Tax Protester Convicted of Attempting to Evade Taxes and Failing to File Income Tax Returns
Failed to File Federal Tax Returns For Seven Years While Earning at Least $895,000 in Income
Baltimore, Maryland - A federal jury has convicted Anthony Edwin Dorsey, Sr., age 58, of Columbia, Maryland, for attempting to evade paying income taxes and failing to file income tax returns, announced United States Attorney for the District of Maryland Rod J. Rosenstein and Assistant Attorney General Nathan J. Hochman of the Department of Justice Tax Division.
“The jury took just a few hours to reject Anthony Dorsey Sr.’s bogus claim that he was not required to pay taxes,” said U.S. Attorney Rod J. Rosenstein. “The evidence showed that Mr. Dorsey evaded income taxes by converting all of his income to cash and transferring money to offshore bank accounts.”
“Taxpayers who fail to account for their federal tax obligations, such as Mr. Dorsey, will be held accountable,” said Nathan J. Hochman, Assistant Attorney General of the Justice Department's Tax Division. “Taxpayers should beware of organizations that promise to provide the secret method to avoid federal tax obligations, such as filing federal tax returns and paying taxes. Under the National Tax Defier Initiative, the Tax Division has committed to vigorously investigation, prosecute, and convict those who engage in illegal tax defier conduct anywhere in this nation.”
“The prosecution of individuals who intentionally conceal income and evade taxes is a vital element in maintaining public confidence in our tax system. We should not expect the honest taxpayer to foot the bill for those who hide income from IRS,” stated C. Andre' Martin, Internal Revenue Service-Criminal Investigation Special Agent in Charge.
According to evidence presented at trial, Dorsey has operated an information technology consulting business known as Allnet System Resources since at least 1999. As an independent contractor, Dorsey was responsible for paying federal and state income, payroll and Medicare taxes on the payments he received for his computer consulting services. From 2001 to 2007 Dorsey was paid at least $895,000. He did not file federal tax returns or pay taxes on this income.
According to trial testimony, from 1999 to the present, Dorsey attempted to evade his tax liability by: promptly converting $380,000 he was paid to cash and then using the cash for personal expenses; transferring $88,975 from his bank accounts to an offshore credit card account and then using that credit card for his personal expenses; providing an inaccurate social security number to the bank where he maintained his principal bank accounts to make it more difficult to identify his ownership of the funds and track the movement of funds from these accounts; making mortgage payments on his residence under the name of the previous owner, so that the previous owner was reflected on county property and tax records as the owner; and using false social security numbers when purchasing an interest in time share properties in Las Vegas, Nevada and Williamsburg, Virginia in December 2002 and July 2003.
Dorsey faces a maximum sentence of five years in prison and a fine of $ 250,000 on each of five counts of attempting to evade income taxes; and one year in prison and a fine of $100,000 on each of seven counts of failing to file tax returns. U.S. District Judge Marvin J. Garbis has scheduled sentencing for December 1, 2008.
United States Attorney Rod J. Rosenstein thanked the Internal Revenue Service - Criminal Investigation for its investigative work. Mr. Rosenstein commended Assistant United States Attorney Jefferson M. Gray and Trial Attorney Daren H. Firestone of the U.S. Department of Justice Tax Division, who are prosecuting the case.