Thursday, July 3, 2014
HONOLULU – Charles Loewen (“Loewen”), age 57, the owner of Paradise Stone & Tile, resident of Maui, and former National Football League player for the San Diego Chargers, was sentenced to 37 months imprisonment, 3 years supervised release, a $10,000 fine, and $235,288 in restitution for felony charges for conspiring to defraud the United States and filing a false claim for tax refund today before United States District Judge Derrick K. Watson. Judge Watson also sentenced Paula Loewen, age 56, to three years probation, a $5,000 fine, and $5,034 in restitution for failing to file taxes in 2007.
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. Loewen, who has a Master’s Degree in Business Administration, 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 conspired with Gerald Poynter, a/k/a Brother Jerry Love, a 1099-OID scheme promoter who was charged and sentenced in a 1099-OID fraud scheme in Kansas City, in the Western District of Missouri, involving a $96 million fraud.
Also according to information produced in court, after the State of Hawaii Department of Taxation levied two of Loewen’s Territorial Savings Bank accounts, he closed these accounts. Loewen directed his wife to open an Arizona bank account in her name only, in order to conceal his income, and he then 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. Loewen has failed to pay the over $127,000.00 in taxes that he owes the State of Hawaii for Tax Years 2004, 2005, 2006, 2007, and 2008. Loewen ignored past due notices from the IRS or sent frivolous correspondence to tax authorities for tax years going back to 1995.
Also according to information produced in court, Loewen recently disclosed a net worth with his wife of over $1.5 million dollars to federal authorities, including $260,000 in tools and gold bullion and $695,000 in an offshore account.
The case was investigated by the Internal Revenue Service -- Criminal Investigation. The prosecution was handled by Assistant United States Attorney Cynthia Lie.