Former D.C. Mayor Charged in Tax Case

Former District of Columbia Mayor Marion Barry has been charged with failure to file his 2000 income tax return, a misdemeanor. If convicted, he faces up to a year and a half in prison.

Barry, 69, a former four-term mayor who is now serving as a council member, was videotaped smoking crack cocaine in an FBI sting during his third term as mayor. He served six months in prison, and then was reelected to mayor in 1994. He did not seek reelection after that term. Last year, Barry reentered public life when he won election as a council member representing one of the District’s poorest neighborhoods.

As a council member, Barry earns $92,605 per year. If he continues to serve through 2008, he will qualify for a lifetime pension.

Barry is allowed to retain his seat unless required to serve felony prison time, according to the law.

San Diego Car Dealer Charged with Evasion

A car dealer in the San Diego area was charged with six counts of tax evasion and filing false tax returns.

According to the indictment, Mohammad Jafar Nikbakht, also known as Freddy Nikbakht, intentionally underreported his personal income on his individual federal tax returns from 1998 to 2000 by omitting business income he earned during those years. Nikbakht owned California Car Exchange, a licensed wholesale used car business. He also was a co-owner of California Collision Center Inc., an auto paint and body repair shop, and of Miramar Auto Credit Company, a retail used car business. From 1998 to 2000, Nikbakht bought and sold used cars at auto auctions and car dealers in the San Diego area. The indictment further alleges that Nikbakht omitted income he earned during these years.

For example, Nikbakht reported $33,552 in taxable income for 1998, and no taxable income for 1999 and 2000, when in fact he knew his taxable income was higher for each of these years.

If convicted, he faces up to three years in prison and a fine of up to $100,000 for each count.

Salesperson Failed to Report Commissions

A former resident of Danvers, Mass., Nadine J. Griffin, 44, now residing in Florida, was charged with filing false income tax returns for the years 1998 and 1999. According to the indictment, Griffin was a salesperson for an organization called Global Prosperity, which was in the business of selling a 12-part audiotape/CD series and offshore seminars located in such places as Aruba and Cancun, Mexico. The audio series retailed for $1,250 and offshore seminars from $6,250 per ticket to $18,750 per ticket.

Griffin allegedly failed to report his commission on his income tax returns.

Calif. Man Failed To Pay $673,000 in Taxes

David Lopez Quintana, 39, of Pleasanton, Calif., pleaded guilty to one count of willful failure to pay employment taxes to the IRS after he admitted to failing to pay $673,000 in employment taxes.

According to his plea agreement, Quintana owned several businesses related to pagers, cell phones and car stereos from 1998 to 2000. Quintana was required to collect and pay the taxes that he withheld from his employees. Beginning in the third quarter of 1998, Quintana began failing to pay employment taxes to the IRS.

According to the plea agreement, Quintana’s pattern of not complying with federal tax laws continued through the fourth quarter of 2000 and totaled $673,013.86. Quintana admitted that he failed to pay the IRS a total of $421,987 in federal income taxes that he withheld from his employees’ wages. Quintana also admitted that he failed to pay $251,025 of Federal Insurance Contribution Act (FICA) taxes.

Federal law requires that employers to collect federal income taxes and FICA taxes (Social Security and Medicare taxes).

Quintana faces up to five years in prison, three years of supervised release and a fine of up to $10,000.

N.J. Executive Admits to Tax Evasion

The owner of a defunct New Jersey-based health benefits management company pleaded guilty to mail fraud and tax evasion, admitting that he misled subscribing participants and employers about the management of premium payments, embezzled from commingled accounts and ran the business into bankruptcy, U.S. Attorney Christopher J. Christie announced.

Donald Ruth, 64, formerly of Hackensack and now of Hudson, Fla., admitted that, with the diverted and commingled funds of Wayne, N.J.-based Meridian Benefit, he purchased a Florida home, a boat and paid for travel and other personal expenses — in addition to receiving more than $1.5 million in income. Ruth left Meridian with approximately $15 million in unpaid insurance claims.

As part of his plea, Ruth admitted that for tax years 2001 and 2002, he embezzled $102,345 and $676,464, respectively, and used the money for personal purposes, including the purchase of a home in Tarpon Springs, Florida and a boat. Ruth admitted that he filed false income tax returns that did not report this additional income.

Wisc. Man Pleads Guilty to Tax Charges

James P. Theyerl, of Manitowoc, Wisc., pleaded guilty to two felony counts for failing to file tax records and submitting fictitious financial instruments to the Wisconsin Department of Revenue.

According to the plea agreement, Theyerl operated a charter boat business and car repair business in Francis Creek, Wisc. According to IRS code, a business must report any transaction over $10,000. Theyerl refused to supply such records. Theyerl filed false forms with both the IRS and state government.

Theyerl faces up to 25 years in prison and a $250,000 fine, or both, for submitting fictitious documents to the state. He also faces up to three years in prison and up to a $250,000 fine.

Ct. Man Pleaded Guilty to Evasion

David E. Montesi, 46, formerly of Killingworth, Ct., pleaded guilty to income tax evasion. Montesi admitted that, in September 2000, he attempted to evade the payment of income tax owed by him and his spouse for the calendar year 1999. Specifically, Montesi claimed their 1999 income was $46,048. In fact, their joint taxable income was $220,020. By omitting this additional income, Montesi evaded the payment of $56,272 for that calendar year. He faces up to five years in prison.

Ky. Man Pleads Guilty to Tax Evasion

Lenny George Hall, 35, of McDowell, Ky., pleaded guilty to a charge of filing a false income tax return. Prosecutors alleged that Hall failed to include on his 1998 and 1999 tax returns money that he received from his business, Poor Boys Discount Tobacco. Hall received $130,515 in 1998 and $21,374 in 1999 that he failed to report. In all, Hall failed to pay $32,901 in taxes for 1998 and $3,242 for 1999.