Examples of Non-filer Investigations - Fiscal Year 2013

The following examples of non-filer investigations are written from public record documents on file in the court records in the judicial district in which the cases were prosecuted.

Nevada Attorney Sentenced for Tax Fraud
On December 17, 2012, in Las Vegas, Nev., Ian Christopherson, an attorney, was sentenced to 33 months in prison and ordered to pay $728,786 in restitution. On September 23, 2011, following a five day trial, Christopherson was convicted of two counts of income tax evasion for his federal individual income taxes and for federal employment taxes. According to the evidence presented at trial, from 1994 through 1998, Christopherson ran a small law firm that employed up to nine individuals. He withheld taxes from each of his employees during these years, but did not timely file employment tax returns or his own individual income tax returns. In December 1998, the defendant filed more than 30 delinquent tax returns without making a single payment, even though he owed the federal government a total of $175,685 in federal taxes. Additionally, Christopherson spent five years engaged in stalling and diversionary tactics with the IRS. Christopherson submitted incomplete Offers in Compromise (OIC) for consideration, only to withdraw them later. He failed to disclose significant assets in the OIC, including up to $250,000. He also misrepresented his efforts to file other back tax returns as required by the IRS. The evidence at trial further showed that in August 2002, Christopherson set up a nominee account in the state of Montana in order to conceal his assets from further collection efforts by the IRS. Christopherson made use of a bank account under the name of “Industrial Consultants,” a company owned by friends, which was opened solely for the purpose of assisting Christopherson in evading his taxes. Over the next five years, Christopherson used this nominee account as his own - depositing checks from clients, transferring money from his client trust account, and writing checks for personal and business expenses. The total tax loss, including penalties and interest, is $728,786.

Former Mortgage Company Owner Sentenced on Tax Charges
On December 17, 2012, in Honolulu, Hawaii, Michael Eric Stewart, a former Maui County resident, was sentenced to 24 months in prison and ordered to pay $476,265 in restitution to the IRS. According to court documents, Stewart, owner and operator of Infinity Mortgage on Maui, earned income from soliciting mortgage loans from 2001 to 2006. He did not file tax returns from 1997 through 2006. Stewart transferred income earned through his mortgage business into the bank account of a nominee entity he established in Nevada. From 2001 to 2006, Stewart transferred $788,000 into the Nevada entity’s bank account, eventually transferring over $345,000 into his Hawaii bank account, from which he wrote checks totaling $280,000 payable to himself or cash.

Financial Advisor Sentenced for Attempting to Evade the Payment of Taxes
On December 14, 2012, in Buffalo, N.Y., Eric J. Justin, of Lancaster, N.Y., was sentenced to 12 months in prison and ordered to pay $216,295 in restitution. Justin was convicted of attempting to evade and defeat the payment of taxes. According to court documents, between April 15, 2002 and October 13, 2010, Justin redirected income to his wife as a nominee to hide his business interests, real estate, and personal car. In addition, Justin failed to use any typical record-keeping or accounting method, failed to differentiate personal and business bank accounts and transferred funds between various personal and business accounts. In addition, Justin failed to disclose to the IRS, or his accountant, the receipt of more than $98,000 in life insurance proceeds. The defendant also falsely claimed to the IRS that his real property was encumbered in order to deflate his asset equity numbers.

Insurance Broker Sentenced for Failing to Pay Taxes and Making Illegal Donations to Federal Campaign
On December 11, 2012, in Newark, N.J., Joseph Bigica, an insurance broker, was sentenced to 60 months in prison, three years of supervised release and ordered to pay $2.1 million, plus interest, in restitution. Bigica, of Franklin Lakes, N.J., pleaded guilty to an Information charging him with one count of corruptly interfering with the due administration of the Internal Revenue laws and one count of conspiring to violate the Federal Election Campaign Act (FECA). According to court documents and statements made in court, from January 2000 to September 2011, Bigica was employed as an insurance broker through his companies Joseph Bigica Inc. and Joseph Bigica LLC. Bigica. He failed to file timely tax returns for calendar years 1999 through 2006, or pay his taxes when they were due. Bigica admitted that from April 2000 to September 2011, he took steps to conceal his income and assets from the IRS, using bank accounts in the names of companies he controlled and in the name of his spouse, using a credit card in the name of an employee and her husband, and making extensive use of a Jersey City, N.J., check cashing business. The check casher handled approximately 241 checks totaling more than $2.5 million payable to Bigica, companies with which he was affiliated, and others. In addition, Bigica admitted that between April 2005 and May 2009, he conspired with others to make approximately $98,600 in illegal contributions to the campaign committee of a federal candidate. He used 19 straw donors whom Bigica then reimbursed using checks drawn on accounts in the name of his spouse or companies he controlled.

