Former Glenmore Officer Sentenced

Michael Comer to Serve 36 Months

CHARLOTTESVILLE, VA—The former treasurer of the Glenmore Community Association and officer with Glenmore Associates, PBK Real Estate, and Kessler Enterprises was sentenced this morning in the United States District Court for the Western District of Virginia.

Michael Douglas Comer, 47, of Charlottesville, previously waived his right to be indicted and pled guilty to one count of mail fraud and one count of tax evasion in relation to a scheme he devised to steal money from Glenmore Associates, PBK Real Estate, and Kessler Enterprises. This morning, he was sentenced to 36 months of incarceration.

"Mr. Comer violated the trust placed in him by the residents of Glenmore, and his family, when he embezzled their money to enrich himself," United States Attorney Timothy J. Heaphy said today. "He compounded that violation by failing to pay federal income taxes for years. Today's sentencing ensures that Mr. Comer will be justly punished for his fraud. It also requires him to repay the back taxes he evaded."

"The role of IRS-Criminal Investigation becomes even more important in embezzlement cases due to the complex financial transactions that can take time to unravel," said Rebecca Sparkman, Internal Revenue Service-Criminal Investigation Special Agent in Charge, Washington, D.C. Field Office. "As we often see, the victims are not only the taxpayers, but also the entities who suffer financial harm."

Comer previously admitted that between 2004 and 2009, he devised a scheme to defraud Glenmore Associates, PBK Real Estate, and Kessler Enterprises by embezzling funds from these entities and using these funds to pay himself unauthorized compensation and to pay unauthorized personal expenses. Those personal expenses included car payments and mortgage payments.

In addition, Comer admitted to affirmatively evading his individual income taxes for the years 2003 through 2009 by annually submitting false income tax returns. The defendant admitted he received unreported taxable income of at least $2,548,212 and upon that taxable income there was owing to the United States an additional income tax of at least $933,028. Comer agreed to make full restitution to the United States for all taxes due and owed.

The investigation of the case was conducted by the Internal Revenue Service and the Federal Bureau of Investigation. Assistant United States Attorney Ronald Huber and Larry Wszalek, an attorney with the United States Department of Justice, Tax Division, Southern Enforcement Section, are prosecuting the case for the United States.

Missouri CPA Pleads Guilty to Mail Fraud and Tax Evasion

WASHINGTON – Murphy Hubbard, a Springfield, Mo., CPA, pleaded guilty to two counts of mail fraud and one count of tax evasion before Judge James England in the Western District of Missouri, the Department of Justice and Internal Revenue Service (IRS) announced today. 

According to the terms of Hubbard’s plea, he has agreed to be sentenced to 42 months in prison and shall be ordered to pay full restitution to the victims in this case, including the IRS.  

According to court documents, Hubbard owned and operated an accounting and tax business known as The Hubbard Group PC.   Hubbard embezzled more than $400,000 from two trusts placed under his control by local families between 1998 and 2009.  The first of these trusts, created by Ms. Hazel Beatrice S. Hirst, of Springfield, designated four local charities as the beneficiaries of her life’s savings. The second trust, established by the heirs of Mr. Noel C. Rummens, of Rogersville, Mo., was created for the express purpose of funding educational expenses for Mr. Rummens’s surviving heirs and relatives.   Rather than fulfilling the wishes of these families by faithfully executing their trust agreements, Hubbard instead took the vast majority of this money for himself, using it to pay personal expenses, to buy items such as automobiles and farm equipment, and for travel.  Virtually all of the money taken from these trusts went unreported to the IRS, resulting in a tax loss of approximately $79,434.  

The case is being prosecuted by Tax Division Trial Attorneys Michael C. Boteler and Mitchell S. Bober, and Assistant U.S. Attorney Steven M. Mohlhenrich.   The case was investigated by the IRS – Criminal Investigation Division.

Additional information about the Justice Department’s Tax Division and its enforcement efforts may be found at www.usdoj.gov/tax.

Owners of S&H Parking Systems Sentenced on Million-Dollar Tax Evasion Charges

ST. LOUIS, MO—The United States Attorney’s Office announced today that William Bialczak was sentenced to 12 months and one day in prison, ordered to pay $370,185 restitution, and fined $100,000. Kenneth Bialczak was sentenced to 12 months and one day in prison, ordered to pay $347,314 restitution, and fined $75,000. Additionally, each of them was ordered to perform 100 hours of community service.

The Bialczaks engaged in skimming substantial sums of cash receipts from their businesses which were never deposited into their business bank accounts. Cash income generated by the businesses during tax years 2005 and 2006 far exceeded cash that was deposited into the business bank accounts and subsequently reported to the Internal Revenue Service as gross receipts. As part of their pleas in September, they admitted that between 2005 and 2006, gross receipts for their businesses were under reported by approximately $1 million.

The Bialczak brothers own, operate and are equal partners in St. Louis Metropolitan Towing, L.P., Parks Auto Sales, and S&H Parking Systems, LLC, all located in St. Louis. According to court documents, these businesses generated large amounts of cash from the operation of parking lots in downtown St. Louis, towing operations stemming largely from a contract with the St. Louis Metropolitan Police Department, and the sale of vehicles at auction and otherwise.

