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Terry Neal > Terry
AFFIDAVIT FOR A CRIMINAL ARREST
I, Craige Walker, being duly sworn, hereby depose and state:
This affidavit is made in support of a criminal complaint and
I am a Special Agent (SA) with the Internal Revenue Service
Criminal Investigation, United States Department of Treasury
and have held this position for eight years. I have received
extensive training in the investigation of financial crimes,
including money laundering, conspiracy and tax evasion.
As part of my assigned duties, I investigate financial fraud
that involves the filing of false Federal tax returns for both
individuals and corporations. I have participated in numerous
criminal investigations as both a case agent, and as an assistant
to other agents.
The information contained in this affidavit is based on my
personal knowledge, information provided to me by other law
enforcement agencies, information obtained from public records,
and other sources indicated herein.
Based on this information I have probable cause to believe
TERRY L. NEAL violated Title 26 Section 7206 (1) by knowingly
and willfully subscribing to false income tax returns for the
years 1994 through 1996.
THE ALLEGED VIOLATIONS IS AS FOLLOWS:
- Title 26, United States Code; Section 7206 (1)--Fraud and False
"Any person who (1) Declaration Under Penalties of Perjury.
-- Willfully makes and subscribes any return, statement, or
other document, which contains or is verified by a written decla
ration that it is made under the penalty of perjury and which
he does not believe to be true and correct as to every material
matter shall be guilty of a felony (and should be fined or imprisoned)".
Form 1040, United States Individual Income Tax Return is signed
under penalties of perjury. The declaration reads "I declare
that I have examined this return and accompanying schedules
and statements, and to the best of my knowledge and belief,
they are true, correct and complete."
TERRY L. NEAL signed joint Federal income tax returns, Form
1040 for the
tax years 1994 through 1996 each of which contained the declaration
NEAL's 1994 through 1996 Federal income tax returns were prepared,
signed and mailed within the Judicial District of Oregon. During
the tax years 1994 through 1996, TERRY NEAL maintained a personal
residence in the Judicial District of Oregon.
NON DISCLOSURE OF FOREIGN ACCOUNTS
On or about April 17, 1995 NEAL signed and filed his 1994 United
States Federal income tax return under penalties of perjury.
On line 8 of the return, he listed interest of $111.00. The
form states that if more than $400 in interest was received,
the filer must fill out Schedule B. Part three of this schedule
is called Foreign Accounts and Trusts and it reads as follows:
"At any time during 1994, did you have an interest in or
a signature or other authority over a financial account in a
foreign country, such as a bank account, securities account,
or other financial account?" A person filing a Federal
tax return is required to answer yes to this question if applicable.
NEAL did not file a scheduled B with his 1994 return.
Also attached to this return was a Schedule D entitled "Capital
Gains and Losses". This schedule is used to report gains
and losses from stock sales for the calendar year and the results
are included on line 13 of the Federal income tax return, Form
1040. NEAL's joint tax return shows approximately $30,000 from
proceeds from stock sales, which include only stock sales made
through brokerage firms that are based in the United States.
NEAL reported a gain of approximately $21,000 from the above
I have received financial records of the Bank of Montreal and CM
Oliver & Company (CM Oliver), a brokerage firm. Both are located
in Vancouver, BC Canada. A review of these records revealed the
On or about December 17, 1993, TERRY L. NEAL opened a joint
investment account for himself and his wife, Maureen Neal, with
CM Oliver brokerage firm located in Vancouver British Columbia,
Canada. The account number was 23-0883-1, and it closed in July
During the tax year 1994, NEAL sold shares of stock held in
this personal account and received approximately $297,821.49
in proceeds. This account also paid approximately $219.00 interest
on funds held in the account in 1994.
On or about February 24, 1994, NEAL opened account number 23-1569-5
at CM Oliver in Vancouver, British Columbia, Canada under the
name Newcastle Services. The signature card for this account
shows NEAL's personal address as the location of Newcastle Services
business. NEAL is also identified as the authorized signor for
For Tax years 1994, 1995 and 1996, NEAL directed the sale of
stock from the
Newcastle Services account for these years generating sale proceeds
$125,570.71; $4,138,750.15; and $2,925,833.08 respectively.
was paid interest income for these same years as follows:
- On or about December 16, 1993 NEAL opened a checking account
number 4560-930 at the Bank of Montreal in Vancouver, British
Columbia. This account remained open through July 1996. This was
an interest bearing account at it paid interest of $1,580 in tax
year 1994, at least $341 in tax year 1995 (missing bank statements
for three consecutive months).
- On his 1995 return, filed on or about April 15, 1996, Neal checked
the "no" box as to the existence of any interest in
or signature authority of foreign bank or securities accounts.