Former Basketball Program Supervisor Sentenced for Identity Theft and Tax Evasion
On December 10, 2012, in Manhattan, N.Y., Peter Iulo, a former referee and basketball program supervisor at Chelsea Piers Management, Inc., was sentenced to 24 months in prison, three years of supervised release and ordered to pay $200,000 in restitution to the IRS. Iulo pleaded guilty in June 2012 to one count of conspiracy to defraud the United States, one count of conspiracy to commit identity theft, and four counts of tax evasion. According to court documents and statements made in court, from 1996 through 2008, Iulo worked as a referee for Chelsea Piers’ adult basketball leagues. Chelsea Piers is a sports and entertainment complex in Manhattan where various adult basketball leagues play their games. Referees for the basketball games are paid approximately $40 per game by Chelsea Piers. In any year in which a referee is paid more than $600, Chelsea Piers must report the income to the IRS. Iulo and others participated in a massive identity theft and tax evasion scheme that used stolen identification information to ensure that dozens of referees were rarely, if ever, paid more than $600 per year in their own names. As part of the scheme, Iulo provided Chelsea Piers with false IRS forms that contained the stolen identification information. When Chelsea Piers issued checks payable to the names of the stolen identities, Iulo and other referees who received these checks, endorsed, and then cashed or deposited them. Iulo used numerous identities, including New York City police officers and firefighters who had acted as referees in the past. As a result of the scheme, Iulo avoided having Chelsea Piers report the income he was paid to the IRS, and thereby avoided paying taxes on that income. In addition, Iulo facilitated identity theft and tax evasion by dozens of referees at Chelsea Piers. Iulo also failed to file federal income tax returns between 2005 and 2008.

Pennsylvania Man Sentenced for Failure to Pay Taxes
On November 27, 2012, in Pittsburgh, Pa., Louis Lamanna, of Oakmont, Pa., was sentenced to 12 months and three days in prison and three years of supervised release on his conviction of three counts of willful failure to pay taxes. According to information presented to the court, Lamanna willfully failed to pay federal income taxes for tax years 2006, 2007 and 2008, resulting in a total tax loss of $925,145. Instead of paying his tax debt, Lamanna spent substantial sums of money on luxury items to support an extravagant lifestyle.

Maryland Contractor Sentenced for Tax Evasion
On November 27, 2012, in Baltimore, Md.. Randy Benjamin Wells, of Reisterstown, Maryland, was sentenced to 13 months in prison and three years of supervised release for tax evasion. Wells was also ordered to pay restitution of $349,588. Wells paid $74,404 to the IRS prior to sentencing. According to his guilty plea, from 2005 through 2009, Wells operated Wells Contracting and Demolition Company, Inc., Triple R Contractors, Inc., and Gryphon Contracting, Inc. Although Wells hired a tax preparer to prepare his individual tax returns for 2005 through 2009, Wells failed to file the income tax return with the IRS resulting in approximately $196,200 in taxes owed. Wells used several methods in an effort to conceal his income such as purchasing personal items using funds held in a company account.  During this same time, Wells failed to pay employment taxes for the employees working for his companies. The tax loss as a result of Wells’ actions resulted in a total of $227,792 in employment taxes owed.

Rhode Island Couple Sentenced for Filing False Tax Returns and Conspiracy to Defraud the United States
On November 27, 2012, in Boston, Mass., Gail Thorick, of West Warwick, R.I., was sentenced to seven months in prison, 17 months of supervised release with seven months of that time to be served in home confinement, and ordered to pay $595,000 in restitution. Myron Thorick, of West Warick, R.I., was sentenced to two years probation with the first 12 months to be served in home confinement and ordered to pay $595,000 in restitution. On December 9, 2011, The Thoricks pleaded guilty to conspiring to defraud the United States and filing false tax returns. According to court documents, the Thoricks participated in a “underground warehouse banking” conspiracy. Gail Thorick helped run the day-to-day operations, including the bookkeeping and depositing of checks into bank accounts in nominee names such as “Calico” that helped clients of the scheme conceal income from the IRS. Myron Thorick helped cash hundreds of thousands of dollars in checks to further conceal client income and assets from the IRS. The Thoricks also falsified their own tax returns for the tax years 2003 through 2005.

