Not Paying Withholding taxes to the IRS is Tax Evasion – Kim Jenkins Brandveen plead guilty – faces Prison sentence

RICHMOND, Va. – Kim Jenkins Brandveen, 50, of Petersburg, Va., pleaded guilty today to tax evasion as part of a multi-year scheme involving various durable medical supply companies she owned.

Neil H. MacBride, United States Attorney for the Eastern District of Virginia, and Jeannine Hammett, Acting Special Agent in Charge of the Internal Revenue Service Criminal Investigation’s Washington, D.C., Field Office, made the announcement after the plea was accepted by United States District Judge Henry E. Hudson.

Brandveen was indicted on June 7, 2011 and today pled guilty to one count of tax evasion.  Brandveen faces a maximum penalty of five years in prison when she is sentenced on November 18, 2011.

In a statement of facts filed with her plea agreement, Brandveen admitted being the owner of Healthcare Solutions Medical Supply, LLC, which sold durable medical equipment and provided home health services.  Brandveen directed the withholding of federal employment taxes from the paychecks of that business’s employees, but regularly and systematically failed to pay those taxes over to the IRS, instead using those funds for other business ventures and personal expenses.

When the IRS undertook collection efforts, Brandveen ceased operation of that business and abandoned its bank accounts.  She then created a new business, Healthcare Solutions Service Corporation, a virtually identical business performing largely the same functions from the same location with the same employees.  That business also failed to pay over employees’ withheld employment taxes to the IRS, again using them for Brandveen’s other business ventures and personal expenses.  When the IRS undertook to hold Brandveen personally responsible for the failure to pay the employment taxes, she misled the IRS by falsely asserting that a relative was actually the party responsible for paying those taxes.

Don’t mess with the IRS – Tuscon restaurant owner Mary Martino guilty of tax issues…

Operating a restaurant…and diverting monies to personal use…and not filing returns – that’s a recipe for disaster.

Mary Brooke Martino, 61, of Tucson, pleaded guilty on Thursday in federal district court to willfully subscribing and filing a false 2004 Individual Income Tax Return. Martino was charged with willful subscription and filing of a false tax return prior to her plea.

Mary Brooke Martino is married to Anthony Martino, 63, also of Tucson. They are the owners and operators of Anthony’s in the Catalinas, a restaurant which is a C corporation and incorporated under the name A.M. Restaurant Corporation. Mary Martino was primarily responsible for office operations of the restaurant. Anthony Martino was primarily responsible for restaurant and catering operations. From 2002 through 2006, the Martinos diverted at least $100,000 from the financial accounts maintained by the restaurant for their personal use during each year. On the books and records of the corporation, the diverted monies were classified as either business expenses or loans to shareholders. The couple had federal corporate income tax returns, Forms 1120, prepared for 2002 through 2005, but did not file the 2003 return. The other returns were filed late. The defendant and her spouse did not timely file federal individual income tax returns for 2002 through 2006 until after being contacted by Special Agents of the Internal Revenue Service, Criminal Investigation, on February 22, 2008.  On March 3, 2008, the defendant and her spouse then filed hand-written Forms 1040EZ which only reported gambling winnings, and no other income for either the defendant or her spouse for any of the five tax years, whether from the operation of Anthony’s in the Catalina’s or other sources. The government contends that the tax loss is more than $200,000 but not more than $400,000. The defendant contended that the applicable tax loss is more than $80,000 but not more than $200,000.

A conviction for willful subscription and filing of a false tax return carries a maximum penalty of three years in prison, a $250,000 fine or both. Sentencing is set before Judge David C. Bury on October 19. 2011.

You can’t hide from the IRS! Eliseo Roquiz, an anesthesiologist, pleads guilty to filing a false document with IRS… Perhaps he’ll meet Wesley Snipes in prison…?

Don’t mess with the IRS…it really isn’t worth it.  Wesley Snipes tried and look where it got him – 3 years in federal prison.  How’s that for putting a career on hold.