As indicated above regarding 1994, he continued to have an interest
in a personal bank account at the Bank of Montreal. He continued
to have a securities account in his own name at C.M. Oliver. He
also continued to have signature authority over the securities
account of Newcastle Services at C.M. Oliver.
On or about July 21, 1995, Henk Keilman opened account number
284555-0 at CM Oliver Vancouver, BC under the name Wycliff Fund
Inc. On October 4, 1995, NEAL was granted signature authority
and full power of attorney which allowed NEAL full control of
For Tax years 1995 and 1996, NEAL directed the sale of stock
for these years generating sales proceeds of $1,089,424.38 and
$841,476.29 respectively. This account also received interest
income for those same years in amounts as follows:
On or about October 20, 1997, NEAL filed a joint 1996 Federal
Income tax return. Attached to this return is Schedule B and
again NEAL checked the "No" box indicating he did
not have a financial interest in or signature authority on a
foreign account. However, in part one of this Schedule B, NEAL
declared he received interest income from bank accounts at the
Bank of Montreal. NEAL did not indicate if this bank was a foreign
or domestic bank. Despite claiming interest income on this return,
NEAL is still required to check the box "Yes" regarding
foreign accounts if applicable.
- On or about November 3, 1998, NEAL filed an amended 1996 Federal
Income tax return only to include additional loss of income from
his corporation, Paradise Yachts. NEAL's amended return did not
include any information about his signature authority or financial
interest in any foreign financial accounts.
During 1996, Neal had signature authority over his personal
bank account at Bank of Montreal, and over the securities accounts
at C.M. Oliver in the names of Newcastle Services and Wycliff
On or about July 16, 1996, NEAL opened account number 4580-106
at Bank of Montreal located in Canada with transferred funds
from account number 4560-930 at Bank of Montreal. Terry Neal
was the only signer of this account and all statements were
mailed to a Canadian address.
On or about December 20, 1996, Maureen Neal opened account
number 4580-341 at Bank of Montreal located in Canada. The bank
statements and the checks identified Maureen Neal as the controller
of this account. The statements were sent to 822 NW Murray Blvd
# 301 (a letter box address) in Portland, Oregon.
WILLFUL INTENT OF MATERIAL MATTERS
NEAL's 1994 Federal income tax return was filed under penalties
of perjury declares Capital Gains of $21,496, which represents
domestic stock sales, when in fact he maintained an investment
account at CM Oliver whereby he generated proceeds from stock
sales in excess of $290,000. The stock sales from this account
were not reported and the capital gains or losses from those
sales were omitted from NEAL'S 1994 Form 1040 Federal Income
Also for tax year 1994, NEAL failed to declare he had a foreign
account as well as interest or signature authority of foreign
accounts. In all he had an interest in three foreign accounts,
his personal bank account at Bank of Montreal, his personal
investment account at CM Oliver and signature authority over
a foreign investment account held in the name of Newcastle Services.
In 1994 NEAL had a foreign investment account at CM Oliver
that paid approximately $219.00 in interest income and a personal
account at the Bank of Montreal that paid approximately $1,580.00
in interest income. Both of these accounts and the interest
earned from them were omitted from NEAL's 1994 Form 1040 Federal
income tax return.
NEAL's 1995 joint Federal income tax return was filed under
penalties of perjury and on this return NEAL failed to declare
he had foreign accounts and that he was an authorized signor
on two other foreign accounts. The accounts he omitted include
two investment accounts at CM Oliver brokerage of Vancouver,
Canada and his personal checking account at the Bank of Montreal
in Vancouver, Canada. The sales proceeds generated from the
investment accounts each exceeded one million dollars for the
1995-tax year. In fact, the Newcastle account for the 1995-tax
year had in excess of $4 million dollars in sales proceeds.
NEAL's 1996 join Federal income tax return was filed under
penalties of perjury and on this return NEAL admitted to having
personal accounts at the Bank of Montreal but he intentionally
failed to disclose his interest in two foreign investment accounts
held at CM Oliver located in Canada. The sale proceeds generated
through these accounts exceeded $2.8 million.
Based on the aforementioned facts and circumstances, as well as
my training and experience and the experience of other agents, I
have probable cause to believe that TERRY LEROY NEAL willfully with
criminal intent filed false Federal Income tax returns under penalties
of perjury for the years 1994 through 1996.
I have reviewed this affidavit with Assistant United States Attorney
Robert Ross from the District of Oregon, and he has told me he is
satisfied that the affidavit is legally and factually sufficient.
Special Agent, IRS/CID
Subscribed and sworn to before me
this ________________ day of ____________________
UNITED STATES MAGISTRATE JUDGE
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