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Tax Fraud Cases
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Recent IRS Tax Fraud Cases Author of "The Great Snow Job" Convicted of Tax Evasion ThePotentialsUnlimited.com/loophole.htm On October 15, 2001, Barrie Leslie Konicov (ThePotentialsUnlimited.com/loophole.htm) was sentenced to 87 months in prison followed by three years supervised release. In addition, the judge ordered Konicov to file correct tax returns and pay all tax deficiencies, along with paying the cost of prosecution, which totaled $11,311.81. In his press release, United States Attorney Phillip J. Green stated, "At this time, when citizens are uniting, all taxpayers need to pay their fair share. It is these collected taxes that fund the Federal agencies that are currently called upon to serve the safety and security needs of each and everyone. This verdict and sentence should send a strong message to those people who are engaged in similar activities and I urge them to comply with the Federal tax laws." On June 22, 2001, Konicov (ThePotentialsUnlimited.com/loophole.htm), of Amado, Arizona, was convicted on one count of conspiracy to defraud the United States by impeding, impairing, obstructing, and defeating the lawful governmental functions of the IRS. He was also convicted on three counts of willfully failing to file Federal income tax returns for the years 1994, 1995, and 1996. Konicov is the founder of De-Taxing America and author of a book entitled, "The Great Snow Job." (ThePotentialsUnlimited.com/loophole.htm). According to evidence presented in court, Konicov (ThePotentialsUnlimited.com/loophole.htm) accumulated and deposited more than $3.9 million into a number of bank accounts and sham trusts. The money deposited was obtained through the De-Taxing America program and sham trust packages that were sold throughout the U.S. to over 1,000 people. On October 17, 2001, Susanne Konicov (ThePotentialsUnlimited.com/loophole.htm) was sentenced to six months home confinement, 200 hours community service, and two years probation. In addition, the judge order her to pay the costs of her court-appointed attorney and a fine of $2,000. On May 3, 2001, Susanne pled guilty to three counts of failure to file tax returns for 1994, 1995, and 1996. Virginia Lawyer sentenced to prison On July 25, 2001, the United States Attorney's Office in the Eastern District of Virginia announced that Rickey G. Young, age 47, a Martinsville Attorney, was sentenced to serve 18 months in prison followed by one year of supervised release, after a jury found him guilty on February 1, 2001. Young willfully failed to file income tax returns for 1993, 1994, 1995, 1996 and 1997. Young was also sentenced to serve a six-month term of imprisonment for contempt of court, concurrent to his sentence for the tax crimes, for the unauthorized disclosure of discovery material furnished to him during preparation for the trial of the tax case. According to evidence presented during the four-day trial, the IRS suffered a loss of more than $90,000 as a result of Young's failure to file. Mortgage Loan Officer Sentenced March 29, 2001, John L. Katsafanas was sentenced to 12 months and one day in prison and two years of supervised release following his incarceration with the condition that he satisfy his civil tax liability with the IRS. He was also ordered to pay $110,864 in restitution. On December 4, 2000, Katsafanas pled guilty to two counts of willfully failing to file returns. According to the Statement of Facts, which was presented at Katsafanas' plea, he failed to file tax returns for the years 1977-1991. In 1993, after his delinquency had come to the attention of the IRS he engaged a CPA firm to help him clear up the delinquencies. They prepared returns for him for 1992 through 1994, and helped him to negotiate an offer in compromise to settle the back taxes from 1977 through 1991. The IRS accepted the offer in compromise, with the express proviso that, in addition to the compromise amount, he "pay all required taxes for five years from the date of the agreement [August 14, 1995]." Although he agreed to the arrangements, Katsafanas had not filed a return since the 1994 one prepared by the CPA firm. Defendant Changed Plea to Guilty On January 9, 2001, Michael Silverstein of Milford, Connecticut, was sentenced to five months incarceration and one year of supervised release with the first five months served in home confinement. As a special condition of probation, Silverstein must serve his community for 100 hours. An Information was filed in the District of Connecticut U.S. District Court alleging Silverstein's failure to file his 1993, 1994 and 1995 returns. After an initial plea of not guilty, Silverstein pled guilty to one count of willful failure to file his 1995 federal income tax return. Investor Failed to File Returns on Over $542,000 in Income On December 13, 2000, James R. Clark was sentenced to 12 months in federal prison for willful failure to file tax return for the 1996 tax year. Clark received the maximum sentence for a misdemeanor. Clark was also sentence in violation of 18 USC 1322(2)-Obtaining Bank Funds Under False Pretenses and was ordered to serve 37 months incarceration to be served concurrently with the 12 months received on the failure to file charge. Upon release, he was ordered to serve 5 years supervised release. Clark was ordered to pay a