Eliseo Roquiz of Erie, Penn., pleaded guilty before U.S. District Judge Sean J. McLaughlin of the Western District of Pennsylvania to charges of filing a false document with the Internal Revenue Service (IRS), the Justice Department and IRS announced.

According to court documents and statements made in court, Dr. Roquiz, an anesthesiologist, used multiple tax fraud promoters to prevent the IRS from assessing and collecting his income taxes. In 1998, Dr. Roquiz established two sham trusts with the assistance of a California-based organization called National Trust Service and paid an affiliate of National Trust Service to prepare false individual and trust tax returns for him for the years 1998, 1999 and 2000. As part of the fraud, Dr. Roquiz had medical providers pay fees for his services to the sham trusts and then claimed false deductions on the trust returns to reduce the taxes on the income to zero.  Dr. Roquiz also opened bank accounts in the name of the sham trusts and transferred title to his personal residence to one of the trusts.

According to court documents and statements made in court, in 2003, after the IRS began to audit his tax returns, Dr. Roquiz hired American Rights Litigators/Guiding Light of God Ministries (ARL/GLGM), an organization located in Florida that sold abusive tax schemes, to send obstructive and frivolous correspondence to the IRS in response to notices that the IRS sent to Dr. Roquiz. After ARL/GLGM was permanently enjoined in February 2004, Dr. Roquiz hired a third fraud promoter, Joseph Saladino, to file frivolous amended U.S. Individual Income Tax Returns (IRS Forms 1040X) for the years 2000 and 2001

According to public documents and statements, Dr. Roquiz’s efforts to disrupt IRS collection activities culminated with the submission of three false Collection Information Statements for Wage Earners and Self-Employed Individuals (IRS Forms 433-A) between January and June 2005.  All three Forms 433-A, which Dr. Roquiz signed under penalties of perjury, were materially false in that Dr. Roquiz failed to disclose that he had transferred his personal residence to his sham trust and that he was a party to a lawsuit.  The second and third Forms 433-A, which Dr. Roquiz submitted in May and June of 2005, were also materially false in that Dr. Roquiz failed to disclose the existence of a bank account that he opened in the name on an LLC he had established in New Mexico.

As part of the plea agreement, the parties agreed that the tax loss associated with Dr. Roquiz’s conduct was $342,361.11 plus interest.

The charge against Dr. Roquiz carries a maximum sentence of up to three years in prison.  Sentencing is set for Nov. 15, 2011.

Perhaps Dr. Roquiz will meet Wesley…

YOUR COMMENTS ARE WELCOME!

Self-taught Tax Return Preparer – Tomeka Winberly – Convicted of Preparation of Fraudulent Tax Returns

A federal jury in Miami returned guilty verdicts against Tomeka Wimberly on twenty-four counts of aiding and assisting in the preparation of fraudulent income tax returns.

The evidence at trial revealed that Wimberly was a “self-taught” tax preparer who prepared thousands of false tax returns between 2004 and 2005 which resulted in her clients receiving thousands of dollars in bogus refunds. The false returns reported fictitious and/or inflated deductions for un-reimbursed employee business expenses, charitable contributions, mortgage interest, and investment deductions, as well as false education, child care, and child and dependent expenses. During her first year in business, Wimberly prepared over 700 tax returns and obtained more than $2 million in refunds. By 2006, Wimberly prepared more than 1000 tax returns and obtained more than $4 million in refunds.

Wimberly faces a maximum sentence of up to 72 years’ imprisonment and a maximum fine of up to $2.4 million dollars. Sentencing is scheduled for September 20, 2011, before United States District Court Judge Paul C. Huck.

YOUR COMMENTS ARE WELCOME!

Snipes worried about Prison – looking for Supreme Court Relief! What will prison be like for Wesley?

Appearing on Larry King Live – Wesley Snipes took his argument to stay out of prison to the public stating that he was hopeful that the system of justice will smile in his direction if (and that’s a big if) the Supreme Court hear his appeal.  Will they?  DOUBTFUL.

