Leroy M. Bennett – Tax Protester ‘volunteered out’ – Sentenced “IN” to Federal Prison – You Can’t Beat The Tax Man!

Here’s a man who worked all his life, retiring with 30 years service to General Electric, somehow deciding that he could just “volunteer out” of the federal tax system. He did and now that choice is costing him his freedom.

Something changed. My guess is that he somehow became influenced by all of those who claim that the federal income tax is unconstitutional – there is no law establishing it’s existence – and so on. The same “bull” that Wesley Snipes found himself caught up in. Look for my prior blogs on the subject and see the comments – I am still amazed that folks fall for that “BS”! But, alas, Bennett did. He stopped filing tax returns in 1995 although he had income from wages and pensions from GE.

His defense – Bennett believed that he had “volunteered out” of the federal tax system, and Bennett also raised various additional, and frivolous, tax protestor arguments. NOTE: These only get you a prison sentence!

OUTCOME: Bennett is sentenced to 21 months in federal prison. At age 64, this is not likely how Bennett planned on spending his retirement.

Your comments are welcome! And by the way, if you’re going to comment on the tax protestor side, have the guts to elect not to file yourself and oh, publish your name for the IRS to find – only then will you be real in your beliefs. Otherwise, it’s just hot air that takes you no where but prison. Believe me I know – I’ve been there.

White Collar Crime Speaker – Chuck Gallagher - signing off

National Century Financial Enterprises Executives – GUILTY – in $3 Billion Securities Fraud Scheme!

It is true – every choice has a consequence! That statement holds true in every choice you make in life. Just like gravity, you can’t avoid the consequences of choices that you make. Now, don’t misread that statement – consequences don’t alway mean “bad” – they are just consequences. Your choices can create – Negative Consequences or Positive Results. By your choices you decide.

The Columbus Dispatch reported that after a day and a half of deliberation, the jury of eight women and four men came back with a determination of “guilty” for every one of the 40 charges against two of the Dublin company’s founders and three of its former executives.

In the case of Donald H. Ayers, age 71, of Fort Meyers, Florida – Rebecca S. Parrett, age 59, of Carefree, Arizona – Randolph H. Speer, age 58, of Peachtree City, Georgia – Roger S. Faulkenberry, age 46, of Dublin, Ohio – and James E. Dierker, age 40, or Powell, Ohio – the choices they made as officers of National Century Financial Enterprises have yielded what will be a certain unpleasant consequence – likely time in federal prison.

Based on charges of conspiracy, fraud and money laundering, the jury returned the guilty verdict on all charges contained in a 27-count superseding indictment stemming from a scheme to deceive investors about the financial health of NCFE. The company, which was based in Dublin, Ohio, was one of the largest healthcare finance companies in the United States until it filed for bankruptcy in November 2002.

“This case is one of the largest corporate fraud investigations involving a privately held company headquartered in small town America,” said Assistant Director Kenneth W. Kaiser of the FBI Criminal Investigative Division. “The FBI continues to leverage its corporate fraud expertise gained through large-scale investigations such as Enron and WorldCom, to ensure that corporations represent their true health. From Dublin, Ohio, to Houston, Texas to New York, New York, the message is clear that the FBI will not stand by as corporate executives manipulate their financial statements and conceal illegal activities from criminal and regulatory authorities.”

According the the news release from the US Attorney’s office:

The government presented evidence that the defendants engaged in a scheme to deceive investors and rating agencies about the financial health of NCFE and how investor monies would be used. Between May 1998 and May 2001, NCFE sold notes to investors with an aggregate value of $4.4 billion, which evidence presented at trial showed were worth approximately six cents on the dollar at the time of NCFE’s bankruptcy in November 2002.

NCFE presented a business model to investors and rating agencies that called for NCFE to purchase high-quality accounts receivable from healthcare providers using money NCFE obtained through the sale of asset-backed notes to institutional investors. The evidence at trial showed that NCFE advanced money to health care providers without receipt of the requisite accounts receivable, oftentimes to healthcare providers that were owned in whole or in part by the defendants. The evidence further showed that the defendants lied to investors and rating agencies in order to cover up this fraud.

Small hospitals, nursing homes and other health care providers sold their accounts receivable to the company, usually getting 80 or 90 cents on the dollar, rather than waiting for insurance payments. National Century then collected the full amount of the payments.

The evidence at trial showed that NCFE concealed from investors the shortfalls produced by this fraud by moving money back and forth between accounts, fabricating data in investor reports, incorporating false information into the accounting system, and making other false statements to investors and rating agencies. Moreover, the defendants’ compensation was tied to the amount of money they advanced to healthcare providers and those providers’ outstanding balance owed to NCFE. The government presented evidence at trial that showed that the defendants knew that the business model NCFE presented to the investing public differed drastically from the way NCFE did business within its own walls and that NCFE was making up the information contained in monthly investor reports to make it appear as though NCFE was in compliance with its own governing documents.

“These convictions send a clear message to corporate America that executives will be brought to justice for lying to investors and misrepresenting the actions taken in their normal course of business,” said Deputy Attorney General Mark Filip, chairman of the President’s Corporate Fraud Task Force. “These are the latest successes in our efforts to improve the integrity of our financial markets.”

“By holding accountable those who break the law, today’s convictions help restore some of the faith and trust the public loses every time corporate executives defraud their investors. The jury’s verdict demonstrates that the public will not stand by while company executives commit billion dollar frauds, leaving the honest investors to bear the losses they create,” said Assistant Attorney General Alice S. Fisher.

Facing millions of dollars in fines and up to 140 years in prison, the corporate officers found guilty here will have time to reflect on the choices they made and the consequences that follow.

White Collar Crime and Business Ethics Speaker – Today, I speak to groups nationwide about Choices and Consequences. Do your employees make the best choices for your company—or for themselves? Are you ready for some straight talk about success, choices, and ethics from a business executive who lost it all…and gained more than he could ever imagine?

In an unusually vulnerable style, I explore the decisions we make through the veil of honesty, integrity, and ethics. Your audience will be touched by this personal story and poignant lessons. Having been where the guilty executives above are going, I know first hand the pain caused by poor choices and practical ways to avoid making poor choices.

For information about my presentations, visit my website – www.chuckgallagher.com

Your comments on this blog are welcome!