Category Archives: Tax Fraud

Business Owner Pleads Guilty to Tax Evasion

Joseph Wilke, the owner of a Marinette heating and air conditioning business, pleaded guilty to federal tax evasion charges on Tuesday in federal court in Green Bay.  The announcement was made by United States Attorney James L. Santelle.

Wlike, 56, admitted that he failed to report more than $130,000 of income which he earned from a side-business during the years 2007-2009.  This caused him to underreport on federal taxes by more than $51,000 according to the United States Department of Justice.

Based on his plea agreement, Wilke faces a maximum sentence of 5 years in prison and fines up to $250,000.  He will also make restitution to the Internal Revenue Service for his unpaid taxes, interest, and penalties, which totals more than $108,000.

Wilke was released on bond and a sentencing hearing has been scheduled for September 29, 2014.

This case was investigated by the Internal Revenue Service Criminal Investigation and prosecuted by Assistant United States Attorney Matthew L. Jacobs.

Tax evasion is the illegal evasion of taxes by individuals, corporations, and trusts.  Typically, tax evasion schemes involve the misrepresentation of income to the Internal Revenue Service by underreporting income, inflating deductions, or hiding money and interest altogether in offshore accounts. The estimated federal revenue lost to tax evasion was an estimated $305 billion during the calendar year of 2010.

If you or someone you know has accused of tax evasion, it is important that you contact a white collar attorney to handle your case.  The attorneys of Parkman White, LLP are experienced in a variety of legal matters and have a history of success in the courtroom. Call to schedule a consultation today!

Atlanta Couple Sentenced in Tax Fraud Scheme

Federal authorities have announced that a married couple from Atlanta, GA, has been sentenced for their roles in an identity theft and income tax fraud scheme that took place in early 2013.  Justin Cody, 33, received a seven year and three month prison sentence while his wife, Aeshia Wilmore, 25, was sentenced to two years in prison.

Authorities say Cody and Wilmore participated in a scheme that began in February 2013 in which stolen identities were used to file hundreds of fraudulent income tax returns.  Cody used stolen personal information, and fabricated wage and withholding information, to fill out tax returns which led to claims of more than $600,000 in refunds from the Department of Treasury.  He then had the refunds applied to a series of prepaid debit cards that he and his wife used at ATMs.

In November, Cody and Wilmore each pleaded guilty to a substantive count of theft of public funds.  Cody also pleaded guilty to aggravated identity fraud.

J. Britt Johnson, Special Agent in Charge, FBI Atlanta Field Office, stated, “The FBI is pleased with the role it played in bringing these defendants to justice. The FBI will continue to provide its investigative resources and assets in protecting individuals’ identities and their use in these growing schemes involving false tax returns.”

This case was investigated by special agents of the Internal Revenue Service Criminal Investigation and the Federal Bureau of Investigation.

Assistant United States Attorney Karlyn J. Hunter and Nekia Hackworth prosecuted the case.

Divorce Attorney Sentenced for Tax Evasion

Mary Nolan, a former California divorce attorney, has been sentenced to two years in prison for illegal eavesdropping and tax evasion.  The sentence was handed down on February 3, 2014 by Senior United States District Court Judge Charles R. Breyer.  Nolan, 61, must also serve three years of supervised release, 240 hours of community service, and pay restitution in the amount of $468,918.01.

Nolan was indicted by a grand jury on September 6, 2012 and charged with tax evasion for the years 2005 through 2009, unlawful interception of communication, and conspiracy to unlawfully intercept communications.

In pleading guilty to the charges, Mary Nolan admitted causing her staff to illegally intercept telephone conversations by accessing a listening device installed in a victim’s car by private investigator Christopher Butler.  Nolan also confessed to willfully evaded over $400,000 in federal taxes and obstructed justice by submitting false contracts to the Internal Revenue Service during and audit.

Christopher Butler pleaded guilty to unlawful interception and several other offenses in May of 2012.  He was sentenced to 60 months’ imprisonment after admitting to have installed approximately 75 to 100 unlawful listening devices at the request of clients or their attorneys.  Butler’s sentence will be serviced concurrently with the 96-month sentence on his other counts of conviction.

The Federal Bureau of Investigation, the Internal Revenue Service-Criminal Investigation, and the Contra Costa County District Attorney’s Office, investigated this case.  Assistant United States Attorneys Hartley M. K. West and Alycee Lane were in charge of the prosecution.