“We still have prayers out there. We still believe in miracles. So don’t send me up the river yet,” Snipes said in an interview on Larry King Live last night.  Tomorrow he will report to Federal Prison in PA and begin what will be a life changing event for him – over 30 months of confinement in federal prison.

Snipes’ avoided felony charges in his tax trial, but was convicted of misdemeanors for not filing tax returns in 1999, 2000 and 2001.

“I think any man would be nervous if his liberty is at stake,” Snipes said. “I’m disappointed that the system seems not to be working for me in this situation.”

According to Prosecutors, Snipes earned $40 million since 1999 but had filed no returns and had been involved in a tax resisters group.  The head of the tax resisters group was found guilty of felony tax evasion and is actively serving a prison sentence now.  Of course, instead of accepting responsibility, Snipes disputed such involvement and said that the failure to file was his advisers’ fault.

“This is another thing that has been misreported: It has been framed that I was a conspirator and that I was an architect in a scheme by an organization that has been characterized as tax protesters,” Snipes said. “The press hasn’t reported that I was a client of people who I trusted [who] had knowledge and expertise in the areas of tax law that would protect my interests.”

Personally, I think that Wesley is guilty of attempting to find innocence instead of stepping up or manning up and telling the truth.  Wesley isn’t stupid, he’s quite capable.  Yes, he was knee deep in the throws of believing that this tax protester group had something and that something was an argument that he’d avoid having to pay taxes on a substantial sum of money.

BIG WIN FOR THE IRS

Having face a few losses in this area – one especially from an attorney in Louisiana – the IRS could not afford to let Snipes go free.  He was far to public a figure and if Snipes won, many followers of the tax avoidance scheme would become followers and have a dramatic impact on undermining the system of tax compliance in this country.

According to a CNN article:

But prosecutors, in their sentencing recommendation, said the jurors’ decision “has been portrayed in the mainstream media as a ‘victory’ for Snipes. The troubling implication of such coverage for the millions of average citizens who are aware of this case is that the rich and famous Wesley Snipes has ‘gotten away with it.’ In the end the criminal conduct of Snipes must not be seen in such a light.”

Snipes suggested he was unfairly singled out by prosecutors.

“It does seem to be rather unusual and rather bizarre when you had a prosecutor come into the sentencing and say that this is the biggest tax trial in the history of the IRS,” Snipes said. “I think there is a certain amount of selectivity going on here.”

Honestly, the prosecutors were right.  If Snipes went free…all heck would break loose when it comes to tax compliance.

“There have been some egregious and very malicious efforts to report the facts of this case,” Snipes said. “I was never charged with tax evasion. I’ve never been a tax protester.”

Wesley come on…man up here big guy.  Accept the fact that you weren’t just relying on a reputable firm when you made the choices you did.  You were on the fringe – no where close to main stream when it came to your responsibilities as a US citizen.  And, you know above all, if the government could have convicted you on tax evasion they would have.  You got lucky.  Your only bad luck was being sentenced to prison for failure to file.  I admit – that is unusual – but I also understand.  If you’d filed and paid as you should have you’d be home with your family this Christmas…not in prison.

WHAT TO EXPECT IN PRISON

Those first steps in are tough.  You know as you walk through the door that life is about to change dramatically!

More than likely you’d be placed in a holding cell once you arrive.  You’ll be given a set of rules to read and while you sit there – potentially for hours, you’ll have time to think about what you’re facing.  You’ll think about what you’ve done that got you here and soon…you’ll come to grips with whether you still want to believe that you’re a victim or whether you’ll accept that your choices got you there.

When the keys jingle and the door opens to let you out…you’ll be seen (more than likely) by a physician’s assistant who will give you a TB test and soon thereafter you’ll be taken to the laundry where you’ll receive your prison uniform and bedding.  Once received you’ll walk holding your new clothing across the prison compound for all to see – a fresh new inmate – “Blade” behind bars – potentially a target.  As you step into your cell you’ll meet your cell mate and at that moment you become “one of them” – life will change.

