Owner And Corporate Officer Of Sumiton Business Pleads Guilty To $350,000 Tax Fraud
BIRMINGHAM – A Dora woman pleaded guilty today in federal court to tax fraud of nearly $350,000 at the medical clinic she managed and partly owned in Sumiton, announced U.S. Attorney Joyce White Vance and IRS Criminal Investigation Special Agent In Charge Reginael D. McDaniel
CAROL LYNN TWILLEY, 43, pleaded guilty before U.S. District Judge Inge P. Johnson to charges that she failed to truthfully account for and pay to the Internal Revenue Service the federal income taxes withheld and Federal Insurance Contributions Act taxes due the United States on behalf of Horse Creek Family Medicine Inc. and its employees between 2003 and 2005.
“As the prosecution of Ms. Twilley shows, individuals who intentionally disregard their tax obligations will be held accountable,” Vance said. “This office is committed to aggressively pursuing and prosecuting criminals who ignore their responsibilities and undermine the tax system for their own personal gain.”
“Public trust in the United States tax system is the cornerstone of maintaining its integrity,” McDaniel said. “In exchange for the public trust, taxpayers expect that those who violate the tax system will be held accountable. IRS Criminal Investigation is committed to seek out those who violate our tax laws and pursue criminal prosecution against them,” he said.
From 2003 to 2005, Twilley was an owner and corporate officer of Horse Creek Family Medicine. During this time, the clinic withheld Social Security and Medicare taxes from its employees, but did not file quarterly returns, pay over the collected taxes, or pay its own share of such federal taxes.
As a result of Twilley’s conduct, the clinic failed to account for and pay about $235,503 which was withheld from Horse Creek’s employees from the second quarter of 2003 through the fourth quarter of 2005. The clinic also failed to make its matching payroll tax payments of about $105,038, from the second quarter of 2003 through the fourth quarter of 2005.
Both the taxes withheld from an employee’s wages and the employer’s share of such taxes are required by federal law to be reported and paid to the IRS on a quarterly basis. Federal law holds criminally liable those individuals responsible for a business’ failure to accurately report and pay over withholding taxes to the IRS.
Twilley will pay $340,542 in restitution to the IRS, according to her plea agreement. She faces a maximum sentence of five years in prison and a fine of up to $250,000. She is scheduled for sentencing in August.
The IRS Criminal Investigation Division investigated this case. Assistant U.S. Attorneys Lloyd Peeples and Elizabeth Holt are prosecuting it.
Twilley’s case is among a number of tax-related fraud cases being pursued by IRS criminal investigators and federal prosecutors in the Northern District of Alabama. Recent tax cases prosecuted in this district include:
• On March 14, Michael O. Dumas, 42, of Birmingham, was sentenced to 21 months in prison for conspiring with Kasanta Stewart, 30, of Montgomery, to file false tax returns. Dumas and Stewart pleaded guilty in June 2010 to conspiring to use stolen identities in order to generate more than $127,000 in false tax refunds. Dumas was ordered to pay $45,489 in restitution to the IRS. Stewart was sentenced in September 2010 to serve seven months in prison and was also ordered to pay restitution of $45,489 to the IRS.
• On Feb. 24, Arnold L. Benedict, 35, of Hueytown, was charged with conspiracy to defraud the United States, with making false claims against the United States, and with aggravated identity theft during 2008 and 2009 while he owned and operated Benedict Tax Service and Ajari Tax Service. According to the indictment, Benedict carried out his scheme by entering into refund anticipation loan agreements with a bank to have refunds from the fraudulent returns deposited into an account he controlled. Many of the taxpayers had their names, Social Security numbers and dates of birth stolen from them and used by Benedict to effect his fraud against the government.
• On Jan. 27, Ina Standberry, 53, of McCalla, was sentenced to six months in prison and six months home detention for filing false tax returns and ordered to pay back taxes of $137,018. Standberry had pleaded guilty to two counts of filing false tax returns in September 2010, which under-reported her income for 2003 and 2004 by $441,183. Standberry owned Standberry & Associates, a Birmingham income tax and accounting business, and was a branch manager at a Birmingham mortgage company in 2003 and 2004 when she filed false tax returns for those years.
• On Jan. 13, Latosha Shuron Madison, 39, of Birmingham, was sentenced to five years probation for aiding in the preparation and presentation of tax return documents containing fraudulent information. Madison, a former tax preparer, was ordered to pay restitution to the IRS totaling $23,900. Madison was convicted of the charges Aug. 30, 2010.
• On Dec. 1, 2010, Stacia Gaines Woodman, 36, of Leeds, was indicted on charges including mail fraud and tax fraud. The tax charges stemmed from Woodman embezzling $298,126 from J. Loper and Company, a Birmingham landscaping business, where Woodman was employed as the company bookkeeper. Woodman used company checks to pay personal expenses from 2006 to 2009, and failed to report more than $190,000 of the embezzled funds as income to the IRS. Woodman pleaded guilty to the charges Feb. 2, and is scheduled to be sentenced May 18.
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