Donald R. Megginson, a former resident of Alexandria, Va., pleaded guilty to corruptly endeavoring to obstruct and impede the due administration of the Internal Revenue laws, the Justice Department and Internal Revenue Service (IRS) announced today. Sentencing is scheduled for Aug. 22, 2012.
According to the plea agreement and statement of facts, Megginson formed D & B Tours Inc. at the suggestion of his longtime friend, Robert Turner. D & B Tours was a tour bus company. Megginson was in charge of the company’s paperwork and finances and Turner drove the tour bus, “Blue Ice.” Megginson, along with Turner and at least one other person, participated in a scheme to file false corporate income tax returns for 2001, 2002 and 2003 for D & B Tours with the IRS in order to get money from the government to which they were not entitled. These corporate returns claimed false refunds of more than $177,000 based upon fraudulently inflated federal fuel tax credits. Megginson received $70,000 as his share of the fraudulent refunds and he distributed the remaining monies to Turner and the other individual.
According to the court documents, Megginson also admitted that he failed to timely file tax returns in 1999 through 2006, despite receiving various notices from the IRS. When Megginson ultimately filed his 1999 through 2006 tax returns, he did not include payment for any taxes due, despite his owing substantial income tax for each of those years. Megginson also omitted from his 2004 tax return his share of the fraudulent proceeds that he had received from his role in the scheme to obtain false tax refunds. Megginson further admitted that, in October 2007, he filed an Offer in Compromise (OIC) with the IRS seeking to settle his individual income tax liability. Megginson admitted that he falsely stated that he had insufficient assets and income to pay his $60,000 tax liability and falsely omitted from the OIC a bank account he had with $600,000 in readily available funds from which he could pay his tax liability.
Megginson faces up to three years in prison, one year of supervised release, restitution and a fine of up to $250,000. Robert Turner previously pleaded guilty to corruptly endeavoring to obstruct and impede the due administration of the Internal Revenue laws and was sentenced on Aug. 12, 2011 to five years’ probation and $18,200 in restitution to the IRS.
Kathryn Keneally, Assistant Attorney General for the Justice Department’s Tax Division commended the investigative efforts of the IRS agents involved in this case, as well as Tax Division Trial Attorneys Caryn Finley and Jack Hinton, who are prosecuting the case on behalf of the United States.
More information about the Tax Division and its enforcement efforts is available at www.usdoj.gov/tax/.