Pharmacist + American Tax Consultants = Indictment

[LPC]

From the Department of Justice:

Department of Justice
________________________________________________________________________
FOR IMMEDIATE RELEASE
TAX
FRIDAY, DECEMBER 2, 2010
http://WWW.JUSTICE.GOV
(202) 514-2007 begin_of_the_skype_highlighting              (202) 514-2007      end_of_the_skype_highlighting
TDD (202) 514-1888
USFWS (503) 231-6211

ALABAMA PHARMACIST AND WIFE INDICTED ON TAX FRAUD CHARGES

MONTGOMERY, Ala. – A husband and wife were indicted by a federal grand jury for conspiring to defraud the United States, tax evasion, and filing a false claim for tax refund, the Justice Department and the Internal Revenue Service (IRS) announced today. The indictment against Thomas K. Frye and Kathy M. Frye, residents of Andalusia, Ala., was returned on Nov. 17, 2010, and unsealed yesterday. The grand jury also charged Thomas Frye with passing fictitious financial instruments.

According to the indictment, beginning in 1999 the Fryes conspired to defraud the United States by submitting IRS forms to their employers that falsely claimed they were exempt from federal income tax. The Fryes also filed false federal income tax returns that understated their income. In late 2008, the Fryes filed a false refund claim with the IRS in the amount of $317,990. When the IRS attempted to collect the back taxes owed by the Fryes, Thomas Frye submitted false financial instruments to the IRS to purportedly pay their taxes. Mr. Frye represented to the IRS that one of the false instruments had a value of $100 billion.

An indictment merely alleges that crimes have been committed, and the Fryes are presumed innocent until proven guilty beyond a reasonable doubt. If convicted, Thomas Frye faces a maximum prison sentence of 105 years and Kathy Frye faces a maximum prison sentence of 30 years.

John A. DiCicco, Acting Assistant Attorney General of the Justice Department’s Tax Division, thanked the U.S. Attorney’s Office for the Middle District of Alabama, IRS Criminal Investigation agents who investigated this case, as well as Tax Division trial attorneys Charles M. Edgar, Jr. and Michael Boteler, who prosecuted the case.

More information about the Justice Department's Tax Division and its enforcement efforts is available at http://www.justice.gov/tax/.
# # #
10-1380

The indictment discloses that the couple were clients of American Tax Consultants, which are also referenced here and here.

[LPC]

They pled guilty:

ALABAMA PHARMACIST AND WIFE PLEAD GUILTY TO TAX FRAUD CONSPIRACY

MONDAY, MAY 14, 2012

WASHINGTON -- Thomas K. Frye and Kathy M. Frye, husband and wife, and residents of Andalusia, Ala., pleaded guilty to conspiring to defraud the United States, the Justice Department and the Internal Revenue Service (IRS) announced today.

According to court documents, beginning in 1999, the Fryes conspired to defraud the United States by submitting IRS forms to their employers that falsely claimed they were exempt from federal income taxes. When the IRS attempted to collect back taxes owed by the Fryes, Thomas Frye submitted false financial instruments to the IRS in purported payment of his and his wife's tax liability. In one such instrument, Mr. Frye represented to the IRS that the false instrument had a value of $100 billion. Court records also established that, as part of the conspiracy, the Fryes filed false federal income tax returns for the years 2000 through 2007 that substantially understated their incomes.

Sentencing has not yet been scheduled. The Fryes face a potential maximum of five years in prison, three years of supervised release, an order of restitution and a maximum fine of $250,000, or twice the loss caused by the offense.

Assistant Attorney General Kathryn Keneally of the Justice Department's Tax Division thanked the Special Agents of IRS -- Criminal Investigation who investigated the case, Tax Division Trial Attorneys Charles M. Edgar, Jr. and Michael C. Boteler, who are prosecuting the case, and United States Attorney George L. Beck, Jr. and his entire office for their assistance with the prosecution.

More information about the Tax Division and its enforcement efforts is available at http://www.justice.gov/tax.

[Assessor]

Thomas Frye submitted false financial instruments to the IRS in purported payment of his and his wife's tax liability. In one such instrument, Mr. Frye represented to the IRS that the false instrument had a value of $100 billion.

I wonder about the specifics of this "instrument". If it's a Bill of Exchange, it's probably a record for the purported value of one person's "secret Treasury account". I don't remember anyone ever claiming that the "secret Treasury accounts" contain $1 billion, much less $100 billion.

[wserra]

What are a few extra zeros when the number is made up to begin with?