WASHINGTON - Bruce Lapierre, of Pascoag, R.I., and Albert Martin and Lorraine Martin, both of Woonsocket, R.I., were convicted of conspiracy to defraud the United States and tax evasion following 2 hours of deliberations and an 8-day trial before Chief Judge Mary M. Lisi in Providence, R.I., the Justice Department and Internal Revenue Service (IRS) announced today.
Lapierre, Albert Martin and Lorraine Martin, who were indicted in June 2008, were each convicted of one count of conspiracy to defraud the United States and two counts of tax evasion for years 2002 and 2003.
According to the indictment and evidence introduced at trial, Lapierre and the Martins used a series of ruses to conceal their income and avoid paying taxes. From 1997 to 2004, Lapierre and Albert Martin operated Classic Machine in Woonsocket. The two men engaged in an elaborate scheme to conceal from the IRS income that they earned through Classic Machine, and thus avoid paying taxes on that income. Rather than open business accounts for depositing business receipts and income, they allegedly used the personal account of Lorraine Martin to conceal business receipts, as well as an anonymous "private" banking service designed to conceal income from the IRS.
The evidence at trial also showed that in order to further conceal their assets and income from the IRS, Lapierre and Albert Martin used multiple business names, such as Banner Technologies, Circle Machine, Preferred Enterprises and Royal Enterprises, to conduct the machine shop business. The defendants also made extensive use of cash and money orders. For example, they allegedly cashed checks under $10,000 in order to avoid federal Currency Transaction Reports, which are required for currency transactions of $10,000 or more.
According to the indictment and evidence introduced at trial, Bruce Lapierre tried to obstruct an IRS investigation of the machine shop's income by renaming business assets by sending false and frivolous letters to the IRS claiming he was not required to file tax returns or pay taxes, and by directing a financial institution not to comply with an IRS summons for records.
Chief Judge Lisi scheduled sentencing for July 9, 2009. Each defendant faces a maximum of fifteen years in prison and a maximum fine of $750,000 fine.
Acting Assistant Attorney General John A. DiCicco commended the IRS Special Agents who investigated the case, as well as Tax Division trial attorneys John Kane and Jorge Almonte who prosecuted the case.
More information about the Justice Department’s Tax Division and its enforcement efforts is available at http://www.usdoj.gov/tax/.