and Tom Wilson, sold materials for recycling, including scrap cardboard. In 2007 and 2011, West under-reported his income from his recycling services and gambling, reporting that he owed little or no taxes. For six other years between 2004 and 2011, he failed to file any individual income tax returns, despite gross receipts and gambling income over all eight years totaling $3,190,741.

North Carolina Businessman Fails to Report More Than $1 Million in Income

By | Tax Crimes, Tax Evasion

On Oct. 27, 2014, in Raleigh, North Carolina, Jeffrey Wayne Scott was sentenced to 12 months and one day in prison for tax evasion. Scott previously pleaded guilty to one count of willfully attempting to evade his personal income tax for tax year 2007. According to court documents, Scott owned and operated Greenville Loop Seafood (GLS).  For tax years 2006 through 2010, Scott and his wife filed joint individual income tax returns. Scott reported that his taxable income for these five years ranged between $23,934 and $92,999, and paid only $91,800 in federal income taxes for this time period. However, during these five years, the Scotts spent far in excess of this reported taxable income on personal expenditures. Between 2006 and 2010, the Scotts paid for nearly all of their living expenses with checks from GLS. Scott also made a monthly transfer of $10,000 from the GLS business account into a personal brokerage account.  After the purchase of their home in June 2009, Scott stopped transferring funds to the brokerage account, but instead used funds from the GLS business account to pay the mortgage and related expenses. Scott failed to report in excess of $1,270,000 in taxable income for these five years and owed at least $412,844 in additional federal income taxes. Furthermore, despite being aware that he was under criminal investigation, in November 2012, Scott filed a false 2011 corporate income tax return claiming work on his personal residence, including painting and repair work by a plumber, and health bills related to his family dog as business expenses.

Former CFO Imprisoned for Mail Fraud and Tax Evasion

By | Tax Evasion, Tax Fraud

On Oct. 27, 2014, in Fort Myers, Florida, Shawn Fuentes was sentenced to 60 months in prison. Fuentes was also ordered to pay restitution to Naples Concrete and Masonry of $1,951,459, restitution to the IRS of $624,728 and a money judgment of $106,979. Fuentes pleaded guilty on July 17, 2014 to mail fraud and tax evasion. According to court documents, Fuentes was the Chief Financial Officer of N.C.M. of Collier County, Inc., doing business as Naples Concrete and Masonry, which was headquartered in Naples, Florida. On numerous occasions, between October 2008 and February 2010, Fuentes fraudulently wrote checks payable to American Express and to Bank of
America drawn on the bank accounts of N.C.M. and then sent them to satisfy her own credit card debt. As part of the scheme, the fraudulent checks appeared to be written for legitimate business expenses in the accounting system utilized by the company. As a result of the scheme, she obtained in excess of $500,000. Fuentes also filed a 2009 tax return reporting a taxable income of approximately $35,148, omitting the amount of money misappropriated or stolen from Naples Concrete and Masonry. The actual taxable income that she had received was $822,060; therefore, she failed to report taxable income in the amount of approximately $786,912.  For the calendar year 2009, Fuentes paid $2,671 in taxes rather than $262,081.

Idaho Nightclub Owner Sentenced for Tax Evasion

By | Tax Evasion

On Oct. 22, 2014, in Boise, Idaho, Herminio Harro Sandoval, of Caldwell, Idaho, was sentenced to 46 months in prison and three years of supervised release. In addition, Sandoval agreed to civilly forfeit real property, bank accounts, a vehicle, and U.S.currency and coins, totaling approximately $315,335. Sandoval also agreed to a tax assessment of at least $210,000. Sandoval pleaded guilty on Aug. 12, 2014 to conspiracy to attempt to evade and defeat tax. According to court documents, over the past two decades Sandoval owned and operated various nightclubs in Canyon County.Beginning in 1998 and continuing to 2012, Sandoval conspired to fail to report $750,000 in income. Sandoval derived much of his unreported income from illegal outdoor

Homebuilder Sentenced for Defrauding Investors and Tax Evasion

By | Tax Evasion

On Oct. 21, 2014, in Baltimore, Maryland, Patrick J. Belzner, aka Patrick McCloskey, of Selbyville, Delaware, was sentenced to 180 months in prison and three years of supervised release on charges of wire fraud conspiracy, wire fraud and tax evasion. Belzner was also ordered to pay $19.805 million in restitution. According to court documents, from the fall of 2009 through August 2011, Belzner, a home builder, worked for a real estate development business known as the McCloskey Group, which was owned by another home builder. During that time, Belzner conspired with others to defraud investors through a fraudulent real estate investment scheme. Belzner also pleaded guilty to evasion of assessed tax payments for funds he stole from his employer in the years 1995, 1996 and 1998. Belzner admitted that between January 2006 and June 2011, he concealed income and assets from the IRS and made no payments on his tax debt through such schemes as placing his residences, other real estate and automobiles in the names of corporations that he formed. In February 2006 and again in January 2009, Belzner submitted forms to the IRS falsely claiming that he did not have sufficient income to make any payments on the assessed back taxes, penalties and interest. The total amount of assessed tax, interest and penalties owed by Belzner as of August 2013 was $2,619,870.

Financial Advisor Sentenced for Tax Fraud

By | Tax Evasion, Tax Fraud

On Oct. 2, 2014, in New Orleans, Louisiana, Jabari Ragas, of New Orleans, was sentenced to 42 months in prison and three years of supervised release for money laundering and tax fraud. Ragas was also ordered to pay nearly $1,700,000 in restitution for the money laundering count, and $259,210 for the tax fraud count. According to court documents, Ragas was employed by as a registered broker and investment adviser from 2005 through 2009. Ragas previously pleaded guilty to embezzling nearly $1,400,000 from clients, and failing to pay nearly $260,000 in tax due and owing to the IRS. In early 2006, a client of Ragas indicated that he wished to open a Simplified Employee Pension (SEP) account to allow him to contribute towards retirement. Without authorization, Ragas began moving money from the SEP account into an account controlled by Ragas. Ragas supplied the client with a fraudulent account statement along with a fraudulent balance. After using the interstate wire to embezzle funds from the client’s account, Ragas then committed money laundering by further transferring $20,000 into a different account that he controlled. Additionally, on Oct. 12, 2008, Ragas signed and filed an income tax return for 2007 that did not report approximately $288,000 in income.

Connecticut Man Sentenced for Tax Evasion

By | Tax Crimes, Tax Evasion

On Oct. 1, 2014, in Hartford, Connecticut, Frank Mete, of Berlin, was sentenced to 41 months in prison and three years of supervised release. Mete was also ordered to make full restitution to his victim investors and pay $666,851 to the IRS. On Dec. 4, 2013, Mete pleaded guilty to wire fraud and tax evasion. According to court documents, from approximately 2009 to November 2012, Mete operated an investment fraud scheme in which he held himself out as a broker of hard money loans between investors and purported individual borrowers who were willing to borrow money at interest rates of 15 to 18 percent. In fact, there were no such borrowers. In order to induce the investors to extend loans to the purported borrowers through him as the broker, Mete created false documents using the names of the fictitious borrowers. Mete forged signatures on the checks he received from the victim investors and deposited the funds into several bank accounts he opened in the borrowers’ names. Mete defrauded investors of approximately $1,191,610 and used the funds to pay for various personal expenses. Mete also failed to file federal income tax returns from 2009 to 2012, causing a tax loss of approximately $357,324.