FOR FURTHER INFORMATION CONTACT
AUSA VICKIE E. LEDUC or
MARCIA MURPHY at 410-209-4885
APRIL 17, 2007
FOR IMMEDIATE RELEASE
CLINTON MAN SENTENCED TO A YEAR IN PRISON AND ORDERED TO PAY OVER $19,000 FOR FAILURE TO FILE FEDERAL TAX RETURNS
Greenbelt, Maryland - U.S. District Judge Alexander Williams, Jr. sentenced Eugene Anthony Hollingsworth, age 40, of Clinton, Maryland late yesterday to one year in prison followed by one year of supervised release for failure to file tax returns, announced United States Attorney for the District of Maryland Rod J. Rosenstein. Judge Williams also ordered that Hollingsworth pay restitution of $19,594.
According to his guilty plea, in May 2005, Hollingsworth testified before a federal grand jury investigating narcotics trafficking by a long time friend of Hollingsworth. Hollingsworth was a signatory on the bank accounts for a clothing store owned by his friend, but never worked at the store. As part of his testimony, Hollingsworth was asked specific questions about his own financial background, such as his ability to purchase a $50,000 Mercedes Benz in 2003 while working as a barber. This Mercedes Benz had been surveilled being driven by his friend. Hollingsworth stated that he put $7,000 cash down on the car from the sale of another car, and now carried a $1100 monthly payment. He also admitted to having to pay one half of a $1000 monthly rent payment and having to support two children that lived with him and his wife. Despite these and other expenses, Hollingsworth stated he earned $25,000 to $30,000 per year as a barber working in Like That Barbershop, a business that was owned by his father. Hollingsworth claimed he pays for everything in cash or money orders and has no bank accounts.
Hollingsworth testified that he could not remember the last time that he filed federal income tax returns, but that he “knew” he did not file returns for 2003 or 2004. Hollingsworth also stated that no taxes are withheld from his pay at the barbershop and that everything he earns is in cash. Further, Hollingsworth testified that he did not have to pay his father for the use of his barber’s booth at the store because he also “manages” the store and does not receive a salary for that responsibility. Thus, this would not be a deductible business expense that would act to reduce his tax liability. In addition, Hollingsworth stated that the Barber Shop pays $400 per month child support money on his behalf to the mother of one of his children. Hollingsworth stated that he did not have a mortgage or own his own home.
As a result of his incriminating testimony, agents executed a search warrant in May 2005 at Hollingsworth’s home on Hardesty Drive. The agents found a 2002 tax return that was prepared but never filed. Following execution of the search warrant, Hollingsworth filed three tax returns with the IRS, none of which accurately reflected what Hollingsworth told the grand jury. For example, the 2002 return Hollingsworth filed did not include a Schedule C detailing his income and expenses as a barber. The 2003 and 2004 returns did include a Schedule C , however the gross receipts on the 2003 return were underreported by approximately $20,817 and the expenses on the 2004 return were overstated by $9,360, resulting in a tax loss of $19,594.
United States Attorney Rod J. Rosenstein thanked the Internal Revenue Service - Criminal Investigation, and commended Assistant United States Attorney Sandra Wilkinson, who prosecuted the case.