News and Press Releases

fayetteville couple sentenced for obstructing the tax laws

FOR IMMEDIATE RELEASE
May 8, 2013

NEW BERN - United States Attorney Thomas G. Walker announced that today, United States District Judge Louise W. Flanagan sentenced Michael L. Thomas, 54, and his wife, Carolyn S. Thomas, 56, both of Fayetteville, North Carolina, for corruptly obstructing and impeding the due administration of the Internal Revenue laws, in violation of Title 26, United States Code, Section 7212(a).  Michael Thomas was sentenced to 21 months imprisonment, followed by a one-year term of supervised release. Carolyn Thomas was sentenced to 18 months imprisonment, followed by a one-year term of supervised release.  Jointly, the Thomases were ordered to pay restitution in the amount of $255,853.00.

The investigation revealed that in 2005, Michael and Carolyn Thomas began marketing purported “debt elimination” programs for a company based in Columbia, South Carolina, the Capital Consortium Group (CCG).  From approximately 2004 to 2008, CCG perpetrated an $80 million Ponzi scheme.  CCG’s three principals were indicted by a federal grand jury in South Carolina in 2008 and convicted at trial in 2009.  The Thomases were among the most prominent and successful of CCG’s marketers, with upwards of 1,000 customers and high six-figure commissions in 2006 and 2007.  While Michael and Carolyn Thomas were profiting from their association with CCG, they filed a false federal income tax return for tax year 2005 in which they omitted most, if not all, of their CCG commissions.  Then the Thomases stopped filing tax returns altogether until March 2009, when they submitted a false amended 2005 return, a false 2006 return, and a false 2007 return.  Each return significantly underreported the Thomases’ CCG commissions and claimed large tax refunds based on fraudulent Forms 1099-OID.  The Thomases also filed bogus financial instruments with the IRS in purported payment of their tax debts, including false bonds with stated face values ranging from $300 million to $100 billion.

The investigation of this case was conducted by the Internal Revenue Service, Criminal Investigation.  The case was prosecuted by Assistant United States Attorney Adam F. Hulbig.

 

 

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