Examples of Non-filer Investigations - Fiscal Year 2014
The following examples of non-filer investigations are written from public record documents on file in the courts within the judicial district where the cases were prosecuted.
Dental Center Owner Sentenced for Tax Evasion
On April 7, 2014, in Indianapolis, Ind., Sally Metzner was sentenced to 24 months in prison. Metzner previously pleaded guilty to tax evasion and failing to withhold social security and Medicare taxes for her employees. According to court documents, Metzner owned Anderson Dental Center in Anderson, Ind., for more than 10 years. Metzner, who is not a dentist, has a background in accounting and bookkeeping and personally controlled all of Anderson Dental’s financial records. Metzner did not pay or file personal income taxes from 2006 to 2010. Metzner evaded income taxes through various means, including accounting for her own income from Anderson Dental as “miscellaneous expenses,” and accounting for numerous personal expenses through the business as if they were business expenses, including claiming expenses for her daughter’s wedding were “rent.” Metzner also made numerous personal loans and gifts to family members and accounted for them as business loans or expenses.
Nevada Men Sentenced for Conspiring to Obstruct the IRS
On March 24, 2014, in Reno, Nev., Bret Ogilvie was sentenced to 60 months in prison, three years of supervised release and ordered to pay $315,286 in restitution. Linwood Tracy, of Fallon, Nev., was sentenced to 9 months in prison and three years of supervised release. They were each convicted of one count of conspiracy to defraud, and Ogilvie was also convicted of one count of corrupt interference with tax administration and five counts of presenting false claims to the IRS. According to the court records, from about Feb. 22 to Nov. 18, 2008, Ogilvie and Tracy conspired to impede and obstruct the IRS in their collection of income taxes by a number of means, including threatening to sue the IRS for $10 million if the IRS did not remove a tax lien on Ogilvie’s residence, by contacting businesses and telling them not to comply with IRS levies against Ogilvie, by setting up a corporation and transferring compensation that Ogilvie earned through his plumbing company to the corporate bank account in an attempt to evade taxes, by threatening to sue IRS employees, and by filing a frivolous lawsuit against IRS personnel. Between Dec. 8 and Dec. 10, 2008, and on March 30, 2011, Ogilvie also presented false claims to the IRS for income tax refunds for the tax years 2006 through 2010 totaling approximately $3.9 million. Ogilvie made the claims by preparing and causing to be prepared an IRS form indicating he held a Power of Attorney for the Bret Ogilvie Trust.
Certified Public Accountant Sentenced on Tax Charges
On March 17, 2014, in San Jose, Calif., Steven Frank Boitano was sentenced to 41 months in prison, one year of supervised release and ordered to pay $181,910 in restitution. Boitano pleaded guilty on Aug. 9, 2013, to failing to file federal income tax returns for 2005, 2006, and 2007. On Aug. 19, 2013, a jury convicted Boitano of the three remaining counts in the indictment, charging him with filing false tax returns for 2001, 2002, and 2003. According to evidence presented at trial, Boitano was a certified public accountant and partner with the accounting firm. In this role, Boitano provided tax return preparation and other accounting related services to his clients, and was also responsible for preparing the tax returns for his accounting firm. Boitano’s gross annual income from 2001 through 2007 was at least $275,000. Between 1991 and 2007, Boitano failed to timely file his individual federal income tax returns. Instead, he submitted requests for extensions of time, frequently along with partial payments. Thereafter, as the extended due dates for each year passed, Boitano failed to file his tax returns. Boitano was audited by the IRS at least twice between 1991 and 2007. Nevertheless, Boitano continued to fail to file income tax returns. In June 2009, the case was assigned to an IRS revenue agent. During a meeting with the revenue agent on Sept. 4, 2009, Boitano filed federal income tax returns for 2001, 2002, and 2003. On each of these tax returns, Boitano fraudulently reported making estimated tax payments of $26,000, $38,000, and $57,000, respectively, which he never actually made. As a result of these fabricated estimated tax payments, each return claimed a refund to which Boitano was not entitled.
