FOR IMMEDIATE RELEASE
Wednesday, October 5, 2011
For Information Contact:
Maryland Sports Manager Sentenced to Three-Year Prison Term
For Tax Evasion, Conspiracy to Commit Bank and Wire Fraud
- Admitted to Evading More Than $1 Million in Taxes -
WASHINGTON - Nathan A. Peake, 41, a sports manager and resident of Silver Spring, Md., was sentenced today to three years in prison after earlier pleading guilty to one count of tax evasion and one count of conspiracy to commit bank and wire fraud.
The sentencing was announced by U.S. Attorney Ronald C. Machen Jr., Principal Deputy Assistant Attorney General John A. DiCicco of the Department of Justice’s Tax Division, Jeannine A. Hammett, Acting Special Agent in Charge of the Washington, D.C. Field Office of the Internal Revenue Service-Criminal Investigation, D.C. Office of Tax and Revenue Deputy Chief Financial Officer Stephen M. Cordi, and U.S. Department of Commerce Inspector General Todd J. Zinser.
The Honorable Ricardo M. Urbina sentenced Peake in the U.S. District Court of the District of Columbia. The judge rejected Peake’s request for probation in the case, saying that would send the wrong message to the community. Peake also will be required to pay restitution to the IRS, at an amount to be determined later by the Court. The government has requested an order of restitution to the IRS in the amount of more than $1.4 million. Peake will also be required to pay restitution to the lending institutions harmed by his fraudulent conduct and forfeit an equal amount, $253,978.37, in the form of a money judgment to the government.
Peake pled guilty to the charges in March 2011. According to court documents, Peake has managed professional basketball players and boxers since 1999 under the name Peake Management Group, Inc. (PMG). Peake did not file income tax returns for the years 2000 through 2007, despite earning significant amounts of income over that period of time.
Between 2000 and 2007, Peake diverted approximately $5,836,940 in management and agent fees from his business to personal bank accounts or commercial bank accounts that he controlled in names other than PMG. Peake committed numerous affirmative acts of evasion, including misappropriating proceeds from a $3.5 million commercial line of credit that one of his client athletes guaranteed and ultimately paid off, paying himself and his wife out of those commercial bank accounts that he controlled in names other than PMG, using cash to pay personal and business expenses, withdrawing cash in amounts less than $10,000 (an amount greater would have required banks to file currency transaction reports), and paying personal expenses with business receipts.
In total, Peake admitted to evading in excess of $1 million in income taxes.
In addition, Peake and others conspired to provide false information to several mortgage lenders over a nine-year period regarding Peake’s employment, income, rental receipts, and obligations to the federal government. This included fabricated letters that falsely represented that Peake had filed federal income tax returns, reporting self employment wages, which had been reviewed by a certified public accountant.
A co-defendant in the case, Gregory L. McCormick, 58, also of Silver Spring, was convicted by a jury in June 2011 of conspiracy, bank fraud, wire fraud, aggravated identity theft, and obstruction of justice. He is to be sentenced Thursday, October 6, 2011.
“Nathan Peake’s efforts at tax evasion were much less successful than the careers of the professional athletes he managed,” said U.S. Attorney Machen. “He didn’t file tax returns for eight years, and has now admitted to evading more than $1 million owed in taxes. Today’s sentence sends the unmistakable message that everyone – especially those bringing in millions in income – must pay their fair share.”
“Paying taxes is a solemn obligation of citizenship,” said Acting Special Agent in Charge Hammett. “Those who hide income and evade taxes undermine our democracy."
“Paying taxes is a civic responsibility,” said Deputy Chief Financial Officer Cordi. “The District depends on the collection of taxes to pay for everything from public safety initiatives, better education programs, and economic development, to feeding the hungry, helping senior citizens, and youth development. We cannot allow non-compliance of tax returns and will seek to halt any fraudulent behavior.”
U.S. Attorney Machen, Principal Deputy Assistant Attorney General DiCicco, Acting IRS Special Agent in Charge Hammett, D.C. Deputy Chief Financial Officer Cordi, and Inspector General Zinser praised the efforts of the many individuals from the Internal Revenue Service - Criminal Investigation, District of Columbia Office of Tax and Revenue, and Department of Commerce Office of the Inspector General who investigated the case. They also praised those who worked on the case from the U.S. Attorney’s Office, including Assistant U.S. Attorney Diane Lucas, who is handling forfeiture issues, Legal Assistant Jared Forney and Paralegal Tasha Harris. In addition, they commended Paralegal Specialist Lauren Jaffe from the Tax Division.
Finally, they acknowledged the efforts of Assistant U.S. Attorney Susan Menzer and Department of Justice Trial Attorney Sean Delaney, who prosecuted this matter.