YOUR COMMENTS ARE WELCOME

Wesley Snipes to report to PRISON! Still he seems to be fighting the already lost battle…

Appearing to be somewhat obstinate to the end, Wesley Snipes convicted for tax crimes is headed to prison – much like I predicted over two years ago.  Snipes is scheduled to report to Federal Correctional Institution McKean at Lewis Run, Pennsylvania on December 9.

The crime Wesley was convicted of was failing to file his tax returns – although he was honestly involved in a movement that believes that taxing income is unconstitutional and illegal.

Here’s the post that discusses Wesley’s conviction – https://chuckgallagher.wordpress.com/2008/04/24/wesley-snipes-sentenced-36-months-in-prison-for-failure-to-file-tax-returns/

A 36 month sentence means that Wesley will serve 30+ months in Federal Prison.

Snipes appealed his conviction, but lost.  After his defeat it was clear that prison was the practical outcome.  Now, having been there personally, I have the deepest empathy for Wesley.  Prison time moves slowly.  The one that that is true is that it will give Snipes a new perspective and opportunity for self-reflection.

Likewise, on a practical note, I guarantee he will file and pay his taxes moving forward.  I know many men who were imprisoned for tax crimes including not filing and paying their taxes.  All, when released, had given up the hope that somehow they could avoid the IRS or Federal Government.  Personally, I don’t care about the argument related to taxes – rather I care about my freedom.

About the Prison – FCI McKean, PA

McKean is a medium security facility housing male inmates.  An adjacent satellite prison camp houses minimum security male offenders.

FCI McKean is located in northwest Pennsylvania between Bradford and Kane, Pennsylvania.  It is situated 90 miles south of Buffalo, New York, off Route 59; and approximately 1/4 mile east of the intersection of State Route 59 and U.S. Route 219.

Here are some other links for those who are just now catching up with this story:

https://chuckgallagher.wordpress.com/2008/04/24/wesley-snipes-big-day-sentencing-he-asks-for-a-slap-on-the-wrist/

https://chuckgallagher.wordpress.com/2008/04/24/wesley-snipes-to-prison-big-win-for-irs-comments-by-white-collar-crime-speaker-chuck-gallagher/

https://chuckgallagher.wordpress.com/2010/01/11/tough-guy-wesley-snipes-fighting-to-say-out-of-prison-doubt-hell-win-that-battle/

https://chuckgallagher.wordpress.com/2010/03/15/wesley-snipes-not-worried-about-prison-me-thinks-he-should-be/

https://chuckgallagher.wordpress.com/2010/07/17/as-predicted-wesley-snipes-faces-prison-court-rejects-appeal/

So here’s a question for readers – Do you think that Wesley Snipes has been treated fairly?  And if not, what do you think should have happened?

YOUR COMMENTS ARE WELCOME!

Paul Pogue Prison sentencing set for August 27th… Outcome: Probation or Prison?

I know what it feels like on a day like today.  Much like Paul Pogue has done or is doing, I, too, walked up the steps into a federal courthouse, faced a judge and heard a verdict that was life changing.  I, too, like Paul Pogue had plead guilty to tax evasion.  Our circumstances were quite different, but the crime, in the eyes of the law, was the same.

Today – Paul Pogue – steps before a judge and finds out his sentence.

For more details my past post is here:  https://chuckgallagher.wordpress.com/2010/02/24/paul-pogue-texan-guilty-of-tax-evasion-it-is-that-time-of-year/

In my case the judge said – “18 months active and 3 years probation” – and with that the gavel fell and my life changed.

By the time this is posted, Paul has likely heard his sentence.  And, while I have no crystal ball, I would suspect from the reported crime and amount of tax evaded, Paul will receive a sentence much like mine.  I’d guess 12 to 18 months active with probation following as well as order to pay back taxes, interest and penalties.  Probation is possible, but based on the sentence in another Dallas tax evasion case where a 40 month sentence was issued, it will be interesting to see if the court is lenient on Mr. Pogue.

