FOR IMMEDIATE RELEASE
October 28, 2002
PATRICK T. ROLLINS SENTENCED FOR TAX FRAUD
DENVER – United States Attorney John W. Suthers, Special Agent In Charge James D. Vickery, IRS-Criminal Investigation, Denver Field Office, and Manuel Cobos, Postal Inspector In Charge, U. S. Postal Inspection Service, Rocky Mountain Division announced that PATRICK T. ROLLINS, age 46, of Denver, Colorado, was sentenced October 24, 2002 by U.S. District Court Judge Walker D. Miller to 5 months in prison and 5 months of home detention for tax fraud.
ROLLINS pleaded guilty on July 25, 2002 in U.S. District Court, to making a false tax return and aiding and causing the preparation of a false tax document in violation of federal tax laws. According to the plea agreement, from about September 1996 through about July 1997, ROLLINS and a confederate were involved in a scheme to defraud stock brokerage firms and stockbrokers, and to evade payment of federal income taxes. ROLLINS induced stockbrokers to open numerous stock trading accounts in fictitious names using false social security numbers, false annual income figures, false net worth valuations, and false occupation information. The false social security numbers were provided to the brokers on IRS Forms. By using the false social security numbers, ROLLINS concealed his true identity from the brokerage firms and forestalled the reporting of their income to the IRS. The brokerage firms required a deposit to open a new account, so ROLLINS tendered insufficient funds checks or checks drawn on closed accounts, but directed the brokers not to cash the checks.
ROLLINS then would order the purchase of initial public offering (IPO) shares. If the IPO share immediately rose in value, ROLLINS would order the sale of his shares, send the broker good funds to pay for the purchase, and keep the profits from the quick sale of the shares. If the IPO shares did not rise in value or fell in value, then ROLLINS would abandon the transaction, leaving the broker and the brokerage firm with a worthless check and the shares of IPO stock.
During 1997, ROLLINS received $83,345 in investor income from the stock scheme. ROLLINS signed and filed his 1997 IRS Form 1040 in November 2000, from Colorado, and falsely reported $4,000 of self-employment investor income on line 1 of Schedule C and line 12 of his Form 1040. This resulted in a tax of $565, and, due to an earned income credit, ROLLINS claimed a refund of $702. With his income of $83,345 from the sale of stocks, ROLLINS' tax due would have been $26,753.
On January 6, 1997, ROLLINS and a confederate opened a stock trading account with W.S. Clearing. ROLLINS provided W.S. Clearing a false social security number. When trading in that account produced a gain of $21,185, W.S. Clearing reported the gain to the IRS under the false social security number. ROLLINS did not report that income on this 1997 tax return.
“Those who seek to deceive the public through fraudulent investment practices are subject to aggressive criminal prosecution,” United States Attorney John W. Suthers said.
“The IRS-Criminal Investigation helped unmask the person’s true identity in this case by tracing funds generated from the scheme to the tax documents involved,” said James D. Vickery, Special Agent in Charge, Denver Field Office.
“This case represents The U. S. Postal Inspection Service’s continued vigilance to protect the public from fraudulent investor practices such as those involved in this case,” said Manuel Cobos, Inspector In Charge, U. S. Postal Inspection Service, Rocky Mountain Division.
This case was prosecuted by John M. Harried, Assistant United States Attorney, and was assisted by Special Agents of the IRS-Criminal Investigation, and Inspectors from the U. S. Postal Inspection Service.
For more information about Tax Fraud see http://www.treas.gov/irs/ci.
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