Stephen Thomas of York, Pa., was arrested on charges of attempted tax evasion, the Justice Department and Internal Revenue Service (IRS) announced today. On April 4, 2012, a federal grand jury in the District of Columbia returned an indictment charging Thomas with three counts of attempted evasion of his personal income taxes. The indictment was unsealed following Thomas’s arrest.
According to the indictment, in 2004, in the District of Columbia, Thomas formed multiple entities whose names contained the acronym ECG, which stood for ESOP Capital Group. ECG purported to provide financial, business and other management services to companies that were interested in creating ESOPs, which are employee stock ownership plans. In or about 2005 and 2006, Thomas, through ECG, contracted to provide such services to two companies in Maine.
The indictment further alleges that, despite earning income, Thomas did not file his 2005 through 2007 individual income tax returns. In addition, he allegedly evaded assessment of his individual income tax liabilities for those years by diverting cash from the two companies he contracted with in Maine, using nominee bank accounts, titling assets in his spouse’s name and withdrawing substantial amounts of cash.
If convicted, the defendant faces a potential maximum sentence of five years in prison and a maximum fine of $250,000 on each count.
This case was investigated by IRS-Criminal Investigation and is being prosecuted by Trial Attorneys Jessica Moran and Jeffrey Bender of the Justice Department’s Tax Division.