CADILLAC AREA CHIROPRACTOR SENTENCED TO JAIL
FOR TAX EVASION
GRAND RAPIDS, MICHIGAN – Paul Douglas Kelly, 53, a chiropractor from Cadillac, Michigan, was sentenced to 24 months’ imprisonment and 2 years of supervised release for tax evasion, U.S. Attorney Patrick Miles announced today. In addition, U.S. District Judge Paul L. Maloney also ordered Kelly to pay a special assessment of $100 and restitution to the Internal Revenue Service in the amount of $279,145. U.S. Attorney Miles was joined in the announcement by IRS Criminal Investigation Special Agent in Charge Erick Martinez.
In August of 2012, Kelly pled guilty to one count of tax evasion related to a tax evasion scheme that spanned from 1999 to 2006. During this time period, Kelly earned approximately $2.2 million in gross income from his chiropractic business yet he paid only approximately $23,601 in taxes -- an amount that understated his true tax liability by over $250,000. “This office will continue to vigorously prosecute those who cheat the tax system to avoid paying their fair share of taxes. The honest citizens of this district and America who pay their fair share deserve nothing less,” said U.S. Attorney Miles.
Court documents illustrate that from 1992 to the present, Kelly owned and operated a chiropractic business in Cadillac, Michigan, under the names of Kelly Chiropractic Center, and later, Advanced Chiropractic Center. From 1999 to 2006, Kelly willfully evaded assessment of income taxes by under-reporting the amount of his business income and inflating his business expenses. Kelly’s scheme to evade the assessment of taxes included maintaining two sets of books and records and only providing his tax preparers with records that did not accurately reflect his total business receipts. He also regularly claimed personal expenses, such as collectible toys, private school tuition, and snowmobile and hunting gear as an off-set to his business receipts on his federal income tax returns. Kelly also utilized a business bank account in the name of KF Asset Management Trust, as opposed to his true business name, in an attempt to further conceal his true financial affairs from the IRS. “Kelly went to extraordinary means to hide his income. IRS Criminal Investigation will thoroughly investigate those who fail to pay their taxes,” said IRS Criminal Investigation Special Agent in Charge Erick Martinez.
The case was investigated by special agents of the IRS Criminal Investigation. The case was prosecuted by Assistant U.S. Attorney Ronald M. Stella..