The Adams Produce Saga – Food for Thought

How a Century-Old Produce Company Went Down in a Climate of Fraud

             When the Adams Produce, the family-owned leading distributor of fresh fruits and vegetables across the Southeast, was bought out by a private equity firm in 2010, it appeared the sky was the limit for the company. So how could such a strong company that had been around for 100 years suddenly collapse? Just ask Scott Grinstead, the 45-year-old former CEO of Adams Produce, who pleaded guilty to charges of fraud, misprision, and tax evasion in April. Grinstead was sentenced this week to 16 months in federal prison, and ordered to pay $450,000 in restitution. The U.S. District Judge also ordered him to serve 20 hours of community service. The story begins in 2011, when four company officials made a decision that would ultimately destroy the company.

Adams Produce had a contract with the Defense Supply Center Philadelphia, and federal entity in charge of distributing produce to military bases, public school systems, junior colleges and universities. Adams would purchase the produce from a national distributor, and the Defense Supply Center agreed to pay a certain amount over Adams’ cost for their services. The trouble began when four executives within the company began to create false invoices and purchase orders, which reflected that the produce from the national distributor was priced higher than it actually was. By submitting these invoices to the Defense Supply Center, Adams Produce fraudulently received over $480,000 from the government.

CEO Scott Grinstead pleaded guilty to knowing what these four executives were up to and doing nothing about it. He also pleaded guilty to wire fraud, another count based on investigators’ discovery that he had wired hundreds of thousands of dollars to his personal bank account in order to pay for jewelry, clothing, travel expenses and even a lake house on Lake Martin. Finally, he pleaded guilty to two counts of failure to file a tax return, in 2009 and 2010 on well over $200,000 worth of income.

Charges such as fraud, misprision of a felony, and failure to file federal tax returns are serious offenses that can carry even harsher penalties than those Mr. Grinstead received. If you have been indicted or received a target letter from a federal investigative agency, it is paramount that you contact an attorney who is experienced in white-collar defense. The attorneys at Parkman White, LLP have decades of experience in pre-indictment representation, federal trial representation, and sentencing matters. Visit our website today for a consultation, and let us put our experience to work for you.

Woman Pleads Guilty to Tax Fraud Conspiracy

Georgia Freeman, 42, pleaded guilty on Tuesday to one charge of tax fraud after she attempted to defraud the Internal Revenue Service out of more than $50,000 by obtaining false claims for federal income tax refunds.  Freeman’s guilty plea was entered at the Southern District of Ohio federal courthouse in Cincinnati.

According to court documents, between January and February of 2012, Freeman allegedly used fraudulent W-2 forms that indicated wages were paid to individuals who didn’t work and were not eligible to receive income tax refunds.  In total, Freeman was able to scam the IRS out of $51,075.  She is also accused of recruiting other conspirators in the Cincinnati area to provide her with their personal identification information so she could file the false returns.  The funds Freeman was able to receive were split between her co-conspirators and other individuals.  Prosecutors allege that Freeman received payments of up to $3,000 for each of the fraudulent income tax refunds.

Georgia Freeman, of Middletown, faces a maximum sentence of 10 years in prison and fines up to $250,000.

This case was prosecuted by Senior Litigator Anne Porter and Senior United States District Judge Herman J. Weber presided over the case.  The investigation was led by agents of IRS-Criminal Investigation, the Cincinnati Police Department, and the Lockland Police Department.

Two Jacksonville Men Indicted on Tax Fraud Charges

Antonio Gadsden, 37, and Troy Solomon, 29, have been charged by a federal grand jury for their role in a tax fraud scheme.  They both face counts of defrauding the government and multiple counts of aiding and assisting in the preparation of false income tax returns. Both men were arrested on federal warrants on Tuesday.

According to the indictment, the two men worked at Solomon’s Tax Services, LLC and conspired to defraud the United States by preparing tax returns that used false information in order to maximize the refund amount received.  These larger refunds resulted in more business, which lead to higher tax preparation fees.

Solomon is also accused of stealing the identity of an individual in order to participate in the IRS E-File Program.  He used this person’s identity to obtain an Electronic Filing Identification number.

The indictment also reports that Solomon is accused of falsely reporting about $700,000 in business losses and Gadsden over $110,000 in business losses and moving expenses.

