FOR IMMEDIATE RELEASE:

August 9 , 2001

Norma Estimbo Lacy
Public Affairs Specialist
Phone: 713/567-9388 Fax: 713/718-3389
E-Mail:
usatty.txs@usdoj.gov

FORMER CLEAR LAKE DENTIST CHARGED WITH DEFRAUDING THE IRS

Albert A. Balboni, Assistant U. S. Attorney
Phone: 713/567-9726

(Houston) Gregory A. Serres, U. S. Attorney for the Southern District of Texas, announced today that Dr. Eddi Lee, D.D.S., age 51, was indicted by a federal grand jury for conspiracy to defraud the IRS and for tax evasion.  Lee was charged with one count of conspiracy to defraud the U. S. and four counts of income tax evasion.  Indicted with Lee was her former office manager, Jerry Laws, age 60. Laws, of Houston, was charged with conspiracy to defraud the U. S. and four counts of aiding and assisting the preparation and filing of Dr. Lee's false income tax returns.

The indictment alleges that Lee and Laws defrauded the IRS by impeding the IRS's ability to ascertain, compute, assess and collect the correct income tax owed by Dr. Lee.  It is alleged that Dr. Lee instructed a dental insurance provider, Denticare, to deposit its payments to her for contract dental services to a personal bank account she maintained at NationsBank.   It is alleged that Laws conspired with Lee to provide false monthly deposit summaries of the business account to Lee's accountants which summaries did not include any of the Denticare income.  It is further alleged that neither Lee nor Laws provided the Denticare Forms 1099 to the
accountants who prepared Dr. Lee's income tax returns.  The indictment goes
on to allege that Dr. Lee purchased a Cayman Island Corporation and opened a
Cayman Island account to further the conspiracy to defraud the IRS.  It is alleged that Lee instructed Laws to wire transfer $400,000 from her Nationsbank account to her Cayman Island account.  According to the indictment, Lee filed false personal and corporate income tax returns for 1994 through 1997 which failed to report any of the income earned from Denticare.  

Dr. Lee is charged with evading income tax for each of those years and Laws is charged with aiding and assisting Lee in filing her false personal income tax returns.  It is alleged that Dr. Lee omitted over $460,000 of income from Denticare during the four-year period and evaded approximately $187,000 of tax due on that income. If convicted, Lee and Laws each face a possible sentence of five years imprisonment, three years supervised release, and a fine of $250,000. This case was investigated by Special Agents of the IRS and is being prosecuted by the U. S. Attorney's Office.

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