UPDATE:  JUDGMENT – PROBATION 3 YEARS

When the sentence is reported…I will update this blog for those who follow.  Meanwhile, the following should be noted:

• Good people can make bad choices and every choice has a consequence which can include Prison!
• We must face the consequences of our choices and we will either – from future choices become victims or victors!
• Paul and his family will need your support and kindness during this process which I bet is unfamiliar territory!
• We are not defined by our past choices, rather our future and the impact we have on others is defined by the choices we make today!

As always – YOUR COMMENTS ARE WELCOME

John Nicholas Sheets faces Prison and a $2.4 million fine for Tax Evasion. Business Ethics and the IRS

John Nicholas Sheets, a.k.a. “Nicky,” was sentenced by U.S. District Judge Jane J. Boyle to 40 months in prison and ordered to pay $2,408,662 in back taxes, announced U.S. Attorney James T. Jacks of the Northern District of Texas. Sheets pleaded guilty in March to one count of tax evasion.

As a business ethics and fraud prevention speaker, I can’t begin to tell you how many times, especially with the high profile case of Wesley Snipes, that I’ve warned folks to pay careful attention to the tax man.  Likewise, I can’t tell you how many times I’ve received emails, notes and even a DVD telling me I was crazy – that the tax law is unconstitutional.

Well…I DON’T CARE about the constitutionality of the tax law, facts are, if you don’t pay your taxes – YOU’LL GO TO PRISON.  And, having been there – (not that I’m proud of that – I am not) it (PRISON) is not fun.  Put bluntly, Nicky is not going to have a good time in Club Fed!

According to documents filed, Sheets is a licensed realtor who has worked in North Texas for several years. Since 1996, Sheets and his wife have successfully worked as real estate agents and have established multiple closely-held businesses including Eleanor Mowery Sheets, Inc.; Dallas EMS, LLC; and E-Residential, LLC.

According to court records, Eleanor Mowery Sheets pleaded guilty last month to four counts of failing to pay income taxes. Her sentencing is set for October 12, 2010.

In the filed documents, John Nicholas Sheets stipulates that he has substantial unpaid individual and corporate tax debts from 1997, 1998, 1999, 2001, 2005, 2006, 2007 and 2008 totaling approximately $2.7 million, including penalties and interest.

Now…I can understand a mistake or misapplication or interpretation of tax law – but, Sheets efforts go above and beyond misapplication or misinterpretation to blatant fraud.  Seems that Sheets was more concerned about his lifestyle than he was about the freedom that he had as an American to pursue his American dream.

I don’t know John Nicholas Sheets, but having lived in the Dallas area for some time, I would say that he would have been looked on in his community or circle of friends as an honest, ethical business man.  If I am wrong, I hope someone will kindly share an alternative view (COMMENTS ARE WELCOME).  Assuming that he was well respected, I have ONE QUESTION:  What do you think caused Sheets to stray so far from compliance with the tax law?

According to the US Attorney’s news release:

The documents further state that beginning in 1998, rather than pay his substantial tax debts, Sheets used various business entities to conceal the nature and extent of his assets. Sheets admitted to transacting personal business and paying personal creditors with these funds, rather than paying the Internal Revenue Service (IRS). Using these businesses, Sheets commingled funds to pay approximately $435,988 in mortgage interest to three lenders so that he and his wife could live in a home whose market value exceeded $1.3 million during that period. Sheets also stipulated that he used commingled funds to buy personal items (including an interest in a private airplane and vehicles) and pay numerous personal creditors.

Sheets further admitted that on April 5, 2006, he used a local check-cashing business to conceal the nature of his assets so as to avoid paying federal income taxes. Specifically, he took a $123,000 settlement check to the local check-cashing business to conceal the existence of the funds, and rather than deposit the check into his personal bank account for free, he paid more than $2000 to cash that check. None of the cash he obtained on this date was used to pay the IRS; he used the funds to pay for personal expenses and pay other creditors. The factual resume goes on to state that Sheets negotiated the check in this manner upon the advice, recommendation and suggestion of his attorney at the time.

Sheets wife (pictured above), like her husband, faces a sentence for tax evasion.  The conviction of spouses in tax crimes is becoming more common and a BIG WARNING SIGN should be out to all – that when you sign your return you should know what you’re signing, as evasion issues don’t typically rest with one party in a “married filing jointly” return.

