FOR IMMEDIATE RELEASE:
Monday - October 15, 2001
GREENVILLE - United States Attorney John Stuart Bruce announced that CHARLES JAMES PAYTON was convicted in federal court here on Friday, October 12, 2001, of seven counts of willfully aiding and assisting in the preparation of false income tax returns and one count of conspiracy.
Testimony presented during his jury trial showed that PAYTON, of Greenville, N. C., operated a tax return preparation business from his office in the Lang's Crossroads Food Mart in Farmville, N. C. Witnesses testified that they met with PAYTON and his cousin, Ollie Maye III, at this location after learning that PAYTONwas preparing amended federal income tax returns that generated additional refunds. Evidence showed that these amended tax returns included false claims for additional medical expenses, charitable contributions, and employee job expenses. Witnesses also testified that they were to pay PAYTON either directly or through his company, Solid Rock Enterprises, a percentage of the refund amounts, usually 10%, as a fee for the preparation of the amended tax returns. Evidence showed that in one instance, PAYTON received a fee of more than $4,000.00 for preparing a return claiming a false $16,000.00 refund. Witnesses said PAYTON assured his clients that he knew the tax laws, because he had been an employee of the Internal Revenue Service. PAYTON admitted in court, however, that he had never been employed by the IRS.
Ollie Maye III, also of Greenville, testified that he was hired by PAYTON and prepared amended tax returns upon instruction from PAYTON. Maye also testified that PAYTON instructed him to prepare the amended tax returns by inflating itemized deductions through a calculation based upon the client's adjusted gross income. He added that he and PAYTON prepared these amended returns without concern for the actual expense amounts paid by the taxpayers.
The investigation of this case, conducted by the Criminal Investigation Division of the Internal Revenue Service, resulted after a client met with PAYTON and questioned the amended returns prepared for him, as well as PAYTON's claims of prior employment by the IRS.
U. S. District Judge Malcolm J. Howard has scheduled PAYTON'ssentencing for January 7, 2002 in Greenville. He could receive a maximum sentence of 26 years imprisonment, a fine of $2,000,000.00, and a supervised release term of three years.
Ollie Maye III pled guilty on May 15, 2001 to one count of aiding and assisting in the preparation of false income tax returns. He could face a maximum sentence of three years imprisonment, a fine of $250,000.00, and a supervised release term of one year. His sentencing is set for November 13, 2001 in Greenville.
Michael J. Thomas, Special Agent in Charge of the IRS/CID, stated that this conviction serves as a reminder that taxpayers should be wary of anyone who claims to have the ability to generate significant tax refund amounts, especially if the preparation fees are based on a percentage of the refunds generated by the returns. He added, "The IRS shares information about correct return preparation with all tax preparers and members of the public. The IRS will also provide assistance to taxpayers in the preparation of their own accurate returns." For additional information about IRS/CID, see their web site at www.ustreas.gov/irs/ci and report fraud by contacting IRS/CID at 1-800-829-0433.
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