Tax Defier Chester Evans Davis Sentenced to 97 Months in Prison
PORTLAND, Ore. — U.S. District Court Judge Michael Simon today sentenced Chester Evans Davis, 56, of Oregon City, to 97 months in federal prison, to be followed by three years of supervised release. In March 2013, a federal jury convicted Davis of five counts of tax evasion, four counts of failure to file a corporate tax return, and one count of obstructing the internal revenue laws. At the sentencing hearing, the government presented evidence that Davis currently owes over $7 million in state and federal income taxes, and Judge Simon ordered Davis to pay his taxes and to file timely tax returns in the future.
“This defendant took extraordinary measures to hide his money,” said U.S. Attorney S. Amanda Marshall. “He refused to pay his fair share of taxes, to the detriment of all taxpayers, but now he will be repaying his debt to society for a very long time.”
“There are a number of strategies we often see people use when they try to get away with tax evasion,” said Kenneth J. Hines, Special Agent in Charge of IRS Criminal Investigation in the Pacific Northwest. “Mr. Davis tried a lot of them. He filed frivolous lawsuits, false documents with the IRS, and false and harassing claims against IRS personnel. He used alternative ‘banks’ to conceal his finances and nominees to disguise his business activities. These strategies all have one thing in common - they result in criminal conviction.”
Davis is the former owner and president of ESA International (formerly ESA NW, Inc.), a Gladstone engineering firm specializing in power system software. Davis’ company earned millions of dollars in annual revenue, including revenue from federal government agencies such as the U.S. Air Force, the Army Corps of Engineers, and Bonneville Power Administration. Davis transferred money from his company to various shell corporations and a warehouse bank, and then used the money to purchase more than $5 million in gold bars and coins. In response to the IRS audit, Davis sought to harass IRS employees, by filing arrest warrants against them, by filing liens, and by filing bogus Forms 1099-OID representing that he had paid income to IRS employees, as well as others.
Special Agents with Internal Revenue Service (IRS) Criminal Investigation seized over $1 million of Davis’ gold while executing search warrants at Davis’ residence and business, but the unaccounted-for gold is worth more than $7 million. While executing search warrants, IRS Criminal Investigation Special Agents found and seized over $1 million of Davis’ gold and approximately $115,000 in cash, much of which Davis hid in Bazooka tubes in his and a family member's home. In Davis' home, agents also found thirty-nine firearms, body armor, tactical gear, sniper training materials, survival manuals, and anti-government literature.
This case stemmed from an investigation by Internal Revenue Service Criminal Investigation. The case was prosecuted by Assistant U.S. Attorneys Craig Gabriel and Stacie Beckerman.