Clarksville man sentenced to 9 months in federal prison for $1.1 million tax fraud scheme


Date: September 20, 2022


NEW ALBANY — Tracy E. Leonard, of Clarksville, Indiana, was sentenced to nine months in federal prison after pleading guilty to subscribing to a false federal income tax return.

According to court documents, Leonard operated a private investigation business in Clarksville. From 2015 to 2019, Leonard hid his income from the IRS by cashing 186 business income related checks, at a Clarksville check cashing business, rather than depositing the checks into a bank account. The check cashing business charged Leonard a fee of up to 10% to cash each check. During 2018 and 2019, Leonard cashed checks weekly that were typically over $25,000 and often over $50,000.

There was a significant discrepancy between the amount of the checks received and cashed by Leonard and what he reported as income on his federal income tax returns for 2015 through 2019. Leonard's unreported income for the 5 years exceeded $1.1 million. Leonard also owes the IRS $300,339 for taxes lost due to his filing of false tax returns.

Zachary A. Myers, U.S. Attorney for the Southern District of Indiana, and Justin Campbell, Special Agent in Charge, Chicago Field Office, IRS-Criminal Investigation, made the announcement.

U.S. Attorney Myers thanked Assistant United States Attorney James M. Warden, who is prosecuting this case.

IRS-Criminal Investigation investigated the case. The sentence was imposed by U.S. District Judge Tanya Walton Pratt. As part of the sentence, Judge Pratt ordered that Leonard be supervised by the U.S. Probation Office for two years following his release from federal prison. Restitution will be set in a future court order.