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Three Plead Guilty to Operating Payroll Tax and Warehouse Bank Schemes
December 9, 2011

Boston - Gary Alcock, of Westborough, Mass., and Gail Thorick and Myron Thorick, both of West Warwick, R.I. were convicted today in federal court on federal tax charges.

Alcock, Gail Thorick and Myron Thorick each pleaded guilty before U.S. District Judge F. Dennis Saylor IV in Worcester. Alcock pleaded guilty to conspiracy, five counts of tax evasion, and willfully failing to file a tax return.

Alcock owned and operated a trucking business that operated under the names G&K Trucking Co. and Barkmulch & Loam Co., located in Shrewsbury, Mass. Between 2000 and 2005, Alcock engaged in numerous efforts to evade federal income and payroll taxes. After failing to pay substantial amounts of payroll taxes he owed to the IRS, he subscribed to a payroll tax fraud scheme operating under the name Contract America in order to pay his employees “under the table” and to conceal those wages from the IRS. In addition, to impede the IRS from collecting on the payroll taxes that he already owed through the seizure of assets and garnishment of income, he changed the name of his trucking business to Alex Management, which was purportedly located in Reno, Nev. and funneled his financial transactions through a new bank account, which was placed under the signatory authority of a co-conspirator. As a result, Alcock caused a federal tax loss of at least $350,000.

Gail Thorick and Myron Thorick, wife and husband, each pleaded guilty to conspiracy and three counts of filing false tax returns. They conspired with others to operate a private “warehouse banking” scheme, which helped subscribers conceal income and assets from the IRS. The private warehouse scheme operated under three different names: Your Virtual Office, Office Services, and Calico Management. As part of the warehouse banking scheme, Gail Thorick and her co-conspirators maintained accounts at several banks and used the accounts to deposit over $16 million of largely unreported income. The accounts commingled personal income, business receipts, and other funds received from subscribers in order to mask the true ownership of the funds. Myron Thorick assisted in returning cash to the subscribers by cashing checks that totaled more than $400,000, at least some of which was wrapped in aluminum foil and delivered by mail to the subscribers. As a result, the two caused a federal tax loss of at least $400,000.


Alcock is scheduled to be sentenced on Mar. 8, 2012, whereas Gail Thorick and Myron Thorick are scheduled for sentencing on Mar. 12, 2012. The defendants face up to five years in prison on each count of conspiracy and tax evasion, together with fines of up to $250,000 or twice the financial gain to the defendant or loss to the IRS, to be followed by three years of supervised release. The charges for filing false tax returns each carry a maximum penalty of three years in prison, with a fine of $250,000 and one year of supervised release. The willful failure to file charge carries a maximum one-year prison term, with a fine of $100,000 and one year of supervised release.

Co-defendants William Scott Dion, Catherine Floyd, Charles Adams, and Kenneth Scott Alcock are scheduled for trial on March 1, 2012 before Judge Saylor.

United States Attorney Carmen M. Ortiz; John A. DiCicco, Principal Deputy Assistant Attorney General for the Justice Department’s Tax Division; and William P. Offord, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston made the announcement today.

The case is being prosecuted by Assistant U.S. Attorney Victor A. Wild of Ortiz’s Economic Crimes Unit and Assistant Chief John N. Kane and Trial Attorney Jeffrey L. Shih of the Justice Department’s Tax Division.

 

 

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