FOR IMMEDIATE RELEASE|
WEDNESDAY, OCTOBER 18, 2006
TDD (202) 514-1888
TWO BUSINESSMEN INDICTED IN HOUSTON FOR TAX FRAUD
WASHINGTON, D.C. - Two businessmen, Richard D. Davis and Madison Lee Oden, have been charged with operating a tax fraud scheme according to the indictment which was unsealed today, the Justice Department announced.
A federal grand jury in Houston issued the indictments on Oct. 4, 2006, which charges the two with one count of conspiracy to defraud the Internal Revenue Service (IRS). It also charges Oden with four counts of filing false tax returns for 1999 to 2002 and charges Davis with four counts of aiding in the preparation of the same false tax returns.
According to the indictment, Davis prepared tax returns and provided financial services for clients out of his home in Spring, Texas. He performed these services under various business names, including R. D. Davis & Associates, R. D. Davis Investments, and Financial Management Services. He also ran a skydiving business known as Skydive Houston, located in Waller, Texas. Davis allegedly ran the skydiving business through various partnerships, including Skydive Houston LLC, Skylakes Aviation LLC, and Aircraft Aloft LLC.
Madison Lee Oden, a former executive for an automotive dealership in Houston, allegedly used Davis to prepare his tax returns and to provide other financial services dating back to at least 1991. Davis allegedly set up the M. Lee Oden Family Limited Partnership (FLP) through which Oden purports to manage property and assets.
For tax years 1998 through 2002, Oden made purported partnership investments to Davis in the amount of $339,325, in exchange for substantial purported partnership losses that he claimed on his income tax returns. Davis and Oden allegedly used the false partnership losses relative to the skydiving business partnerships and the Oden FLP to fraudulently reduce Odens reported income on his income tax returns. Davis and Oden also allegedly knowingly caused Odens tax returns to report false losses derived from a purported sole proprietorship. The indictment alleges that for the tax years 1998 through 2002, Oden reported wages totaling $3,982,955 but claimed false partnership losses totaling approximately $2,709,341 and false sole proprietorship losses totaling approximately $102,996. Because of these fraudulently claimed losses, Oden allegedly underpaid his 1998 through 2002 income taxes by approximately $1,000,000.
The case was investigated by attorneys from the Department of Justices Tax Division, with the assistance of the IRS, Criminal Investigation Division. Additional information about tax fraud schemes to watch out for may be found on the IRS Criminal Investigation website http://www.ustreas.gov/irs/ci. Additional information about the Justice Departments Tax Division and its enforcement efforts may be found at http://www.usdoj.gov/tax.
The charges contained in the indictment are only allegations. A person is presumed innocent unless and until he or she is proven guilty in a court of law.