total of $546,000 in restitution to 22 victims he defrauded ranging monetarily from $3,000 to $85,000 each. On May 11, 2000, Clark pleaded guilty to ten counts of obtaining bank funds under false pretenses and one count of failure to file a federal income tax returns. Clark admitted receiving gross incomes of approximately $75,221 in 1994, $184,945 in 1995 and $282,396 in 1996 without filing federal income tax returns for those years. Clark operated a scheme whereby he took investors funds, which were solicited or accepted for investment purposes. The funds were deposited in an account under the name R.L. Clark & Company, which was maintained by Clark, and then spent on personal items such as a home, jewelry, and furs. Tree Trimmer Sentenced On December 6, 2000, Ernest Fenton of Markham, Illinois, was sentenced to six months incarceration for willfully failing to file Federal income tax returns in violation of Title 26 USC Section 7203 for the 1994, 1995 and 1996. From 1990-1997, Fenton was in the business of tree trimming, d.b.a. Fenton Tree Service, and received the majority of his income from the City of Markham, State of Illinois. During this same period of time Fenton did not file Federal income tax returns. The defendant and the government agree a total income of $334,252 was unreported for offenses of conviction and relevant conduct. According the to sentencing guidelines used, the total tax loss to the government was approximately $93,000. Using False Social Security Numbers Stuart Baer of Raleigh, NC, was sentenced on October 3, 2000, to 16 months imprisonment for income tax evasion. Mr. Baer failed to file federal income tax returns in 1993, 1994, and 1995. According to the indictment he attempted to conceal his income by providing false social security numbers to his employer and bank and used a false name on a bank account. Mr. Baer earned taxable income of $69,071.96, $75,865.55, and $39, 297.18 during tax years 1993-1995 respectively. In addition to the period of incarceration he received, Mr. Baer was sentenced to one year of supervised release, ordered to perform 100 hours of community service and file all delinquent tax returns. Insurance Business Owner Sentenced On October 12, 2000, Channing Nando Wilson of Durango, Colorado was sentenced to 18 months imprisonment and fined $30,000 after being convicted of failure to file federal income tax returns. During a three-day trial held in July 2000 the government presented evidence that Mr. Wilson earned gross income of at least $129,000 in 1994, $88,000 in 1995 and $61,000 in 1996 from an insurance business he owned. Mr. Wilson’s tax liability for tax years 1994-1996 was more than $45,000. Mr. Wilson testified at trial that according to his interpretation of the tax laws, he did not believe he was required to file income tax returns. The jury rejected these arguments and convicted him on all counts. Failure to File Carpentry Business Owner Sentenced RALEIGH - United States Attorney Janice McKenzie Cole announced that EDWARD L. KOTMAIR (http://www.save-a-patriot.org) 41, of Westminster, Maryland, was sentenced in federal court here on Thursday, February 3, 2000, for failure to file federal income tax returns. Chief U. S. District Judge Terrence W. Boyle imposed a sentence of 27 months imprisonment and a supervised release term of one year. Following a three-day jury trial in September, 1999, KOTMAIR (http://www.save-a-patriot.org) was convicted of failing to file federal income tax returns for the years 1990, 1991, and 1992. During those years, KOTMAIR (http://www.save-a-patriot.org) operated his own carpentry business, Commercial Installers, located in Cary, N. C. His company earned income of approximately 1.7 million dollars during the three-year period. Some of KOTMAIR's income came from the United States Government while he did subcontracting work on the Library of Congress and a Federal Deposit Insurance Corporation building in Washington, D. C. KOTMAIR (http://www.save-a-patriot.org) was arrested in September, 1998, and has remained in federal custody since that time. During his trial, KOTMAIR (http://www.save-a-patriot.org) attempted to convince the jury that he did not believe he was required to pay income taxes. The jury rejected his argument and found him guilty on all three counts of the indictment. KOTMAIR (http://www.save-a-patriot.org) is a member of Save-A-Patriot Fellowship, a tax protest organization located in Westminster, Maryland. The group, which was founded by KOTMAIR's father, John B. Kotmair, states that U. S. citizens living and working in the United States are not required to pay income taxes. The elder Kotmair was convicted of failure to file federal income tax returns in the early 1980's and served a prison term. Other members of Save-A-Patriot Fellowship (http://www.save-a-patriot.org), including close associates of KOTMAIR (http://www.save-a-patriot.org), also have been convicted of income tax charges and sentenced to prison. According to U. S. Attorney Cole, federal courts and juries have consistently rejected the arguments of "tax protest" organizations, including the Save-A-Patriot Fellowship (http://www.save-a-patriot.org), and have upheld the income tax laws and their applicability to everyone. Investigation of the case was conducted by the Criminal Investigation Division of the Internal Revenue Service.
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