States Attorney's Office District of Connecticut
|August 3, 2010||
EASTON MAN PLEADS GUILTY TO TAX FRAUD CHARGES
David B. Fein, United States Attorney for the District of Connecticut, announced that JAMES L. McCARTHY, 62, of Adirondack Trail, Easton, waived his right to indictment by a grand jury and pleaded guilty today before Senior United States District Judge Ellen Bree Burns in New Haven to federal tax fraud charges.
According to court documents and statements made in court, McCARTHY controlled two companies located in Stratford, American Boiler, Inc. (“AB”) and Industrial Property Management (“IPM”). AB maintained, repaired and occasionally installed industrial boilers, and IPM maintained the Stratford Army Engine Plane under a contract with the U.S. Army.
Between 1999 and 2002, checks received by AB for work it performed for its customers were deposited to the IPM checking account, either by McCARTHY or at his direction. The income represented by those payments was never recorded in the books of AB, nor was it reported on AB’s federal corporate tax returns for those years.
Today, McCARTHY pleaded guilty to one count of aiding and assisting in the preparation of AB’s federal tax return for 2000, which was fraudulent. The return, which was filed on September 5, 2001, showed gross receipts of $1,106,406 and taxable income of $30,808. McCARTHY assisted in the preparation of that tax return, fully aware that gross receipts and taxable income were significantly understated.
McCARTHY also pleaded guilty to one count of making and subscribing a false tax return for failing to report income on his 2000 personal tax return, as the AB income that went into the IPM checking account was used by McCARTHY for his own benefit and for the benefit of members of his family.
Judge Burns has scheduled sentencing for October 22, 2010, at which time McCARTHY faces a maximum term of imprisonment of six years and a fine of up to approximately $974,099. McCARTHY also must pay taxes due on both AB income and his personal income.
This matter was investigated by the Internal Revenue Service – Criminal Investigation and the U.S. Army Criminal Investigation Division. The case is being prosecuted by Assistant U.S. Attorneys Calvin B. Kurimai and Anastasia E. King.
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