New Jersey Attorney Sentenced for Income Tax Evasion and Failing to Pay Payroll Taxes
On March 11, 2014, in Trenton, N.J., Lee Gottesman, of Toms River, N.J., was sentenced to six months in prison, six months of home confinement, three years of supervised release and ordered to pay $27,384 representing taxes owed from 2006 to the present. Gottesman, an attorney, previously pleaded guilty to an indictment charging him with one count of federal income tax evasion and one count of failing to pay payroll taxes for the employees of his law firm. According to court documents, Gottesman operated a law firm in Toms River. In 2002, the IRS filed a levy on Gottesman’s assets because of unpaid taxes. Gottesman then opened a sub-account, within his attorney trust account, in the name of his wife. His wife had never been a legal client of his. Gottesman ran nearly all of his personal and business expenses through the account, closing all other business and personal accounts in his name. His payments from the account included more than $90,000 in mortgage payments for his home; more than $17,000 in household expenses, including maintenance on his pool, landscaping services and construction costs; and thousands of dollars in other personal expenses, such as life insurance premiums, auto body repair work and personal credit card payments. The scheme allowed Gottesman to avoid paying personal income taxes on the hidden income. Gottesman also withheld payroll and other taxes from his employees’ pay, but never filed the required forms or turned the withheld payments over to the IRS. Gottesman specifically admitted he did not pay all his personal income taxes owed for 2006 or payroll taxes for 2009.
Couple Sentenced for Attempting to Defraud Creditors and Fraudulently Obtaining Tax Refund Money
On March 10, 2014, in Orlando, Fla., Stephen Richnafsky, of North Royalton, Ohio, was sentenced to 20 months in prison and ordered to pay $42,021 in restitution. Richnafsky's domestic partner, Scylina Spikes, also of North Royalton, Ohio, was sentenced to two years of probation for her role in the scheme. On Nov. 19, 2013, Richnafsky pleaded guilty to mail fraud and obstruction of Internal Revenue laws and Spikes pleaded guilty to mail fraud. According to court documents, between July 2009 and August 2010, Richnafsky and Spikes conspired to evade their debts by mailing fraudulent documents to their creditors. These documents included letters disguised as official documents, fraudulent promissory notes, and other documents directing creditors to collect funds from fictitious "treasury accounts." The documents also included bills and account statements which were stamped or handwritten with statements such as "accepted for value and returned for value," and IRS Forms that were fraudulently presented as forms of payment. When creditors refused to accept these documents in satisfaction of Richnafsky’s and Spikes's debts, Richnafsky and Spikes would attempt to file personal liens against the employees, executives, and attorneys of the creditors. Richnafsky also filed four fraudulent tax returns, which falsely claimed taxes withheld from interest income from financial institutions. For tax years 2005 through 2008, Richnafsky claimed that the IRS had withheld more than $181,000 in interest income, when in fact no such income had ever been withheld.
Colorado Man Sentenced for Tax Evasion and Other Federal Charges
On March 6, 2014, in Denver, Colo., Michael Destry Williams, of Pueblo, Colo., was sentenced to 71 months in prison, five years of supervised release and ordered to pay $60,597 in restitution to the IRS. Williams was convicted by a jury on Nov. 5, 2013 for tax evasion, currency structuring, bank fraud and interfering with the IRS’s administration of the Internal Revenue laws. According to court documents and evidence presented at trial, Williams was self-employed as a general contractor focusing primarily on residential construction projects, including roofing, remodeling and the repair and restoration of residential structures sustaining fire and water related damage. He was also self-employed as a real estate investor involved in the purchase, renovation and resale of residential properties. Williams operated under the name of Greenview Construction, Inc., a Colorado corporation. From April 2005 and continuing through January 2008, Williams willfully attempted to evade a substantial amount of income tax and self-employment tax for calendar years 2005, 2006 and 2007. To conceal his income, Williams established and used trusts as part of his tax evasion scheme and structured over $90,000 in deposited funds from July 2008 through September 2008. In November 2009, Williams attempted to defraud a Colorado financial institution by depositing worthless fabricated United States Treasury checks for his own benefit. There were two false treasury checks totaling $55,000 payable to Greenview Construction. From October 2008 through December 2010, Williams mailed numerous frivolous correspondences to the Secretary of the Treasury, as well as various IRS offices, in an attempt to obstruct and impede the administration of the internal revenue laws.
