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

August 10, 2011

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.


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

December 8, 2010

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


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

August 27, 2010

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

August 27, 2010

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 – Prosecutor says Go to Prison Now!

July 22, 2010

Free on bond pending his appeal…now the Prosecutor wants Wesley Snipes (who LOST that appeal) in the “big house” and NOW!

Last Friday July 16, officials in an Atlanta, Georgia appeals court upheld a judge’s decision to put Snipes behind bars for three years on federal tax charges.

No date for the Blade star’s surrender was discussed and the correctional facility where Snipes, who has been free on bail pending the outcome of the appeal, would serve his time hasn’t been revealed. Yesterday – Wednesday, July 21, prosecutors filed a motion opposing Snipes’ bail, stating, “There is no good reason to delay his surrender”.

The star’s attorney, Daniel Meachum, insists he will respond to the filed documents soon. A jury originally convicted Snipes on three misdemeanor counts of willful failure to file his income tax returns in 2008.

REALITY CHECK

Regardless of whether you feel that Snipes was treated fairly or not, he is going to prison.  And, from personal experience (I’ve been there – although not proud of it), I can say he won’t have fun.  But, I can’t see what the rush is all about.  As a matter of personal example, I was sentenced to a prison sentence in June of 1995 and ordered to report in October of 2005.  Snipes is not a flight risk, so the only reason for a rush is the Prosecutors impatience.

So…let me say to the Prosecutor – YOU WON…Give it a rest…let the system work.  Snipes will be incarcerated soon enough.  Don’t be greedy!

To everyone else…this BS about the tax system not being legal.  Bad argument and you will lose as well.  Prison sucks…so pay your taxes and enjoy life…cause life outside of prison is better than life in prison!

YOUR COMMENTS ARE WELCOME.


Wesley Snipes tax appeal not worried about Prison – Me thinks he should be…

March 15, 2010

Starpulse reports Wesley Snipes is confident an appeals judge will overturn his conviction and sentence on federal tax charges, insisting he’s “not worried” about the case.  The Blade star was sentenced to three years in prison in 2008 after being found guilty of three misdemeanor counts of willful failure to file his income tax return.

NOT WORRIED…  Well, hate to share with Mr. Snipes, but the only way the IRS and Federal Government can cause folks file their tax returns and be (somewhat) honest in doing it is to put people in prison who don’t.

Prosecutors claimed he earned more than $38 million between 1999 and 2001 and owed $2.7 million in back taxes. Snipes apologized for his behavior during the trial, insisting he was “unschooled in the science of law and finance,” and contested the ruling in the Georgia Court of Appeals last November.

Unschooled…come on Wesley.  He was schooled all right.  In fact, his teachers taught that compliance with federal tax law was unconstitutional and he didn’t have a responsibility to report, file or pay.  Oh, but when his teachers were sentenced to prison and found guilty of felony crimes, Wesley decided it was time to play stupid and apologize.  Can’t say that an appeals court will give much sympathy to that.

In the appeal documents, his attorney accused prosecutors of seeking to make an example out of the actor, insisting the sentence “focused too heavily on deterrence.”

Snipes has been free on bail pending the outcome of the appeal, but he’s not concerned about his ongoing legal problems. He says, “I wouldn’t say I’m worried about it; I’m aware of it. All things fall as they should. At I’m at great peace with how I live my life and the blessings that the Lord has bestowed upon me.”

And Snipes is sure he will emerge victorious once a decision is made on his appeal. He adds, “Absolutely, we’re gonna win this!”

WIN THIS he says.  If he does then God help the IRS and compliance with the tax law…cause Wesley will set the example for tax patriots to test the system of voluntary compliance.


Paul Pogue – Texan Guilty of Tax Evasion – it is that time of year!

February 24, 2010

Pleading guilty, Paul Pogue of McKinney, Texas, admitted that he under reported his income by nearly 1/2 million dollars.

