Date: June 11, 2020
CINCINNATI, OHIO – David Keith Fraley of Middletown, OH pleaded guilty in U.S. District Court to income tax evasion relative to evading the payment of income tax due to the Internal Revenue Service (IRS) announced Bryant Jackson, Special Agent in Charge, Internal Revenue Service Criminal Investigation, Cincinnati Field Office.
According to court documents, Fraley attempted to evade the payment of income taxes and the assessment of income taxes associated with his 2009 through 2012 income tax returns. Fraley evaded the payment and assessment of income taxes by halting the deposits of his income in his bank accounts once the IRS started levying his bank accounts.
"David Fraley took extensive measures in an effort to hide his income and to defeat his tax liabilities, but the IRS was not fooled and this degree of trickery, dishonesty and deceit will be punished," said Bryant Jackson, Special Agent in Charge, IRS Criminal Investigation, Cincinnati Field Office.
Fraley did not file his 2009 income tax return timely and a substitute for returns (SFRs) was posted for Fraley. Later, the IRS issued Letter 1058, "Final Notice, Intent to Levy and Notice of Your Right to Hearing" to Fraley for the 2009 income tax year. The SFRs were assessed for 2007, 2008, and 2009 for a total of $1,071,382 in tax due and owing (excluding penalties and interest). Fraley spoke to the IRS Revenue Officer and asked for an extension to file the 2009 tax return. Based on the Letter 1058, Fraley understood that the IRS would institute levies toward the funds held in his bank accounts to recover the tax due and owing.
In an effort to evade the payment of his income tax liabilities for the years 2009 through 2012, Fraley transferred ownership of income to his business and brother. Initially, Fraley called his contractor and told them not to issue any income in his name and Social Security Number (SSN), but to issue the income in his business name and Employer Identification Number (EIN). Then the levies against the bank accounts were ordered, which began the IRS's levying of wages from Fraley's account. Subsequently, Fraley stopped making deposits into his business bank account which was being levied and started making deposits into his brother's bank account and he even called his contractor a second time and asked the contractor to not issue any more income in his business name and EIN and to issue the income in his brother's name and SSN.
The total tax loss for the 2009 though 2102 income tax years was $337,213.
Income tax evasion carries a maximum penalty of 5 years in prison and a $250,000 fine.
This case is being prosecuted by Assistant United States Attorney Kenneth L. Parker and was investigated by special agents of IRS-Criminal Investigation.