May 13, 2009
For more information contact:
Supervisory AUSA Karen Rhew-Miller
(850) 942-8430
FORMER INVESTMENT ADVISOR PLEADS GUILTY TO BANKRUPTCY, TAX FRAUD
TALLAHASSEE -- Thomas F. Kirwin, United States Attorney for the Northern District of Florida, today announced that Don W. Reinhard, 48, a former Tallahassee investment advisor, entered guilty pleas in United States District Court in Tallahassee to seven criminal offenses involving making a false loan application, bankruptcy fraud, making false statements, and filing false tax returns.
Don W. Reinhard appeared before Chief United States District Judge Robert Hinkle this afternoon and pled guilty to making a false loan application related to a loan for a 36 foot Contender boat purchased by the defendant for $265,393.87. The loan application defendant submitted included a false 2001 income tax return that falsely listed Reinhard’s adjusted gross income as $944,322, whereas the tax return actually filed by the defendant with the Internal Revenue Service listed his adjusted gross income as $389,700.
Defendant also pled guilty to three counts of bankruptcy fraud, acknowledging that he failed to disclose to the bankruptcy court all personal property, bank accounts, assets, lease agreements, leased items and property, liabilities, creditors, and the transfer of any property or giving gifts worth more than $200 to anyone within a year of the filing of bankruptcy. Among the assets Reinhard failed to disclose was a glass gondola sculpture that he had previously purchased for $40,000, and then sold during the pendency of the bankruptcy to an individual in Texas for $24,000. Reinhard also admitted that he failed to disclose his ownership of a 2005 Harley Davidson motorcycle that he had previously purchased for $22,000, and then resold to an individual in Fort Myers for $12,900 while his bankruptcy was still pending.
The tax offenses to which defendant pled guilty included one count of making false statements by submitting to the United States Bankruptcy Trustee a false individual income tax return for the year 2002 and two counts of filing false individual tax returns with the Internal Revenue Service for the calendar years 2001 and 2002. In his 2001 tax return, the defendant falsely claimed that he had reimbursed his business partners in the amount of $554,662, a claim that resulted in his underpayment of $216,498.00 in taxes for 2001. In the 2002 tax return, which Reinhard filed in January of 2007, the defendant falsely claimed a net operating loss of $4,126,540, a claim that enabled the defendant to avoid paying $280,112 in taxes owed to the Internal Revenue Service.
Judge Hinkle scheduled the sentencing of the defendant for August 12, 2009. The
defendant faces a maximum sentence of 56 years’ imprisonment and total fines of $2.5 million dollars.
This successful prosecution of the defendant is the result of an extensive investigation that commenced more than two years ago. United States Attorney Kirwin commended the tireless efforts of the Internal Revenue Service in investigating this complex case. Mr. Kirwin stated, “The bankruptcy system is particularly vulnerable to fraud on the part of those who participate in it. The judges and trustees who monitor and administer the system and the parties involved rely primarily on representations made by the debtor and other parties to determine how much is owed to each creditor and how the debtor's liabilities should be repaid. The judges, trustees, and parties who rely upon the representations made by debtors in bankruptcy court can be easily misled by an unscrupulous participant. Fraud in the bankruptcy system is harmful to all citizens. Similarly, fraud in the filing of false tax returns with the Internal Revenue Service adversely affects the taxpayers. This office, along with the federal investigative agencies, will vigorously investigate and identify those individuals who commit fraud. Fraud committed against the taxpayers remains a priority with the Department of Justice.”
The case was prosecuted by Assistant United States Attorney Stephen M. Kunz.