Grasonville Accountant Sentenced to Two Years in Prison for Preparation of False Tax Returns
Baltimore, Maryland - U.S. District Judge Richard D. Bennett sentenced Joseph Poole, age 64, of Grasonville, Maryland, today two years in prison, followed by one year of supervised release to be served in home detention with electronic monitoring, for preparing false tax returns, in connection with a scheme to underreport the income earned and tax owed by a Baltimore City business owner, announced United States Attorney for the District of Maryland Rod J. Rosenstein. Judge Bennett also ordered Poole to pay a $10,000 fine and to pay half the cost for the government’s expert witness, $13,603,80. On July 24, 2009, Judge Bennett convicted Poole of those charges after a seven day bench trial.
According to trial testimony, between 1998 and 2003, Stilianos (Stan) Mavroulis, the President and 100 percent owner of Fidelity Home Mortgage Corporation (FHMC), diverted more than $1,100,000 of FHMC’s funds to pay for personal family expenses. As Poole knew, those personal expenses had been classified in FHMC’s books and records as business expenses. Poole then prepared FHMC’s corporate returns to reflect that the personal expenses were legitimate business deductions, thereby fraudulently decreasing FHMC’s net profit figures as well as the income shown on Stan Mavroulis’ personal tax returns. The evidence also demonstrated that, between 1998 and 2003, Stan Mavroulis withdrew approximately an additional $700,000 from FHMC as shareholder draws that should have been reported as capital gains on his personal tax returns. Poole, who worked for an accounting firm headquartered in Annapolis, Maryland, prepared all of FHMC’s corporate tax returns and Stan Mavroulis’ personal tax returns for the relevant period. Judge Bennett concluded that Poole willfully prepared false personal tax returns for Stan Mavroulis for tax years 2000 through 2003, failing to report a total of more than $1,438,000 in income for Mr. Mavroulis in those years. For 2000 and 2001, Stan Mavroulis’ personal tax returns, as prepared by Poole, claimed the Earned Income Credit, despite the fact that Stan Mavroulis did not qualify for such credit. In addition, the evidence showed that Poole knew that Stan Mavroulis’ children were working at FHMC but were not on FHMC’s payroll and therefore were not reporting their income to the IRS; instead, the payments to the Mavroulis children were disguised within the approximately $700,000 in shareholder draws that were not reported on Stan Mavroulis’ tax returns.
“Willfully filing a false tax return is the same as stealing and there are serious consequences,” stated C. Andre' Martin, Internal Revenue Service-Criminal Investigation Special Agent in Charge. “Prosecuting individuals who intentionally prepare and file false tax returns is a vital element in maintaining public confidence in our tax system.”
Stan Mavroulis, age 65, and his son, Kirk Mavroulis, age 27, both of Baltimore, previously pleaded guilty to related charges. Stan Mavroulis pleaded guilty on January 26, 2009, to filing a false individual income tax return, and was sentenced to a year and a day in prison, followed by a year of supervised release, the first six months of which is to be served on home detention with electronic monitoring. Stan Mavroulis was also ordered to pay an $18,000 fine. Kirk Mavroulis, who was the head of FHMC’s accounting department, pleaded guilty on January 22, 2009, to failing to file an individual tax return that should have reported the income he received from FHMC and which was disguised as shareholder draws to Stan Mavroulis. He was sentenced to probation and ordered to pay a $9,000 fine.
United States Attorney Rod J. Rosenstein thanked the Internal Revenue Service - Criminal Investigation for their investigative work. Mr. Rosenstein commended Assistant United States Attorneys Stephen M. Schenning and Jonathan Biran, who are prosecuting the case.