Thursday, March 20, 2014
HONOLULU – On March 20, 2014, Charles Loewen (“Loewen”), age 57, the owner of Paradise Stone & Tile and resident of Maui, today pled guilty to conspiring to defraud the United States and filing a false claim for tax refund before United States District Judge Derrick K. Watson. Loewen faces a maximum term of imprisonment of five years on each of the two charges when he is sentenced on July 3, 2014 at 9:30 a.m.
United States Attorney Florence T. Nakakuni said that, according to the First Superseding Indictment, Loewen conspired to use a scheme in which he and his wife falsely claimed tax refunds from the Internal Revenue Service (“IRS”) totaling $2,353,173.22. He created fake supporting tax documentation, specifically phony 1099-OID Forms to make it appear as if the IRS owed him a large tax refund, when in fact the IRS did not.
According to information produced in court, Loewen further conspired to conceal his Paradise Stone & Tile business income from the IRS. After the State of Hawaii Department of Taxation levied two of Loewen’s Territorial Savings Bank accounts, he closed these accounts. Loewen’s wife opened an Arizona bank account, and Loewen began depositing his Paradise Stone & Tile business income into this Arizona account. Loewen later submitted false federal tax returns to the IRS claiming that he earned zero net income for three tax years, when in fact he had earned net income for those years.
The case was investigated by the Internal Revenue Service -- Criminal Investigation. The prosecution was handled by Assistant United States Attorney Cynthia Lie.