Former Pennsylvania Police Chief Sentenced for Failure to File Tax Returns
On Feb. 25, 2014, in Pittsburgh, Pa., Nathan E. Harper, of Pittsburgh, was sentenced to 18 months in prison, one year of supervised release and ordered to pay $31,986 in restitution. Harper, a former Pittsburgh police chief, was previously convicted of conspiracy and willful failure to file income tax returns. According to court documents, from 2009 to 2012, Harper caused checks received by the police department to be diverted to two “off the books” accounts at a credit union. Using debit cards, Harper obtained over $31,000 in ATM withdrawals and debit purchases, all for his personal benefit. Harper also failed to file federal tax returns for the years 2008 to 2011.
Wisconsin Man Sentenced for Filing False Claim for Refund
On Feb. 13, 2014, in Madison, Wis., John Glavin, of New Lisbon, Wis., was sentenced to 36 months in prison and three years of supervised release. Glavin pleaded guilty on Dec. 4, 2013 to filing a false claim for refund with the IRS. According to court documents, Glavin submitted a false 2008 income tax return to the IRS claiming a tax refund of $700,704. The 2008 tax return included 12 fictitious Forms 1099-OID which falsely reported that Glavin had received $1,076,202 in income and had taxes withheld from that income. In addition, Glavin filed multiple lawsuits in federal court to stop the enforcement of IRS subpoenas for records, arguing that “sovereign citizens” are not citizens of the United States and that Form 1040 is not legitimate. Glavin also sent documents to IRS employees expounding sovereign citizens’ beliefs stating that he was exempt from taxes. These documents included fictitious promissory notes for $75,000.
Former Football Player Sentenced for Filing Fraudulent Income Tax Returns
On Feb. 10, 2014, in Austin, Texas, Gregory P. Boyd was sentenced to 33 months in prison and ordered to pay $185,129 restitution to the IRS. In Nov. 2013, jurors convicted Boyd of three counts of filing fraudulent income tax returns. Evidence and testimony presented during trial revealed that Boyd knowingly filed false income tax returns for 2004, 2005 and 2006. On each tax return, Boyd declared that he received zero income when in fact, during these years he worked in the field of real estate development and received approximately $795,000 for the three years with tax due of approximately $178,080. Evidence at trial also revealed that Boyd had not paid income taxes on any of the years 2004 through 2011. Boyd testified during the trial that he believed his tax returns were true and complied with the law, based on ideas he learned from the book “Cracking the Code” by Peter Eric Hendrickson. Hendrickson appeared at trial and testified as a witness for the defense. Boyd specifically testified that he believed, based on Hendrickson’s book, that the income tax applies only to the income of federal government employees and federal government contractors, as well as income derived from investments in federal government securities.
New Mexico Man Sentenced on Tax Charges
On Feb. 7, 2014, in Albuquerque, N.M., Bill Melot, a farmer from Hobbs, N.M., was sentenced to 168 months in prison, three years of supervised release and ordered to pay $18,469,998 in restitution to the IRS and $226,526 to the United States Department of Agriculture (USDA). Melot was previously convicted of tax evasion, failure to file tax returns, making false statements to the USDA and impeding the IRS. According to court documents and evidence presented at trial and at sentencing, Melot has not filed a personal income tax return since 1986, and owes the IRS more than $25 million in federal taxes and more than $7 million in taxes to the state of Texas. In addition, Melot has improperly collected more than $225,000 in federal farm subsidies from the USDA by furnishing false information to the agency. Specifically, Melot provided the USDA with a false Social Security number (SSN) and a fictitious employer identification number (EIN) to collect federal farm aid. Melot took numerous steps to conceal his ownership of 250 acres in Lea County, N.M., including notarizing forged deeds and titling the property in the name of nominees. Additionally, Melot used false SSNs and fictitious EINs to hide his assets from the IRS. He also maintained a bank account with a Swiss financial institution which he set up in Nassau, Bahamas, in 1992, and failed to report the account to the United States Treasury Department as required by law.
