WASHINGTON – A federal judge in Boston sentenced Kenneth Scott Alcock today to 12 months and a day in prison for tax evasion, and for conspiring to defraud the United States, the Justice Department and the Internal Revenue Service (IRS) announced. United States District Judge F. Dennis Saylor also ordered Kenneth Scott Alcock to pay restitution in the amount of $201,000. Alcock pleaded guilty to the charges on Jan. 24, 2012, and provided substantial assistance to the government in prosecuting the case against the remaining defendants, which the Judge Saylor cited, among other factors, as basis for a reduced sentence.
Alcock testified at a trial of three defendants which resulted in guilty verdicts rendered by a federal jury on April 2, 2012. The jury convicted Charles Adams of Norwood, Mass., as well as Catherine Floyd and William Scott Dion, both of Sanbornville, N.H., for conspiracies to defraud the United States through the promotion and use of multiple tax fraud schemes. The jury convicted all three of conspiracy to defraud the IRS by promoting an “under the table” payroll scheme doing business as Contract America. Dion and Floyd were also convicted for conspiracy to defraud the IRS through the use of an “underground warehouse banking” scheme designed to conceal customer income and assets from the IRS.
According to court documents, Kenneth Scott Alcock was a subscriber to, and assisted his brother, Gary Alcock, in using the services of Dion, Floyd and Adams. According to the indictment and information presented in court, Gary Alcock owned and operated a trash hauling business called G&K Trucking, as well as a landscaping business at the same location in Shrewsbury, Mass., called Bark, Mulch, and Loam.
Between 2001 and 2004, Kenneth Scott Alcock conspired with his brother in helping him set up and implement the banking and nominee services of Dion and Floyd. The Alcocks set up a nominee company called “Alex Management” to divert and hide business receipts, to help Gary Alcock’s businesses fraudulently “disappear” on paper, and, thus, to evade IRS assessments and IRS collection activity. The Alcock brothers further conspired to use the services of Contract America, run by Adams, Dion and Floyd, in order to pay Gary Alcock’s employees “under the table” without withholding and paying over Social Security, Medicare and income taxes.
Kenneth Scott Alcock also pleaded guilty to three counts of tax evasion concerning his own individual taxes. According to the indictment and information presented in court, Alcock evaded his own taxes by using the nominee and warehouse banking services of Dion and Floyd.
Judge Saylor previously sentenced Dion to seven years in prison, Floyd to five years in prison and Adams to four years in prison for promoting these schemes. Judge Saylor previously sentenced Gary Alcock to 14 months in prison.
In August 2009, Kenneth Scott Alcock, along with Dion, Floyd, Adams and three other individuals, were indicted for the promotion and use of these schemes. On Dec. 9, 2011, prior to trial, Gail and Myron Thorick of West Warwick, R.I., pleaded guilty to conspiring to defraud the United States by helping operate the “warehouse banking” scheme, and for filing false tax returns. On Dec. 9, 2012, Gary Alcock pleaded guilty to conspiracy and tax evasion relating to the payroll scheme. The Thoricks are set to be sentenced later this month.
Kathryn Keneally, Assistant Attorney General for the Justice Department’s Tax Division, and Carmen M. Ortiz, U.S. Attorney for the District of Massachusetts, commended the efforts of special agents of IRS - Criminal Investigation, who investigated the case, and Tax Division Assistant Chief John N. Kane, former Tax Division Trial Attorney Jeffrey Shih, and Assistant U.S. Attorney Victor A. Wild, who prosecuted the case.