July 20, 2001

(410) 209-4854


Stephen M. Schenning, United States Attorney for the District of Maryland, Vicki Duane, Special Agent In Charge, Internal Revenue Service, Criminal Investigation, and John Wanat, Resident Agent In Charge, Treasury Inspector General for Tax Administration, Baltimore Office, announced that Leon M. Lane, Jr., age 58, of East New Market, Dorchester County, Maryland, pled guilty today to one count of preparing false income tax returns. The maximum punishment for the count to which Mr. Lane pled guilty is three years imprisonment and a fine of $250,000 per count. Sentencing has been scheduled for October 2, 2001, before U.S. District Judge Andre M. Davis.

According to a Statement of Facts presented by Assistant United States Attorney Joseph L. Evans, Mr. Lane prepared false returns for a number of clients in tax years 1995, 1996, and 1997.

The Statement of Facts indicated that Mr. Lane operated a tax preparation and accounting service out of East New Market, Dorchester County, Maryland. Although he advertised himself as a certified public accountant, his certificate had expired in 1981. He typically charged between $40 to $80 per tax return. He was the only return preparer in his office, and he prepared about 1400 returns annually in 1995 and 1996. He prepared about 1,000 returns in 1997.

According to the Statement of Facts, the clients for whom false returns were prepared were typically self-employed individuals who were not sophisticated in tax matters. These taxpayers were required to declare business income and expenses on their own individual returns on what is known as a "Schedule C." Without the knowledge of the clients, Mr. Lane would place understated gross receipts or inflated business deductions on the Schedule C. According to the Statement of Facts, the Internal Revenue Service interviewed 12 sets of clients concerning 24 separate reruns prepared by Mr. Lane during the time period of 1995 through 1998 (relating to tax years 1994 through 1997). As to those 24 returns, by reason of the income that was understated or the expenses that were inflated, those clients underpaid their taxes by approximately $177,000.

The case was investigated by special agents of the IRS Criminal Investigation, in Salisbury, Maryland, and agents of the Treasury Inspector General for Tax Administration in Baltimore. It is being prosecuted by Assistant United States Attorney Joseph L. Evans.

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