FOR IMMEDIATE RELEASE|
FRIDAY, FEBRUARY 18, 2005
TDD (202) 514-1888
THREE DEFENDANTS IMPRISONED FOR TAX FRAUD CONSPIRACY
Trio Promoted Warehouse Banking Scheme to Hide Income and Assets
WASHINGTON, D.C. - Eileen J. OConnor, Assistant Attorney General for the Justice Departments Tax Division, and U.S. Attorney Karin J. Immergut announced today that at the federal courthouse in Portland, Oregon, U.S. District Judge Garr M. King sentenced Richard George Flowers, Dorothy Lenore Flowers and Jeffrey Allen Weakley for tax violations. Judge King sentenced Mr. Flowers, of Sandy, Oregon, to 50 months in prison; Mrs. Flowers to 3 years probation; and Mr. Weakley, of Portland, Oregon, to 30 months in prison.
On June 7, 2002, all three defendants were convicted on charges of conspiracy to defraud the IRS and related tax offenses. All were associated with the so-called Christian Patriot Association, a warehouse bank located in Boring, Oregon. These defendants were resentenced today after a lengthy appeal process.
According to the trial evidence, defendants Mr. and Mrs. Flowers founded the Association, and along with Jeff Weakley, operated it from its headquarters in Boring. The Association provided anonymous banking for 900 members nationwide and handled deposits totaling over $186 million. Evidence at trial proved the existence of a conspiracy that involved a nationwide web of financial transactions that took place between March 1986 and July 2000. The scheme enabled members - including co-defendants John Anderson, Ronald Stacey and Dr. Dan Romaine Kirkham - to conduct banking transactions anonymously by using numbered accounts that were commingled in a single commercial bank account.
Association members sent deposits of checks, cash, money orders, and cashiers checks to the Association. The deposits of all members were commingled into commercial bank accounts held in the name of CPA Services in Oregon and Arizona. The Association then paid bills for and mailed cash wrapped in aluminum foil to Association members. As a result, the banking transactions of Association members were virtually untraceable.
Testimony at trial established that the Association mailed over $10 million in cash to its members. The defendants used multiple aliases and false Social Security numbers to facilitate the scheme.
Defendant Jeff Weakley admitted during the trial that he forged the family tree in a Bible he bought at a second-hand bookstore as proof of identity in order to get a false Social Security number under an alias. The evidence at trial showed that Dorothy Flowers, a notary for the State of Oregon, notarized the aliases for Association members, including defendants Richard Flowers, Jeff Weakley, and co-defendant John Anderson. The evidence also established that the Flowers have not filed federal income tax returns since 1982, and Jeff Weakley has not filed income tax returns since 1985. Co-defendant John Anderson is currently serving a 24-month sentence. On February 28, 2005, Dr. Dan Romaine Kirkham is scheduled to report to the Bureau of Prisons to begin serving a 30-month jail sentence. The case against Ronald and Elicia Stacey is on appeal.
Assistant Attorney General Eileen J. OConnor thanked Tax Division Trial Attorneys Jen E. Ihlo and Melissa Schraibman, who prosecuted the case. She also thanked the special agents of the IRS, whose assistance was essential to the successful investigation and prosecution of the case.
Additional information about the Justice Departments Tax Division and its enforcement efforts may be found at www.usdoj.gov/tax.