Reisterstown Contractor Sentenced to More than A Year in Prison for Tax Evasion

Owes More Than $423,000 in Federal Income and Employment Taxes

November 27, 2012

Baltimore, Maryland - U.S. District Judge James K. Bredar sentenced Randy Benjamin Wells, age 49, of Reisterstown, Maryland, today to 13 months in prison followed by three years of supervised release for tax evasion. Judge Bredar also ordered Wells to pay restitution of $349,588. Wells paid $74,404.30 to the IRS prior to sentencing.

The sentence was announced by United States Attorney for the District of Maryland Rod J. Rosenstein and Special Agent in Charge Rick A. Raven of the Internal Revenue Service - Criminal Investigation, Washington, D.C. Field Office.

“Today's sentence sends a strong message that tax evasion will be vigorously pursued by IRS,” said Rick A. Raven Special Agent in Charge, IRS Criminal Investigation Washington DC Field Office. “Tax compliance should be equally shared among all Americans. Business owners like Mr. Wells who choose differently are being held accountable, reminding the public that there are detrimental consequences for this type of criminal behavior.”

According to Wells’ guilty plea, from 2005 through 2009, Wells operated Wells Contracting and Demolition Company, Inc., Triple R Contractors, Inc., and Gryphon Contracting, Inc. Although Wells hired a tax preparer to prepare his individual tax returns for 2005 through 2009, Wells failed to file the income tax return with the IRS resulting in approximately $196,200 in taxes owed. Wells used several methods in an effort to conceal his income. For example, Wells purchased personal items, such as airline tickets for personal travel, retail items from department stores, subscriptions to Direct TV and Netflix, golf course fees and hotel visits, using funds held in the Wells Contracting and Demolition Company account. During 2009 Wells also purchased tickets for personal travel using funds in the Gryphon Contracting account. Wells also caused a nominee to open an account in the nominee’s name, then endorsed checks made out to Gryphon Contracting over to the nominee, who deposited the checks into the account, then used the funds to purchase items for Wells’ personal benefit.

During this same time, Wells failed to pay employment taxes for the employees working for his companies. In order to evade these taxes, Wells: failed to file the required quarterly Employer’s Federal Tax Return forms for 2005 through 2009; paid subcontractors with cash; formed Triple R Contractors to evade the employment taxes owed by Wells Contracting and Demolition Company, then formed Gryphon Contracting to evade the employment taxes owed by Triple R Contractors and Wells Contracting and Demolition Company. The tax loss as a result of Wells’ actions resulted in a total of $227,792.76 in employment taxes owed.

United States Attorney Rod J. Rosenstein commended the IRS-CI for its work in the investigation. Mr. Rosenstein thanked Assistant United States Attorney Gregory R. Bockin, who prosecuted the case.

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