California Man Sentenced for Tax Evasion
On November 20, 2012, in Oakland, Calif., Thomas Calise was sentenced to 21 months in prison and ordered to pay $493,887 in restitution. On May 11, 2012, Calise pleaded guilty to tax evasion. According to the plea agreement, Calise admitted that starting in 2004 he was employed with Fidelity Capital Funding where he was paid based on commission. During that period, Calise asked his employer to pay his commissions for 2004 and 2005 to his spouse. Calise admitted that he intentionally failed to report the income he earned from Fidelity Capital Funding to the IRS. Then in 2006 and 2007, Calise asked his employer to issue and pay his salary and commissions to a company that he controlled, TC Financial, rather than to himself. Calise also intentionally failed to report the income he diverted to TC Financial during 2006 and 2007.  For tax years 2004 through 2007, Calise owed approximately $493,887 in additional tax.

Massachusetts Man Sentenced for Tax Evasion and Conspiracy to Defraud the United States
On November 15, 2012, in Boston, Mass., Kenneth Scott Alcock was sentenced to 12 months and a day in prison and ordered to pay $201,000 in restitution. Alcock pleaded guilty on January 24, 2012 to charges of tax evasion and conspiracy to defraud the United States. According to court documents, between 2001 and 2004, Alcock conspired with his brother, Gary Alcock, to set up and implement the banking and nominee services of Scott Dion and Catherine Floyd. Gary Alcock owned and operated a trash hauling business called G&K Trucking, as well as a landscaping business called Bark, Mulch, and Loam. The Alcocks set up a nominee company called “Alex Management” to divert and hide business receipts, to help Gary Alcock’s businesses fraudulently “disappear” on paper and to evade IRS assessments and IRS collection activity. The Alcock brothers further conspired to use the services of Contract America, run by Charles Adams, Dion and Floyd, in order to pay Gary Alcock’s employees “under the table” without withholding and paying over Social Security, Medicare and income taxes. On April 2, 2012, a jury convicted Adams, Floyd, and Dion of conspiring to defraud the IRS by promoting an “under the table” payroll scheme doing business as Contract America. Dion and Floyd were also convicted for conspiracy to defraud the IRS through the use of an “underground warehouse banking” scheme designed to conceal customer income and assets from the IRS. In addition, Kenneth Alcock evaded his own taxes by using the nominee and warehouse banking services of Dion and Floyd. Previously sentenced in this scheme were Dion to 84 months in prison, Floyd to 60 months in prison, Adams to 48 months in prison and Gary Alcock to 14 months in prison.

Former FedEx Pilot Sentenced for Tax Evasion
On November 13, 2012 in Memphis, Tenn., William Boyer, of Cordova, Tenn., was sentenced to 33 months in prison, three years of supervised release and ordered to pay $497,789 in restitution to the IRS. Boyer was convicted in October 2011 on five counts of tax evasion.  According to court documents, for 2001 through 2005, Boyer was employed as a pilot for FedEx. He failed to file income tax returns, attempted to conceal over $977,000 in income, and filed false W-4 forms.

Texas Businessmen Sentenced for Failing to File Tax Return
On October 25, 2012, in Fort Worth, Texas, Richard Tilford was sentenced to 12 months in prison and ordered to pay $453,547 in restitution to the IRS. Tilford pleaded guilty in July 2012 to failing to file a federal income tax return. According to court documents, Tilford was a self-employed insurance agent. Between 1998 and 2006, he earned more than $1.1 million in sales commissions. Tilford failed to file tax returns for tax years 1998 through 2003.  In 2004, Tilford hired Phillip Ballard to act on his behalf and file frivolous tax returns for 1998 through 2002. Each return indicated that Tilford had zero income and owed no taxes. Each of the tax returns was accompanied by a letter acknowledging that Tilford earned money during the relevant year, but denied that the earnings were income in the “constitutional sense.”  On October 15, 2012, Bartlett M. Smith, aka David L. Burns, was sentenced to 12 months in prison.  He pleaded guilty in April 2012 to failing to file a federal income tax return. Smith operated a drywall construction business. He also followed the advice of Phillip Ballard in attempting to eliminate his federal income taxes. Smith, or Ballard acting on behalf of Smith, used several different methods in an attempt to avoid income taxes, including using a false employer identification number, establishing a fake church and establishing a shell trust and shell corporations. In addition, on behalf of Smith and with Smith’s knowledge, Ballard submitted “zero returns” to the IRS for tax years 1999 through 2004. In addition, for calendar year 2005, Smith willfully failed to file a personal income tax return, despite his drywall business having gross receipts of $1,737,458, and a profit, after expenses, of at least $56,000.