"The license to run a business is not a license to evade taxes," said Toni Weirauch, Special Agent in Charge of IRS Criminal Investigation. "The Bialczak's misconduct cheated all Americans, since we all have to pay our fair share for the government services and protections that we enjoy."

William Bialczak, 62, St. Louis County; and Kenneth Bialczak, 49, St. Louis County, each pleaded guilty in September to two felony counts of tax evasion, and appeared today before United States District Judge Rodney W. Sippel.

This case was investigated by Internal Revenue Service Criminal Investigation, Postal Inspection Sercvice and the Federal Bureau of Investigation. Assistant United States Attorney Hal Goldsmith is handling the case for the U.S. Attorney's Office.

Tax Evasion

San Diego Attorney Sentenced for Tax Evasion


April 20, 2010 - United States Attorney Karen P. Hewitt announced that Todd Smith, a licensed attorney, was sentenced today in federal court in San Diego before United States District Judge James Lorenz to serve three months in custody and five months of home confinement for evading $60,000 in taxes for 2002 and 2003. Judge Lorenz also ordered Smith to pay $60,000 in restitution. On May 7, 2009, Smith pled guilty to one count of tax evasion.

According to documents filed in court, during 2002 and 2003, Smith was a practicing attorney who owned and operated a San Diego-based entity known as Corporate Deposit Program ("CDP"), and previously Corporate Development Program and Corporate Development Partners. CDP raised capital for target companies through investment funds. It did so, in part, by issuing prospectuses for each investment that misrepresented to investors that the majority of investor funds were being used to acquire stock. In fact, only approximately 25 percent of the investor funds were used to purchase stock. The majority of investor funds were used to pay commissions and for operating expenses. Smith ended his involvement with CDP in 2003 and began to raise capital for Dermacia (a cosmetic and skin care company), through an entity called Shorepoint Financial ("Shorepoint"). Smith eventually became Vice President and General Counsel of Dermacia.

According to court documents, in 2002 and 2003, Smith received over $219,000 of taxable income from his activities at CDP and Shorepoint in the form of sales commissions and other payments. In an attempt to evade taxes, Smith caused commission checks to be made payable to his girlfriend (and eventual wife) and to a nominee entity. Smith also never maintained a personal bank account and instead converted the majority of commission checks into either cash or cashiers’ checks and deposited numerous checks into his wife’s checking account to disguise the receipt of taxable income.

Despite his receipt of income, Smith never filed a federal individual income tax return until 2007, after being made aware of the criminal investigation. Smith’s late-filed tax returns were also false in that Smith failed to report taxable income that he received beyond what was reported on Forms 1099 issued to him and filed with the Internal Revenue Service (IRS).

This case was investigated by agents from the Internal Revenue Service-Criminal Investigation, the Federal Bureau of Investigation, and the United States Postal Inspection, and prosecuted by Special Assistant U.S. Attorney Timothy J. Stockwell and Assistant U.S. Attorney Stacey Sullivan.

Tax Evasion

Former Campaign Manager Pleads Guilty to Embezzlement, Tax Evasion Charges


March 12, 2010 - Nora R. Dannehy, United States Attorney for the District of Connecticut, announced that MICHAEL IAN SOHN, 34, of Fairfield, pleaded guilty today before United States Magistrate Judge Donna F. Martinez in Hartford to charges related to his embezzlement of campaign funds from the Christopher Shays for Congress Committee.

According to court documents and statements made in court, SOHN was employed as the campaign manager for the Christopher Shays for Congress Committee from January 2003 through December 2008, and also was employed by the United States House of Representatives from January 2003 through May 2008. In pleading guilty today to one count of conversion of campaign funds, SOHN admitted that, from 2005 to 2008, he embezzled a total of $252,424.10 from the Campaign. SOHN admitted that he stole the money from the Campaign by writing himself checks and using the Campaign’s ATM/debit card to withdraw cash and make debit card purchases. SOHN did not have signature authority on the Campaign’s bank accounts, so he forged the signature of the Campaign Committee Treasurer on the checks that he wrote to himself.

SOHN also pleaded guilty today to one count of tax evasion stemming from his filing of a fraudulent federal tax return for the 2008 tax year. On the tax return, SOHN stated that his taxable income for 2008 was $75,860, and that the amount of tax due was $15,617. However, SOHN’s taxable income for 2008 was approximately $163,949 on which he owed approximately $43,468 in federal income tax.

SOHN has admitted that he failed to report a total of approximately $527,136 in taxable income for the calendar years 2005 through 2008, which resulted in a loss of $95,955 to the Internal Revenue Service.

SOHN is scheduled to be sentenced by U.S. District Judge Robert N. Chatigny on May 27, 2010, at which time SOHN faces a maximum term of imprisonment of 10 years and a fine of up to $350,000. SOHN also will be ordered to pay full restitution to the Shays Campaign Committee, and back taxes, penalties and interest to the Internal Revenue Service.

This case was investigated by the Federal Bureau of Investigation and Internal Revenue Service – Criminal Investigation Division. The case is being prosecuted by Assistant United States Attorney Peter S. Jongbloed.