Each man faces a maximum penalty of three years for each charge of conspiracy.  Gadsden also faces up to three additional years for each of his four false-preparation charges.  Solomon also faces up to 20 years in prison for each of his 16 charges of wire fraud, up to three years for each of his 16 false-preparation charges, up to two consecutive years for the aggravated identity-theft charge, and up to one year for the failure-to-file charge.

This case was investigated by Internal Revenue Service Criminal Investigation.

Prominent Phoenix Businessmen Convicted of Tax Evasion

Stephen M. Kerr and Michael Quiel have been convicted on federal tax evasion charges by a federal jury in Phoenix for filing false individual tax returns in 2007 and 2008.  According to the United States Justice Department and Internal Revenue Service, the two venture capitalists did not disclose assets in offshore bank accounts in Switzerland.  Stephen Kerr was also convicted of failing to file reports on foreign bank accounts.  The men were originally indicted in January of 2012 for trying to defraud the Internal Revenue Service.

According to prosecutors, a San Diego attorney named Christopher M. Rusch helped Kerr and Quiel set up foreign bank accounts to conceal stock ownership, control of stock, and income deposited into the accounts starting in 2004.  The federal agencies claim the pair’s assets in those accounts totaled $8.2 million in 2007.  During the trial, prosecutors claimed Kerr and Quiel had Rusch transfer money back to the United States through Rusch’s Interest on Lawyer’s Trust Account (IOLTA) before sending the money to the men. That included $2 million that Kerr used to buy a golf course in Erie, Colorado. Rusch pleaded guilty on February 6th to conspiracy to defraud the government and failing to file the foreign bank and financial bank accounts.  He also testified at Kerr and Quiel’s trial.

Under federal law, United States citizens are required to disclose taxes on foreign bank accounts of $10,000 or more. Stephen Kerr and Michael Quiel are scheduled to be sentenced in June on tax fraud charges.  Christopher Rusch will be sentenced in July.

Tax Evasion Prosecutions Expected to Increase

With the announcement of the recent arrest of South Carolina Rep. Harold Mitchell for alleged tax evasion and the U.S. Justice Department’s federal tax evasion investigation of several Israeli banks, tax fraud has been in the news this week. This signals an increased emphasis on tax related prosecutions. With the federal government and many states such as Alabama, Florida, Louisiana, Georgia and New York struggling financially, tax investigations are believed to have increased in an effort to recoup tax revenue.

While the Internal Revenue Service receives over 100 million tax returns each year, typically your chances of being audited are around 1%. Traditionally, very few of these audits led to criminal charges, but when that happens, there are serious consequences of up to 5 years in prison and a $100,000 fine, while an organization may be fined up to $500,000. The taxes at issue with interest, a fine, and the costs of prosecution may also be imposed. A tax evasion conviction can also carry consequences beyond sentencing such as the loss of professional or business licenses, loss of right to possess firearms, deportation of illegal aliens, loss of voting and other civil rights, not to mention the embarrassment that is associated.

A person can be convicted of tax evasion or tax fraud if they willfully attempt to avoid paying a lawfully due tax. Tax evasion consists of three elements: (1) an underpayment of tax; (2) caused by the defendant’s affirmative act; (3) committed with the willful intent to evade or defeat the tax. While there is no law to prevent it, the Justice Department rarely pursues an evasion of less than $2500. Most tax evasion cases deal with capital gains and income taxes, and usually involve a pattern of underpayment or evasion over an extended period.

One common example of a tax evader is a citizen or business who deals primarily in cash and fails to report all cash sales, thus avoiding income tax on the revenues generated. Another common offender is someone also charged with theft or the sale of narcotics, who for obvious reasons does not report this revenue as income to the IRS. Probably the most common form of tax evasion is the fraudulent claim of itemized deductions. For instance, a company executive may use funds try to claim deductions for expenses that were really personal and not true business expenses.

Many times tax evasion investigations begin with an angry ex-spouse or ex-employee seeking revenge, or seeking to obtain a money reward as a “whistle-blower”. A criminal attorney specializing in tax evasion defense should be contacted immediately upon learning you are the target of such an investigation. A tax evasion attorney may be able to avoid charges, or protect you in the event charges are brought. If you believe you are the subject of a tax evasion investigation, call our white collar attorneys at 205-552-4705 for us to begin your defense immediately.