Massachusetts Businessman Sentenced for Tax Evasion and Conspiracy to Obstruct and Impede the IRS
On October 17, 2012, in Boston, Mass., Gary Alcock, of Westborough, Mass., was sentenced to 14 months in prison and ordered to pay $515,518 in restitution. Alcock pleaded guilty on December 9, 2011, to charges of tax evasion, conspiring to defraud the United States and willfully failing to file tax returns. On April 2, 2012, Charles Adams, Catherine Floyd and William Scott Dion were convicted by a jury of conspiracy to defraud the IRS by promoting an “under the table” payroll scheme doing business as Contract America. Dion and Floyd were also convicted for conspiracy to defraud the IRS through the use of an “underground warehouse banking” scheme designed to conceal subscriber income and assets from the IRS. According to information presented in court, Alcock owned and operated a trash hauling business called G&K Trucking, as well as a landscaping business called Bark, Mulch and Loam. Between 2001 and 2004, Alcock set up a nominee company called “Alex Management” to divert and hide business receipts and help his businesses fraudulently “disappear” on paper to evade IRS assessments and collection activity. Alcock also used Contract America to pay his employees “under the table” without withholding or paying Social Security, Medicare and income taxes. Dion was previously sentenced to 84 months in prison, Floyd to 60 months in prison, and Adams to 48 months.   

Ohio Insurance Salesman Sentenced for Tax Evasion
On October 16, 2012, in Akron, Ohio, William A. Herder, of Richland County, Ohio, was sentenced to 37 months in prison for tax crimes. Herder was convicted by a jury on May 21, 2012, on one count of tax evasion, one count of corruptly endeavoring to obstruct the administration of the Internal Revenue laws and five counts of willful failure to file tax returns. According to the evidence at trial, Herder sold insurance for Aflac Inc. Despite earning substantial income from insurance sales, Herder failed to file timely and valid tax returns. For  2000, Herder filed a tax return on which he falsely claimed that he had not earned any income. Subsequently, Herder failed to file any tax returns for 2001 through 2009. In addition, Herder attempted to conceal his assets from the IRS. In 2003, he transferred title to his house to a bogus foundation he established in Utah called “The Mentor Foundation.” Herder also cashed out an Individual Retirement Account and a life insurance policy, converted large amounts of cash to silver coins, and paid personal and business expenses with cash and money orders, all in an effort to prevent the IRS from collecting his unpaid taxes. According to trial evidence, Herder submitted numerous obstructive letters and documents to the IRS in an effort to prevent the IRS from assessing and collecting his taxes. In these letters, Herder falsely claimed, among other things, that the tax laws were not applicable to him.

Wisconsin Man Sentenced for Tax Evasion
On October 2, 2012, in Milwaukee, Wis., James A. Stuart, of Hartland, Wisconsin, was sentenced to 33 months in prison and ordered to pay a $6,000 fine.  Stuart was convicted of three counts of tax evasion after a jury trial on December 9, 2011. Formerly the president and majority owner of New Age Chemical, Stuart was convicted of attempting to evade federal income taxes he owed for years 2005 through 2007. According to evidence introduced at trial, Stuart filed a 2005 tax return in which he claimed income of only $631 and that he owed no taxes. He did not file tax returns for 2006 or 2007. During these years, however, Stuart actually received more than $900,000 in income and owed more than $220,000 in federal income taxes. Instead of filing tax returns and paying his taxes, Stuart sent numerous letters to the IRS and other government officials in which he made a variety of claims, including that his earnings were not taxable wages, he had no social security number, he had loaned his consciousness to a trust entity, the IRS had no jurisdiction, and he was not a U.S. citizen.

Fiscal Year 2012 - Non-filer Investigations

Fiscal Year 2011 - Non-filer Investigations

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