WASHINGTON - Timothy Smith, a resident of Cullman, Ala., was sentenced today to 30 months in prison for tax evasion by Judge R. David Proctor, the Justice Department and Internal Revenue Service (IRS) announced. As part of the plea agreement, Smith agreed to a binding sentence of thirty months in prison and agreed to pay $170,380 in restitution to the IRS, including a lump sum payment of $50,000, which was paid prior to sentencing.
In April 2009, Smith, who is the owner of College Tire in Hanceville, Ala., pleaded guilty to one count of tax evasion. According to the indictment, plea agreement and other court records, Smith diverted customer receipts from his tire business into two personal bank accounts. Smith also used, or directed others to use, cash and cashiers’ checks to make substantial principal payments on the mortgage for his vacation home in North Carolina and his vacation home in Pensacola, Fla. In total, Smith diverted more than $430,000 from his tire business to his personal bank accounts and his mortgages. Smith also purchased real estate in North Carolina near his vacation home with $68,100 in cash.
According to court records, Smith concealed the funds that were diverted to his personal accounts and his mortgages from his bookkeeper, who prepared both Smith’s business tax returns as well as Smith’s joint personal tax returns. Smith also took substantial fraudulent tax deductions for a purported farm at his personal residence. As a result, Smith filed false personal and business tax returns for tax years 2000 through 2003.
Acting Assistant Attorney General John A. DiCicco of the Justice Department’s Tax Division thanked the special agents from IRS-Criminal Investigation who investigated the case, as well as Tax Division trial attorneys Jed M. Silversmith and Matthew J. Mueller, and Assistant U.S. Attorney Michael Whisonant, who prosecuted the case.