Former Tennessee Resident Sentenced for Tax Evasion
On January 14, 2014, in Nashville, Tenn., Jimmie Duane Ross, of Lehi, Utah, and formerly of Sevierville, Tenn., was sentenced to 51 months in prison, three years of supervised release and ordered to pay $532,389 in restitution. On August 7, 2013, Ross was convicted of five counts of tax evasion following a jury trial. According to court documents, Ross won a monetary award of approximately $840,000 in 1999 after arbitration of an employment dispute with a former employer. Ross then filed a false mortgage on his residence, a false lien on his vehicle, dealt extensively in cash, and directed funds to an offshore account in order to avoid paying the full amount he owed in income tax for 1999. In addition, from 2004 through 2007, Ross earned commission income for referring clients to what appeared to be an investment company and evaded his taxes by using nominees and other means.
Anesthesiologist Sentenced for Tax Evasion
On January 9, 2014, in Amarillo, Texas, Edgar A Lockett, Jr. was sentenced to 45 months in prison and three years of supervised release. Lockett, a self-employed anesthesiologist, was convicted in September 2013 on six counts of tax evasion. According to evidence presented at the trial, Lockett has not filed income tax returns since 1999, except for a joint return filed with his spouse for tax year 2007. He owes $1,432,740 in unpaid income taxes for tax years 2000 through 2010. Lockett concealed from the IRS the nature, extent and location of his assets by placing funds and property in the names of nominee companies and secreting his income in bank accounts that he opened using his deceased father’s name and social security number.
Former City Councilwoman Sentenced for Tax Evasion
On January 8, 2014, in Hammond, Ind., Marilyn Krusas, of Gary, Ind., was sentenced to 12 months and one day in prison and one year of supervised release. On April 18, 2013, Krusas pleaded guilty to tax evasion. According to court documents, Krusas earned income through employment as a property manager and an elected city councilwoman. For calendar years 1991 through 2010, Krusas was required to file individual federal tax returns but failed to do so. Between 1997 and 2010, the IRS sent correspondence to Krusas about her failure to file tax returns and the amount of money she owed to the IRS. The IRS assessed Krusas a total of $157,413. Between February 2009 and December 2010, Krusas received an inheritance of $232,680 in five payments. Krusas admitted that she attempted to conceal the inheritance money from the IRS and others through various means. She withdrew substantial sums of cash from her bank account and obtained money orders and cashier checks. She sent about $50,000 to a relative, kept about $60,000 in cashier’s checks and used some of the money to payoff her mortgage and other creditors. Krusas admitted that she did not use any of the inheritance to pay her IRS debt.
Husband and Wife Sentenced for Tax Defiance Scheme
On January 6, 2014, in Atlanta, Ga., Timothy Thomas and Mary Beth Thomas, of Jackson County, Ga., were sentenced for their respective roles in a criminal tax scheme. Timothy Thomas was sentenced to 24 months in prison. Mary Beth Thomas was sentenced to ten months in prison. The couple was also ordered to pay $506,350 in back taxes, interest, and penalties to the IRS. On May 10, 2013, Timothy Thomas pleaded guilty to one count of conspiracy to defraud the IRS and Mary Beth Thomas pleaded guilty to one count of willfully failing to file an income tax return. According to information presented in court, in the 1990s, Timothy and Mary Beth Thomas, who were married and jointly owned and operated a deck and patio construction business, stopped filing federal income tax returns. They then hired American Rights Litigators (ARL), an organization that sold and promoted tax defiance schemes, to send obstructive and harassing materials to the IRS on their behalf. The IRS repeatedly sent notices to the couple notifying them that they had to pay their federal income taxes and that they had to comply with the tax laws. After the IRS shut down ARL as a result of fraudulent anti-tax actions, Timothy and Mary Beth Thomas continued to send a variety of obstructive, frivolous and harassing documents to IRS and Department of Treasury officials. These documents included statements that they were not United States citizens but instead were American citizens; that they were not subject to the federal income tax laws; and that paying income tax was voluntary. Finally, after a decade of not filing tax returns, the couple submitted four false tax returns claiming over $1,000,000 in fraudulent refunds from the IRS. They also submitted fictitious financial instruments to the federal government, to include a document purporting to be a $100 billion private registered bond, and instructed the government to use this bogus bond to pay any of their debts to the government. Despite earning substantial money from their business, Timothy and Mary Beth Thomas failed to pay over $350,000 in federal income taxes from 2003 to 2012. In a separate case, Stephen Paul Thomas and Patricia Denese Anderson, both of Lawrenceville, Ga., were convicted for a similar tax defiance scheme. They were both sentenced on January 3, 2013. Stephen Paul Thomas was sentenced to 60 months in prison and Patricia Denese Anderson was sentenced to 51 months in prison.
