Federal Grand Jury In San Antonio Returns Tax Related Indictments
In San Antonio today, a federal grand jury returned three indictments charging San Antonio residents with various tax related offenses announced United States Attorney Robert Pitman and Internal Revenue Service–Criminal Investigation Special Agent in Charge Steve McCollough.
The first indictment charges Sampson Delton Cotten with 23 counts of preparing false and fraudulent income tax returns. According to the indictment, Cotton, doing business as SC Financial Consultant Tax Co., knowingly prepared false income tax returns for approximately ten taxpayers from 2007 to 2010 that included fraudulent amounts of business income or loss as well as exemption amounts. Authorities estimate the total loss due to Cotton’s scheme was over $111,000. Upon conviction, Cotton faces up to three years in federal prison per count.
The second indictment charges Mark Schautteet with one count of tax evasion and three counts of making and subscribing a false income tax return. According to the indictment, from 2001 to 2007, the de facto owner and chief executive officer of Forming Services of Texas, Inc.; Forming Systems of Texas, Inc. and Suspended Forms, Inc., did willfully attempt to evade paying federal taxes withheld from employee wages and Federal Insurance Contributions Act (FICA) taxes. The indictment also alleges that Schautteet failed to file Employer’s Quarterly Federal Tax Returns (Form 941) and provided fraudulent information to a tax return preparer thus causing false income tax returns to be filed for tax years 2004, 2005 and 2006 which understated Schautteet’s actual income. The indictment further alleges that Schautteet attempted to hide assets in a trust which he created and used monies from that trust to pay third party debts. Furthermore, the indictment alleges that Schautteet canceled the sale of a parcel of real estate upon which the Internal Revenue Service had placed a lien in an effort to collect the taxes owed. Upon conviction, Shautteet faces up to five years in federal prison for tax evasion and up to three years in federal prison per count for making and subscribing a false income tax return.
The third indictment charges Lapoe Smith, Jr., with one count of tax evasion and four counts of making and subscribing a false income tax return. The indictment alleges that from August 2005 to May 2011, Smith knowingly evaded paying income tax for the calendar year 2005 on $2 million he failed to claim as income.
Upon conviction, Smith faces up to five years in federal prison for tax evasion and up to three years in federal prison per count for making and subscribing a false income tax return.
Assistant United States Attorney William R. Harris is prosecuting these cases on behalf of the Government.
An indictment is merely a charge and should not be considered as evidence of guilt. The defendants are presumed innocent until proven guilty in a court of law.