WASHINGTON - Roy Albert Lewis, a dentist from Danville, Calif., was convicted yesterday of conspiring to defraud the United States and evading his income taxes for 1998 through 2001, the Justice Department and Internal Revenue Service (IRS) announced.
According to the indictment and evidence introduced at trial, in approximately 1995, Lewis became a client of Tower Executive Resources, a Denver organization which promoted a tax evasion scheme involving the use of false invoices. Lewis's medical practice paid bogus expenses to Tower for items such as franchise, consulting, or management fees to generate huge tax deductions. Tower then deposited the bulk of those funds into a secret offshore bank account which Lewis controlled.
Over a ten-year period, Lewis sent $300,000 to this secret offshore bank account through the Tower system. In addition, when the IRS learned of the Tower scheme and audited the defendant, he stopped filing income tax returns and falsely claimed that he believed that the law did not require him to file.
Lewis’s father, Leroy Albert Lewis, an oral surgeon, was also charged with conspiracy to defraud the United States and attempting to evade tax on income he earned from his medical practice by his participation in the Tower program. He is awaiting trial.
“The jury's verdict in this case assures honest taxpayers that those who willfully dodge their tax obligations will be held accountable,” said Eileen J. O’Connor, Assistant Attorney General for the Department of Justice’s Tax Division. "Taxpayers should be wary of promoters who promise that transferring your income and assets offshore will dramatically reduce or eliminate your federal tax liability."
"The government will not tolerate the use of offshore banking to hide income to evade taxes," said Nancy Jardini, IRS Chief, Criminal Investigation. "Honest, hard-working taxpayers can have confidence that the IRS will hold accountable individuals, regardless of their occupation, who engage in abusive tax evasion schemes."
In April 2005, two promoters of the Tower scheme, Paul D. Harris and Lester R. Retherford, were convicted of conspiracy and willfully aiding and assisting in the preparation of fraudulent tax returns after a trial in Denver. Retherford was sentenced on December 16, 2005 to 48 months in prison and three years of supervised release. On January 18, 2006, Harris was sentenced to five and one-half years in prison, followed by three years of supervised release, Numerous other Tower clients across the country have either pleaded guilty or have been found guilty of tax offenses for engaging in conduct similar to the conduct alleged in the indictment against the Lewises.
Lewis faces a maximum sentence of five years in prison and a $250,000 fine for each of the charges. U.S. District Judge Susan Illston has not yet scheduled a date for sentencing.
Assistant Attorney General O’Connor thanked Tax Division trial attorneys Robert Livermore and Edward Russo who prosecuted the case. She also thanked the special agents and revenue agents of the IRS, whose assistance was essential to the successful investigation and prosecution of the case.