Florida Man Sentenced for Tax Fraud and Obstruction
On December 18, 2013, in Orlando, Fla., Daniel M. Metz was sentenced to 30 months in prison, three years of supervised release and ordered to pay $112,995 in restitution. Metz was found guilty by a federal jury on July 18, 2013 of filing false returns and attempting to obstruct justice. According to court documents, in 2009, Metz's business account was the subject of an IRS civil audit. During the course of the audit, the auditor realized that Metz had not filed personal tax returns for years 2005, 2006, and 2007. After being told about the personal tax returns, Metz prepared the returns and attached false Forms 1099, which he had prepared. Metz mailed the returns to the auditor. The auditor suspected that the Forms 1099 were false and requested records from Metz's personal bank accounts. The banks confirmed that the Forms 1099 were false; therefore, the personal tax returns were never processed. Through various means, Metz tried to hinder the IRS' investigation, including filing a lawsuit against the IRS Commissioner and the special agent who was conducting a criminal investigation. That lawsuit was ultimately dismissed.
Indiana Man Sentenced for Tax Fraud
On December 17, 2013, in Evansville, Ind., Gregory P. Stodghill, of Vincennes, Ind., was sentenced to 60 months in prison, three years of supervised release and ordered to pay $407,324 in restitution for tax fraud. According to court documents, Stodghill engaged in a series of complicated financial schemes that funneled outside investor funds through a number of offshore shell companies. This and a real estate flipping scheme conducted, helped Stodghill generate over one million dollars in personal income. Following these schemes, Stodghill filed a false 2006 federal income tax return and never filed one for 2008. Stodghill later filed a number of frivolous documents with the IRS claiming he had no tax liability.
South Dakota Man Sentenced for Income Tax Evasion
On December 13, 2013, in Sioux Falls, S.D., Dennis Wicks, of Custer, S.D., was sentenced to 14 months in prison and two years of supervised release. Wicks was also ordered to pay a $100 special assessment to the Federal Crime Victims Fund and $110,015 in restitution to the IRS. Wicks pleaded guilty on August 22, 2013 for tax evasion. According to court documents, Wicks was the owner of Wicks International Network. Wicks knew he was required to report all of his business gross receipts on his income tax returns. In 2009, Wicks failed to file a tax return and instructed some of his patients to make payments to another entity in order to conceal a portion of his income. Wicks also attempted to evade or defeat taxes for the years 2001, 2002, 2005, 2006, 2007, 2008, and 2010.
Emergency Room Doctor Sentenced for Failure to File Tax Returns
On December 11, 2013, in Atlanta, Ga., Dr. Michael Austin, of Atlanta, Ga., was sentenced to 12 months and one day in prison, one year of supervised release and ordered to pay $215,906 in restitution to the IRS. Austin pleaded guilty on August 27, 2013 to willfully failing to file individual income tax returns for tax years 2008 and 2009. According to court documents, during 2008 and 2009, Austin was a medical doctor licensed by the state of Georgia who earned substantial income from practicing medicine at various hospitals, clinics and other health care institutions. Austin earned at least $213,931 in 2008 and $210,644 in 2009. However, Austin willfully failed to file an individual income tax return for both years.