If you know Mr. Sheets or have insight into his motives, please feel free to comment.

Wesley Snipes fighting to avoid Prison!

Convicted by obvious choices and now facing prison, Wesley Snipes – through his attorneys – are attempting one last legal maneuver.  But first, here’s a prior link that identifies Snipes actions and choices related to his tax issues.

https://chuckgallagher.wordpress.com/2008/04/15/wesley-snipes-this-is-taxing-my-brain-what-did-he-do-exactly/

According to the Associated Press:

Attorneys for Wesley Snipes say they want to question jurors who convicted the actor of tax-related charges to determine whether any had made up their minds about his guilt before trial.

The motion filed Friday in Florida federal court says that an unnamed juror sent Snipes’ attorney Daniel Meachum an e-mail claiming that three other jurors had presumed Snipe’s guilt.

The motion says that would violate Snipes’ constitutional right to a fair trial.

Snipes was convicted in 2008 of three misdemeanor counts of willful failure to file his income tax returns. The 47-year-old is free on an appeals bond. However, federal prosecutors in Florida have asked a judge to revoke the bond and order Snipes to begin serving a three-year sentence.

I’ve asked myself as I write this – if I were a juror would I have a preconceived notion of guilt or innocence?  Yes.  How could I not considering that Snipes didn’t file returns.  The other issues…well that’s debatable, but failure to file.  That’s irrefutable.  Next!

As predicted – Wesley Snipes faces PRISON! Court rejects appeal…

Every choice has a consequence and Wesley’s choices have landed him in prison.  Do I think the sentence is a bit harsh?  Yes.  But, Snipes did more – much more – than just fail to file returns.  Rather, Snipes elected through his choices to challenge the federal tax system.  HE LOST!

There is a message here.  Whether you believe in the system or not, if you challenge the system and don’t play by the rules – YOU WILL GO TO PRISON.  I know…I was there partially for a tax crime.

For more background on this story see these entries:

https://chuckgallagher.wordpress.com/2010/06/02/screwed-by-kenneth-starr-wesley-snipes-might-find-an-unexpected-benefit-from-his-loss-no-prison-time/

https://chuckgallagher.wordpress.com/2010/03/15/wesley-snipes-not-worried-about-prison-me-thinks-he-should-be/

https://chuckgallagher.wordpress.com/2010/01/18/nicolas-cage-vs-wesley-snipes-both-ran-afoul-of-the-irs-different-approaches-different-results/

https://chuckgallagher.wordpress.com/2010/01/11/tough-guy-wesley-snipes-fighting-to-say-out-of-prison-doubt-hell-win-that-battle/

Candidly it would have been a miracle for the courts to have come back with any other verdict.  A recent story on CNN is quoted as saying:

Federal prosecutors said Snipes for nearly a decade escaped paying more than $15 million in income tax returns by sending money to overseas accounts, though they acknowledged in court that the amount was in dispute.

Before the sentencing in 2008, the actor asked the court to show mercy and offered three checks totaling $5 million as a gesture of good will.

Federal prosecutors diverted the checks to the U.S. Treasury, which accepted the payment — but it wasn’t enough.

“It’s essentially a down payment, but a fraction of what he owes,” Assistant U.S. Attorney Scotland Morris said at the time.

WHAT’S NEXT?

Snipes, now that the appeals courts has ruled, will be given a report date and location.  Likely, he will be sentenced to a minimum security prison and will soon find out that – even at a minimum security place – prison is still prison.  For those who call it “Club Fed” I would challenge you to try it.  Frankly, it sucks.

Snipes will be a celebrity behind prison walls, but soon will be treated like anyone else.  He is, after all, an actor.  His “tough guy” image is just an image and he will quickly learn that there are others who would easily take advantage of him.  Best advice…stay to himself and learn humility.

When location and time in announced…it will be reported.  Meanwhile, YOUR COMMENTS ARE WELCOME.