Oct. 5 , 2006

 

ST. MARYS MAN CHARGED WITH SCHEME TO DODGE TAXES

Federal grand jury also returns indictments
in methamphetamine, cocaine and marijuana cases

TOPEKA, KAN. – A federal indictment charges a St. Marys man with creating sham trusts and giving false information to open bank accounts in a effort to avoid paying income taxes.

Gregory E. Pflum is charged with one count of falsifying an application to open a bank account, one count of making a false statement on a loan and credit application, and four counts of tax evasion. In a separate count, the government seeks the forfeiture of $200,000 in proceeds from the crime.

According to the indictment:

– Pflum worked for his father doing business as Coil Spring Specialties. Pflum’s father, David Pflum, was indicted in January 2004, and convicted in August 2004, on charges of violating federal tax codes.
– Since 1991, Gregory Pflum has failed and refused to withhold income for tax purposes, file federal income tax returns, and pay his taxes. As early as 1995 and continuing since then the Internal Revenue Service has notified Pflum that he owes taxes and must pay them.
– Pflum created sham trusts and opened bank accounts at St. Marys State Bank and First National Bank of St. Marys with fraudulent taxpayer identification numbers in an effort to avoid paying taxes and to conceal financial transactions from the Internal Revenue Service. Among those entities were The Little Flower Security Trust, The Little Flower Security Trust Coil Spring Specialties, The Little Flower Security Trust Construction Account, the St. Matthew Trust, and the Gregory E. Pflum and Lucie Pflum Irrevocable Family Trust.
– In an effort to avoid paying taxes, Pflum, who controlled the payroll at CSS, stopped writing payroll checks to himself personally and began writing his payroll checks to one of the trusts. He also transferred the title to his home to one of the trusts.
– In 1996, Pflum purchased 54 acres of land and titled it to one of the trusts. In November 1998, he took out a $200,000 mortgage on the land through the First National Bank of St. Marys. He used the money to build his primary residence. On the loan application, he did not did not disclose that at the time he owed the IRS approximately $52,000 in taxes.

If convicted, Pflum faces a maximum sentence of 30 years in federal prison and a fine up to $1 million on each of the charges of providing false financial information, and a maximum penalty of 5 years in federal prison and a fine up to $100,000 on each of the tax evasion charges.

The Internal Revenue Service Investigated the case. Assistant U.S. Attorney Christine Kenney is prosecuting.

OTHER CASES

In other cases, a grand jury meeting in Topeka returned the following indictments:

Miguel Paredes-Curiel, 32, and Jesus Alva-Fuentes, 31, both of whom are in custody in Lyon County Jail, are charged with one count of conspiracy to possess with intent to distribute approximately 268 kilograms (more than 590 pounds) of marijuana, and one count of possession with intent to distribute approximately 268 kilograms of marijuana. The crimes are alleged to have occurred from May 31, 2006, to June 3, 2001, in Lyon County, Kan.

If convicted, they face a penalty of not less than 5 years and not more than 40 years in federal prison and a fine up to $2 million on each count. The Drug Enforcement Administration investigated the case. Assistant U.S. Attorney Greg Hough is investigating.

Antonio Orduna-Martinez, 24, who is in federal custody in Ohio, is charged with one count of possession with intent to distribute approximately 25 kilograms of cocaine. The crime is alleged to have occurred Sept. 20, 2006, in Wabaunsee County, Kan.

If convicted, he faces a penalty of not less than 10 years and not more than life, and a fine up to $4 million. The Drug Enforcement Administration investigated the case. Assistant U.S. Attorney Randy Hendershot is prosecuting.

Guillermo Zuniga-Martinez, who is in custody at the Lyon County Jail, is charged with one count of distributing approximately 829 grams of methamphetamine, one count of using a telephone to facilitate a drug trafficking crime, and one count of making a building available for the purpose of unlawfully storing, distributing or using a controlled substance. The crimes are alleged to have occurred July 7, 2006, in Lyon County, Kan.

If convicted, he faces a penalty of not less than 10 years and not more than life, and a fine up to $4 million, on the distribution charge; a maximum penalty of 4 years and a fine up to $250,000 on the charge of using a telephone to facilitate drug trafficking, and a maximum penalty of 20 years and a fine up to $500,000 on the charge of maintaining a property for drug trafficking. The Topeka Police Department and the Drug Enforcement Administration investigated the case. Assistant U.S. Attorney Randy Hendershot is prosecuting.

Avelino Rivera-Ortiz, 21, Greeley, is charged with one count of possession with intent to distribute 100 kilograms or more of marijuana. The crime is alleged to have occurred Feb. 7, 2006, in Wyandotte County, Kan.

If convicted, he faces a penalty of not less than 5 years and not more than 40 years in federal prison and a fine up to $2 million. Immigration and Customs Enforcement investigated the case. Special Assistant U.S. Attorney David Zabel is prosecuting.

Elizandro Fernandez-Olivas, 38, Greeley, Kan., and Julio Fernandez-Olivas, 53, Merriam, Kan., are charged with one count of conspiracy to distribute 5 kilograms or more of cocaine and one count of possession with intent to distribute 5 kilograms or more of cocaine. The crimes are alleged to have occurred Sept. 20, 2006 in Wyandotte County, Kan.

If convicted, they face a penalty of not less than 10 years and not more than life in federal prison, and a fine up to $4 million on each count. The Drug Enforcement Administration investigated the case. Special Assistant U.S. Attorney David Zabel is prosecuting.

Jessie Chavez-Vargas, 29, Keith Ray Peters, 55, and Eduardo Soto-Diarte, 29, are charged with one count of conspiracy to distribute 500 grams or more of methamphetamine, and one count of possession with intent to distribute 500 grams or more of methamphetamine. The crimes are alleged to have occurred Sept. 18 and 19, 2006, in Wyandotte County, Kan.

If convicted, they face a penalty of not less than 10 years and not more than life in federal prison and a fine up to $4 million on each count. The Drug Enforcement Administration investigated the case. Special Assistant U.S. Attorney David Zabel is prosecuting.

As in any criminal case, a person is presumed innocent until and unless proven guilty. The indictments filed merely contain allegations of criminal conduct.

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