FORMER EAGLE BUSINESSMAN PLEADS GUILTY TO TAX EVASION
Douglas Fitzgerald, 69, formerly of Eagle, Idaho, pled guilty today to attempting to evade income tax, the U.S. Attorney’s Office announced.
According to the plea agreement, Fitzgerald filed false tax returns that omitted the income from the sale of his business’ assets and from the sale of real property. In the plea agreement, Fitzgerald admitted that, for the tax years 1999 through 2003 and 2005, he failed to report over $1 million in income and evaded payment of taxes totaling $308,912. Fitzgerald used nominee entities to conceal this income. Specifically, he titled the stock in his business and titled his real estate in two entities formed as Nevada corporations sole, which are state entities designed for use by church officials. Fitzgerald called one corporation sole “the Office of the First presiding Patriarch (Overseer), a corporation sole, over/for The Fellowship Society (an unincorporated religious Scriptural society, in the nature of Ecclesia).” He formed a second similarly named corporation sole over “Paradise Flats Society.” Fitzgerald used the Fellowship Society and Paradise Flats Society, as purported religious or charitable institutions, to conceal his income from the sale of his business and from the sale of real property. Fitzgerald claimed that the income went to these purported religious entities, despite the fact that Fitzgerald directed the transactions maintained control of the income, and benefitted personally from it. In one instance Fitzgerald directed the proceeds of a real estate sale to another company, Moscow Combined Investments, and used the proceeds to purchase a house for his daughter. He also directed several hundred thousand dollars to a bank account in his wife’s name in the Philippines. Fitzgerald eventually moved to the Philippines but then was returned to the United States after he was indicted.
The federal charge carries a maximum prison sentence of five years, supervised release of up to three years, and a fine of up to $250,000 or twice the gross gain or gross loss caused by the offense.
Sentencing is scheduled for May 5, 2011, before Chief U.S. District Judge B. Lynn Winmill in Boise.
The case was investigated by the Internal Revenue Service, Criminal Investigation Division.
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