News and Press Releases

former branson west business owner pleads guilty
to filing false tax return

FOR IMMEDIATE RELEASE
February 16, 2011

            SPRINGFIELD, Mo. – Beth Phillips, United States Attorney for the Western District of Missouri, announced today that a former Branson West, Mo., man has pleaded guilty in federal court to filing a false federal income tax return after earning more than $4 million but paying only $1,000 in taxes over a five-year period.

            Randall L. Pennington, 51, of Houston, Texas, formerly of Branson West, waived his right to a grand jury and pleaded guilty before U.S. Magistrate Judge James C. England on Monday, Feb. 14, 2011, to a federal information charging him with filing a false U.S. income tax return.

            Pennington owned Total Balance Orthotics, which was in the business of selling orthotic shoe inserts. Pennington admitted that he earned more than $4 million during the five-year period from 2000 to 2004, for which he owed nearly $318,000 in income and self-employment taxes, but paid only $1,000 in taxes for 2002. Pennington pleaded guilty to filing a false 2002 income tax return in 2006, but under the terms of the plea agreement the court will consider the total tax harm from 2000 to 2004 as relevant conduct for purposes of determining an appropriate sentence.

The return filed for 2002 was false; it significantly understated Pennington’s income from his business and his gambling income. According to the plea agreement, Pennington had $962,274 in gross income in 2002, which resulted in $26,388 owed in taxes, though he only paid $1,000. Pennington admitted that, although he used seven bank accounts in 2002, he only gave his return preparer information on two of the accounts. He also funneled more than $50,000 of business receipts through another person’s account. Pennington also admitted that he used a transposed version of his actual Social Security number when providing identifying information to casinos for reporting his gambling winnings. As a result, $23,200 in gambling winnings was not reported on Pennington’s tax return.

            Under federal statutes, Pennington is subject to a sentence of up to three years in federal prison without parole, plus a fine up to $250,000. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.

            This case is being prosecuted by Assistant U.S. Attorney Steven M. Mohlhenrich. It was investigated by IRS-Criminal Investigation.

 

 

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