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Four in SLC accused of cheating IRS

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scion Member Level  Wednesday, 07/01/09 03:45:10 PM
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Four in SLC accused of cheating IRS

Grand jury » Special agent says organization caught Al Capone 'and we're just as good now.'

By Steve Gehrke
The Salt Lake Tribune
Updated: 06/30/2009 06:25:17 PM MDT
http://www.sltrib.com/News/ci_12726385

A federal grand jury on Tuesday returned an indictment charging four Salt Lake City residents with engaging in an elaborate tax evasion scheme to avoid reporting more than $30 million in stock sales spanning a seven-year period.

U.S. Attorney Brett Tolman announced the 11-count indictment during a news conference Tuesday afternoon. Tolman said the four -- Lester Hemmer Mower, 49; Eva Jeanette Mower, 49; Adrian Angus Wilson, 48; and Nathan Whitney Drage, 50 -- gained money from stock sales and hid it from the Internal Revenue Service using their merger and acquisition business from 1999 to 2006.

They would take "shell" companies public and merge them with private companies, leaving themselves in control of the newly public stock. They would then sell the stock and put that cash in various bank accounts, spending some along the way for mortgage payments, school bills and car payments, according to Tolman.

The group concealed control of the cash using about 30 brokerages and 20 bank accounts, and they never reported the income to the IRS through tax returns, Tolman said, adding that two defendants did not file returns while the others underreported their income and taxes due.

While Tolman called the case "particularly complex and difficult," he said it should send a message that the IRS actively seeks tax offenders.

IRS Special Agent Paul Camacho reminded the public that his organization caught Al Capone, "and we're just as good now," he said.

"We will be relentless in our pursuit," Camacho said, adding that it is "un-American" to cheat on taxes.

Camacho would not comment on how the investigation into the four Utahns was initiated, but he said it often takes years to dissect a plan so elaborate.

Tolman said the defendants likely had some knowledge of Securities and Exchange Commission rules, as they were carrying out lawful transactions until they hid information about their income.

The first criminal count alleges conspiracy to impair and impede the Internal Revenue Service while the other 10 charge the defendants with tax evasion. The conspiracy charge is punishable by up to five years in prison and a $250,000 fine. Evasion could bring five years in prison and a $100,000 fine, as well as the cost of prosecution.

The four are expected to be summonsed to be arraigned in federal court in three to four weeks, Tolman said.

While Tolman noted the amount of money and the complexities of this case set it apart from typical tax evasion issues, he said it has a common element.

Said Tolman: "Even the most complex cases come down to someone taking money from someone else."

http://www.sltrib.com/News/ci_12726385


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