Florida Dentist Sentenced for Failing to File Tax Returns
On December 10, 2013, in Ocala, Fla., Thomas W. Harter, D.M.D., was sentenced to 36 months in prison and ordered to pay $438,384 in restitution to the IRS. Harter was found guilty by a federal jury on September 17, 2013 for failure to file income tax returns. According to the evidence and testimony presented at trial, Harter worked as a dentist in the Ocala area for approximately twenty years. He stopped filing federal income tax returns beginning in the year 2000. From 2006 through 2011, Harter received a gross income, from his dental practice, of at least $1,709,230. Despite this income, Harter willfully failed to file a single tax return or pay any income tax during that same time period.
California Businessman Sentenced for Conspiring to Defraud the IRS
On December 5, 2013, in Los Angeles, Calif., Gary Mach, of Palm Desert, Calif., was sentenced to 16 months in prison, two months of house arrest, 18 months of probation and ordered to pay $270,725 in restitution to the IRS. Mach pleaded guilty on August 18, 2013 to conspiracy to defraud the United States. According to court documents, beginning around January 2002 and continuing through December 2010, Mach failed to report substantial income he earned from CSPS, a pool-servicing business operated throughout Riverside County. Mach and others established fictitious trusts which they used to receive income and hold assets in an attempt to conceal the assets and income from the IRS. Mach purported to operate a trust called “Quintessential,” and directed that his paychecks be made payable to Quintessential. He also opened a bank account in the name of Quintessential where he deposited CSPS proceeds. Mach did not report to the IRS any of the income he earned from CSPS between 2002 and 2010. In furtherance of the conspiracy, Mach also attempted to impede an IRS summons issued to a bank for business account records by closing his bank accounts. Mach admitted that his total unreported income for the tax years 2002 through 2010 was $1,410,430.
Owners of Missouri Real Estate Company Sentence for Tax Fraud
On December 3, 2013, in St. Louis, Mo., John P. Calandrella, of Lake St. Louis, was sentenced to 18 months in prison and ordered to pay $227,032 in restitution. Anthony R. Calandrella, of Lake St. Louis, was sentenced to six months in prison and ordered to pay $198,644 in restitution. In July 2013, John and Anthony Calandrella pleaded guilty to three counts of attempting to evade taxes. According to court documents, John and Anthony Calandrella owned Golden Delta Enterprises (GDE), a business that purchased, renovated, and then sold or rented homes in the St. Louis metropolitan area. For the tax years 2003, 2004, and 2005, GDE generated substantial profits, part of which went directly to the defendants. Accordingly, they received substantial, personal gross income which required them to prepare and file individual federal income tax returns. However, for these three tax years, the Calandrellas had returns prepared, but failed to file the returns or pay any taxes due and owing. Additionally, they sent letters to the IRS claiming to be citizens of the sovereign state of Missouri therefore not required to sign or file federal income tax returns or pay federal income taxes. They also concealed personal income and assets in order to lower potential tax liability.
Nevada Man Sentenced for Failing to File Tax Returns
On October 16, 2013, in Las Vegas, Nev., Johnny Ray Taylor, Jr., was sentenced to 25 months in prison, three years of supervised release and ordered to pay $117,559 in restitution to the IRS. Taylor pleaded guilty in May 2013 to one count of tax evasion. According to court documents, from 2008 through 2010, Taylor earned at least $393,188 in gross income. He failed to file tax returns for tax years 2008, 2009, and 2010. Taylor took several actions to conceal his income and evade his tax obligations, including having third parties pay automobile lease payments, make rental deposits and house payments, and conducting financial transactions in cash.
North Carolina Doctor Sentenced for Tax Offense
On October 3, 2013, in Raleigh, N.C., Susan Marie Lee was sentenced to 36 months in prison and ordered to pay $496,854 in restitution to the IRS. Lee pleaded guilty on May 14, 2013 to a criminal information charging her with corrupt interference with the Internal Revenue laws. According to the investigation, from 1996 through and 2009, Lee endeavored to obstruct and impede the IRS by failing to file income tax returns or pay taxes she claimed to owe, filing false income tax returns, forming sham entities to disguise personal expenses as payments related to her dental practice, and transferring ownership of her real property to nominees. Lee sought to divert her income into sham corporations and hide her assets from seizure. Finally, in 2009, she filed for bankruptcy in an effort to discharge nearly $1 million in tax debt due and owing to the IRS.