Al Benavides Pleads Guilty in U.S. Federal Cour
The United States Attorney's Office announced that during a federal court session in Missoula, on March 10, 2011, before U.S. District Judge Donald W. Molloy, AL BENAVIDES, a 63-year-old resident of Kalispell, pled guilty to tax fraud. Sentencing has been set for June 23, 2011. BENAVIDES is currently released on special conditions.
In an Offer of Proof filed by Assistant U.S. Attorney Kris McLean, the government stated it would have proved at trial the following:
During the relevant time period, BENAVIDES owned and operated Benavides and Company, a tax preparation and accounting business in Kalispell. In this capacity, BENAVIDES prepared tax returns that were demonstrably false that saved his clients thousands in tax by routinely inflating the basis of property, fabricating false assets on the depreciation schedules and improperly claiming substantial personal expenses to be deducted as business expenses.
Specific to one count, BENAVIDES established a scheme whereby the client would ostensibly pay him "fees" for certain accounting or consulting work that would ultimately be used by BENAVIDES to purchase personal items for the client. First, the client would write a check to BENAVIDES for "fees." Then the client characterized the check as a legitimate business expense and deducted it on his corporate books. Finally, BENAVIDES used the money to purchase certain personal items, such as jewelry, for the client. Thus, the client received both the business deduction and possession of a personal item, while BENAVIDES turned a profit.
BENAVIDES faces possible penalties of 3 years in prison, a $100,000 fine and 1 year supervised release.
The investigation was conducted by the Criminal Investigation Division of the Internal Revenue Service.
A copy of the Offer of Proof can be obtained by contacting Sally Frank at (406) 247-4638.