Virginia Couple Pleads Guilty to Tax Fraud Conspiracy
WASHINGTON – Kathryn Charles Miles and husband John Scott Miles, of Mathews County, Va., pleaded guilty to conspiring to impair and obstruct the IRS in the ascertainment and assessment of federal income taxes from 2001 through 2010.
The pleas were announced by U.S. Attorney for the Eastern District of Virginia Neil H. MacBride, Principal Deputy Assistant Attorney General for the Justice Department’s Tax Division John A. DiCicco and the Internal Revenue Service (IRS).
Kathryn Miles, who was charged in October 2010, pleaded guilty March 19, 2011, before U.S. District Judge Raymond A. Jackson in Norfolk, Va. John Miles pleaded guilty today.
At her plea hearing, Kathryn Miles admitted to earning taxable income as a nurse at various Virginia hospitals and with her husband, as an owner and operator of a construction business named “Scotts Construction” and “KCM Construction & Design.” Kathryn Miles and John Miles admitted that in 2001 they joined American Rights Litigators, a business they knew sold and promoted abusive tax schemes, and maintained an annual membership. Kathryn Miles also admitted that, in 2005 and 2006, she submitted six tax returns to the IRS in which she falsely claimed that she earned no wages and in which she did not disclose the operation of her construction business. Kathryn Miles submitted falsified tax documents with each tax return she filed with the IRS and John Miles admitted that he did not file tax returns for tax years 2004 and 2005, despite being required to do so by law.
Judge Jackson released the defendants on bond pending sentencing. Kathryn Miles’s sentencing is scheduled for June 30, 2011 and John Miles’s sentencing is scheduled for July 11, 2011. Both defendants face a maximum potential penalty of five years in prison and a $250,000 fine, and both defendants have agreed to pay all taxes, interest and penalties.
U.S. Attorney MacBride and Principal Deputy Assistant Attorney General DiCicco commended the investigative efforts of the IRS agents involved in this case, as well as Assistant U.S. Attorney Brian Samuels and Tax Division Trial Attorney Justin Gelfand, who are prosecuting this case on behalf of the United States.
Additional information about the Justice Department’s Tax Division and its enforcement efforts may be found at www.usdoj.gov/tax.