Noted once more; a lot of shingles; refund's in the mail; and other highlights of recent tax cases.
Shipping and mishandling
Orlando, Florida: Arthur Grimes, of Ocoee and Orlando, Florida, has been sentenced to 21 months in prison for obstructing the IRS in connection with his use of the "Note Program," a tax fraud.
From 2015 to 2018, Grimes was a client of a scheme promoted by Jasen Harvey and Christopher Johnson which involved Harvey and Johnson filing returns for clients that claimed that large non-existent withholdings had been paid to the IRS and that sought refunds based on those withholdings.
Grimes caused four false income tax returns prepared by Harvey to be filed that sought refunds totaling $627,587, of which the IRS paid some $270,000. When the IRS tried to recover a refund issued to Grimes based on one of those returns, Grimes made false statements and submitted false documents to an IRS revenue officer and transferred funds to a nominee bank account.
Harvey and Johnson previously pleaded guilty to conspiring to defraud the IRS and have been
Grimes was also ordered to serve a year of supervised release and to pay some $238,973 in restitution to the United States.
Hillsville, Virginia: Business owner Timothy Agnew has pleaded guilty to filing returns underreporting his income from his construction company.
He owned and operated Red Hill Construction, which repaired and installed roofs, remodeled homes and built home additions. Between 2017 and 2021, Agnew filed personal returns that substantially underreported his gross receipts and income from the company; he omitted more than $2 million in gross receipts earned from construction projects for which the customers did not directly report those payments to the IRS through 1099s.
Agnew caused a tax loss to the IRS of more than $375,000.
Sentencing is April 3. He faces up to three years in prison, as well as a period of supervised release, restitution and monetary penalties.
Green Bay, Wisconsin: Business owner Douglas Larson has pleaded guilty to failure to truthfully account for and pay over federal employment taxes.
Larson owned and operated Mods International, later known as Mods Client Services, which manufactured and installed residential and commercial buildings out of shipping containers. Late last year, the U.S. government alleged that Larson had failed to pay over some $396,082.77 in employment taxes for each quarter from January 2018 through September 2021.
Parties agreed in the plea agreement that Mods and a related company that Larson owned and operated failed to pay over employment taxes that they'd withheld, as well as employment taxes they owed before and after the period above. The total tax loss agreed to was $1,102,805.13.
Sentencing is April 4. Larson faces up to five years in prison and up to a $250,000 fine. He also faces up to three years of supervised release after any prison term.
Missoula, Montana: Guy S. Cook, of Dripping Springs, Texas, owner of a business that operated in Belgrade, has pleaded guilty to tax evasion.
The government alleged that from about January 2014 to November 2021 in Belgrade, Cook tried to evade paying income taxes for 2014 and 2015.
He owned Bacterin International, which developed clinical medical laboratories. In 2014, Cook sold his shares in the company and obtained $2,467,176 in capital gains. He reported this income in 2014 and 2015, including taxes due totaling $643,884. Cook did not pay these amounts to the IRS, though his tax preparer told him he was required to do so.
Between 2017 and 2021, Cook took steps to avoid paying his taxes, including using business bank accounts and a company credit card to pay more than $300,000 of his personal expenses and debts; using nominee bank accounts to remove more than $380,000 from his business for personal use; and converting more than $600,000 in his salary to stock in his business.
Cook faces up to five years in prison, a $100,000 fine and three years of supervised release.
Sewell, New Jersey: Jose Camilo Perez Jr. has admitted to evading more than $3.4 million in taxes.
Perez controlled a company that digitized medical records for hospitals and other health care entities. From 2016 through 2023, the business received more than $8 million for its services. Perez tried to evade assessment of federal income taxes by cashing checks payable to the business at a check cashing business rather than depositing those checks into the business bank account or his personal bank account; he used the cash for personal expenses and to pay payroll.
From 2016 through 2023, he did not report to the IRS any of the income he received from the business. As a result, Perez evaded income taxes of more than $3.4 million.
The tax evasion charge carries a maximum of five years in prison and a $250,000 fine. Sentencing is May 20.
Roanoke, Virginia: Herman Estes has pleaded guilty to real estate and tax fraud related to his scheme to obtain a $1.3 million area home.
He pleaded guilty to conspiring to commit wire fraud, wire fraud, mail fraud, bank fraud and filing false claims against the United States.
In March 2023, after filing a false amended 2021 income tax return claiming he was entitled to a refund of $18.3 million, Estes made a $1.3 million cash offer for a property and provided a proof-of-funds letter that he'd merely created using an online form. He also provided the real estate agent with contact information for his co-conspirator, purportedly his trust manager who had authority to approve the offer.
As payment for the property, Estes tendered a fraudulent cashier's check that he had signed in the amount of $1,307,199.43, purportedly drawn on the Federal Reserve Bank of Richmond. Funds in that amount were debited to the settlement company's trust account before the check was identified as fraudulent.
In March 2023, Estes filed another false return claiming he was entitled to a $2.9 million refund.
Estes faces up to 20 years in prison for the wire fraud conspiracy, wire fraud and mail fraud counts, up to 30 years for bank fraud and up to five years for the false claims counts, plus additional potential penalties related to the commission of these offenses while released on bond. He also faces a period of supervised release, restitution and monetary penalties.
Providence, Rhode Island: Former personal injury attorney Peter P.D. Leach has been sentenced to 33 months in prison, to be followed by two years of supervised release for wire fraud and tax evasion.
At the time of his
Leach also admitted that from 2014 to 2019 he took multiple steps to conceal his gains from the IRS, including by making false statements on IRS forms regarding his assets; making false statements to revenue officers about his ability and willingness to pay his taxes and about his withdrawal of more than $540,000 cash from his IOLTA accounts for payment of personal expenses; and by transferring money from his client account to the account of family members to make personal payments.
He was also ordered to pay restitution to his victims totaling $299,774.41. In a separate restitution matter, the court is expected to enter an order that Leach pay $320,622.76 to the IRS, representing taxes he failed to pay to the agency.