Pogue, stated, in court, that he was employed as a consultant for a construction company, acknowledged in court that he stated on his 2003 tax return that he only had taxable income of $4,594,052 for that year, when he knew he had taxable income of $5,588,249.70.  Pogue admitted in court documents that he also knowingly understated his taxable income on his 2004 and 2005 individual tax returns.  Pogue admitted reporting only $3,111,715 in taxable income for 2004, when he knew his taxable income was $3,686,784.40, and reporting only $2,908,235 in taxable income for 2005, when he knew he actually had $3,030,684.70 in taxable income that year.  Pogue acknowledged that the total tax loss resulting from his additional, unreported income was $473,680.53.

As you can imagine, failing to report income causes ire in the hallowed halls of the IRS.  Pogue faces up to three years in prison and likely repayment of the tax on the income he admitted was under reported.

UPDATE ON SENTENCING:  https://chuckgallagher.wordpress.com/2010/08/27/paul-pogue-prison-sentencing-set-for-august-27th-outcome-probation-or-prison/

EXPANDED DISCUSSION:

Comments were made which have since been retracted.  I respect the poster’s decision to retract, however, I will offer some comments relative to the posters comments while removing them from this blog:

A comment was made that inferred that Mr. Pogue did not do business with the government:  Doing business with the US Government has no impact on whether Mr. Pogue is guilty of tax evasion (or under reporting of taxable income).  All US Citizens are expected to report all income from all sources unless specifically exempt from tax per the US tax code.

Mr. Pogue’s guilty plea has a direct impact on his family and if that plea puts him in federal prison, then one could conclude that his workers may be out of a job.  The REALITY CHECK is that if ALL income had been reported, then we would not be discussing Mr. Pogue.

Only as a point of reference.  While I am not proud of this, I spent time in federal prison for tax evasion.  I, too, was a man of faith, in fact, I held the position of Director of Music in my church, deacon and was a community leader – sitting on several boards.  It’s funny in life, but it seems that anyone can make mistakes and it would seem that if what Paul plead guilty to is true – then he made a mistake that will cost him.

As mentioned above the specific comments related to Mr. Pogue’s CPA have been removed.  However, for anyone who pleads guilty of under reporting income, there will be questions raised as to whether the accountant was complicit in the evasion.  Notice, several of my blog entries reflect tax preparers being prosecuted for willful failure to properly report a clients income.  In this case, if Mr. Pogue was providing inaccurate information to his CPA, that would exonerate the accounting firm.  If not, well???

Now…with what little I know about the federal system, if his CPA was guilty of a tax crime, then he would be a bigger target than Paul.  I am reasonably certain that if the government feels that Paul’s CPA is somehow complicit they are looking that way.  I wonder, however, why the finger is being pointed at the CPA?  What did the CPA advise Paul that would have caused him (Mr. Pogue) to plead guilty to nearly 1/2 million of under reported income?  This is the part that is confusing.

Two comments: (1) Paul is not being put on trial.  He avoided that by pleading guilty.  (2) Regardless of his character or kindness, Paul plead GUILTY.  And, unless he is not, one fact remains – HE PLEAD GUILTY.  Guilt happens to kind men, men with character, men who otherwise by their actions deserve better.

EVERY CHOICE HAS A CONSEQUENCE.  It would seem that Paul made a choice that violated federal law – admitted it – and now will face the consequence.  For his sake and that of his family I hope he has a great attorney who can call upon the compassion of the court to recognize all that Mr. Higgins has stated and seek a minimal sentence for Mr. Pogue.

REALITY CHECK – The federal government has one method that is quite effective to encourage folks to obey the tax laws … FEAR.  Mr. Pogue likely reduced his sentence by making it easy for the government to convict.  But, his guilty plea and sentencing to follow make it yet another example of how the system works.  If you don’t file, don’t pay or don’t work to accurately reflect your taxable income – expect a nasty outcome.

COMMENTS WELCOME!