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Former Kirtland man pleads guilty to tax charges after defrauding friends and relatives

FOR IMMEDIATE RELEASE
Dec. 4, 2012

A former Kirtland resident who solicited money from friends and relatives under false pretenses -- including to pay medical bills for an ill spouse who was not sick -- pleaded guilty today to two counts of filing false tax returns for the years 2005 and 2006, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio.

John C. Hartman, age 60, formerly of Kirtland, Ohio, filed his 2005 and 2006 tax returns omitting income obtained from individuals he defrauded. Hartman solicited money from relatives and family members under the guise that he was going to invest their money in various investments such as stock, raw materials and real property. He never invested these funds. Hartman used these funds to pay for personal expenses, according to court records.

He also obtained funds by telling his friends and family members that he needed funds to pay for outstanding tax obligations, a bad stock investment, and medical expenses for his sick wife. He obtained these funds under the guise of loans. Hartman had no such delinquent tax obligations or bad stock investments and his wife did not have the serious medical condition that Hartman described. Hartman had no intention to repay any of the funds he purported to be loans, according to court records.

Instead, Hartman spent the funds on personal expenses. The unreported income from fraud for 2005 and 2006 was $230,000 and $136,500, respectively. The tax loss for 2005 and 2006 was $65,797 and $17,963, respectively, according to court records.

The defendant's sentence will be determined by the Court after review of factors unique to this case, including Defendant’s prior criminal record, if any, Defendant’s role in the offenses, and the characteristics of the violations. In all cases the sentence will not exceed the statutory maximum and in most cases they will be less than the maximum.

This case is being prosecuted by Assistant United States Attorney Robert Patton and Special Assistant United States Attorney Perry D. Mastrocola, following an investigation by the Internal Revenue Service Criminal Investigation Division.

 

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