Stephen Thomas of York, Penn., was sentenced today in U.S. District Court for the District of Columbia for tax evasion, the Justice Department and Internal Revenue Service (IRS) announced today. U.S. District Judge Amy Berman Jackson sentenced Thomas to 18 months in prison and ordered him to pay $154,362 in restitution to the IRS.
On Sept. 11, 2012, Thomas pleaded guilty to attempting to evade his 2006 federal income taxes. According to court records, between 2002 and 2004, in the District of Columbia, Thomas formed multiple entities whose names contained the initials 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.
As part of his guilty plea, Thomas admitted that he failed to file his 2005 through 2007 individual income tax returns and failed to file 2005 through 2007 corporate income tax returns for ECG. Thomas further admitted that he engaged in a series of affirmative acts of evasion during 2005 through 2007, including concealing his income by moving earnings from the Maine companies into bank accounts in the name of his wife, withdrawing cash on a weekly basis which totaled more than $400,000, using cashier’s checks, and titling his primary residence in the name of his wife. Thomas further admitted that he failed to report at least $573,785 of income and that his tax evasion during 2005 through 2007 resulted in a tax loss to the IRS of at least $154,362.
Kathryn Keneally, Assistant Attorney General for the Justice Department’s Tax Division, commended the efforts of a special agent of IRS-Criminal Investigation and an investigator from Department of Labor, Employee Benefits Security Administration, who investigated the case, and Trial Attorneys Jessica Moran and Jeffrey Bender of the Justice Department’s Tax Division, who prosecuted the case.