FOR IMMEDIATE RELEASE|
THURSDAY, AUGUST 12, 2004
TDD (202) 514-1888
TWO FORMER DETROIT EXECUTIVES
GUILTY OF TAX, CONSPIRACY, AND MONEY LAUNDERING CHARGES
Defendants Participated In Scheme To Hide $6.5 Million In Kickback Payments
WASHINGTON, D.C. - Eileen J. O’Connor, Assistant Attorney General for the Tax Division, Department of Justice, and Jeffrey G. Collins, U.S. Attorney for the Eastern District of Michigan announced today that a jury at the federal courthouse in Detroit, Michigan, returned guilty verdicts on all ten felony counts against Kenneth J. Graham, age 69, and Kyle E. Dresbach, age 68, both of Bloomfield Hills, Michigan on tax, conspiracy, and money laundering charges.
Mr. Graham is the former Chief Executive Officer of Thyssen, Inc., a steel processing company. Mr. Dresbach is the former Executive Vice-President of the same company. They were charged with and convicted of conspiracy to commit mail fraud and to file false tax returns that did not report more than $6.5 million in proceeds of the mail fraud scheme file false tax returns that did not report more than $6.5 million in proceeds of the mail fraud, and conspiracy to launder more than $6.5 million, as well as money laundering, and filing false income tax returns.
Graham and Dresbach each face maximum sentences totaling 71 years imprisonment and $2.25 million in fines, together with costs of prosecution. U.S. District Judge Arthur Tarnow scheduled the sentencings for November 19, 2004. At that time, Judge Tarnow will also rule on whether Graham and Dresbach must forfeit homes in, respectively, Vero Beach, Florida and West Bloomfield, Michigan.
“The convictions of these former corporate executives demonstrate that people who hide income from the IRS are running a serious risk of prosecution and conviction,” said Assistant Attorney General Eileen J. O'Connor. “The IRS and the Department of Justice are working energetically to investigate and prosecute allegations of tax and other kinds of fraud.”
During the trial, the jury heard evidence that Graham and Dresbach conspired with Jerome Jay Allen, 67, of Bloomfield Hills, Michigan, an attorney and CPA, to cause Thyssen to pay inflated prices for cranes from Ranez Equipment and steel slitting machines from Chicago Slitter. The jury also heard evidence that the vendors of the cranes and slitting machines paid the inflated prices as commissions to a consultant, Hurricane Machine, of Lincoln Park, Michigan. Hurricane Machine then paid kickbacks to more than a dozen entities controlled by Mr. Allen. Mr. Allen laundered the funds and used his client trust fund accounts to pay kickbacks to Graham and Dresbach. As part of this conspiracy, Graham and Dresbach also conspired with Mr. Allen to file false individual income tax returns that did not report the kickback payments.
On August 28, 2003, Mr. Allen pled guilty to a charge of conspiracy to commit mail fraud and file false tax returns.
Assistant Attorney General Eileen J. O'Connor and U.S. Attorney Jeffrey G. Collins thanked Tax Division Trial Attorneys John Sullivan, Richard Rolwing, and D. Loren Washburn, who prosecuted the case. They also thanked the special agents of the Internal Revenue Service, whose assistance was essential to the successful investigation and prosecution of the case.
Additional information about the Justice Department's Tax Division and its enforcement efforts may be found at http://www.usdoj.gov/tax.