FOR IMMEDIATE RELEASE|
TUESDAY, MARCH 30, 2004
TDD (202) 514-1888
HAWAII CERTIFIED PUBLIC ACCOUNTANT AND DENTIST
SENTENCED TO PRISON FOR TAX EVASION
WASHINGTON D.C. - Eileen J. O’Connor, Assistant Attorney General for the Tax Division, United States Department of Justice; Edward H. Kubo, Jr., United States Attorney for the District of Hawaii; and Nancy Jardini, Chief, Internal Revenue Service Criminal Investigation, announced today that two Honolulu, Hawaii residents were sentenced to prison for their roles in a tax evasion scheme conducted from October 1986 to April 15, 2000.
Victor H. Zuercher, Jr., a dentist, was sentenced to 21 months imprisonment. Peter Paul Virdone, a certified public accountant and income tax preparer, was sentenced to six months imprisonment. In imposing the sentences, the court determined Messrs. Zuercher and Virdone had caused tax losses to the United States and the state of Hawaii totaling approximately $312,000. Mr. Virdone was further sentenced to pay a $12,000 fine. After release from prison, Dr. Zuercher will serve an additional three years, and Mr. Virdone, two years of supervised release.
“People who attempt to hide income and assets from the IRS can and will be prosecuted," said Assistant Attorney General Eileen J. O’Connor. “In dealing with the IRS, honesty is the best policy.”
“The IRS fosters confidence in the American tax system through the investigation and prosecution of individuals and corporations who intentionally conceal income and evade taxes,” stated Nancy Jardini, Chief, IRS Criminal Investigation. “Tax evasion is not a victimless crime. Honest, hardworking Americans pay the price when others choose to evade their tax obligations.”
In October 2003, on the eve of trial, both defendants pled guilty to one count of tax evasion in violation of Title 26, United States Code, Section 7201. As outlined in the respective plea agreements and in court, this evasion-of-payment scheme involved the creation of a nominee entity, O.B., Inc., through which Dr. Zuercher purchased and operated a dental practice. Dr. Zuercher's sister, a chiropractor, and his teenage son were listed as the sole shareholder and president, respectively. Dr. Zuercher admitted he hid income owed to the Internal Revenue Service, falsely attributed $136,000 as salary paid to his teenage son, and caused the filing of false and fraudulent statements with an IRS collection officer, in order to prevent the garnishment of income earned by his dental practice. Mr. Virdone admitted to knowingly aiding the effort to conceal Dr. Zuercher’s income and assets from the Internal Revenue Service and the state of Hawaii by serving as an officer of the nominee corporation, preparing false corporate and individual income tax returns, and falsifying corporate books and records in order to frustrate the efforts of the IRS to collect taxes owed for the calendar years 1985, 1986, 1990, 1993, 1994, 1995, 1996, and 1997.
Tax Division trial attorney Edward E. (Ted) Groves prosecuted the case. Special agents of the Internal Revenue Service also provided essential assistance to the successful investigation and prosecution of this case.