Two from northeast Ohio convicted in $8 million tax fraud
Two self-proclaimed “citizens of the world” from Northeast Ohio were found guilty of conspiring to defraud the Internal Revenue Service out of more than $8 million, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio.
A jury found Don P. Gooch and Gerard F. Scott guilty of five counts, including one count of conspiracy and two counts each of making false claims, following a three-day trial. U.S. District Judge Donald Nugent is scheduled to sentence the men on October 24th. According to court records Don P. Gooch, 64, resides in East Cleveland, where Gerard F. Scott, 38, had a last known address.
In early 2011, Scott obtained a tax identification number for a purported trust (the Gerard Frank Scott Trust) and filed false Forms 1099-INT with the IRS stating that the trust had paid millions of dollars of interest income to Gooch, a woman identified at trial as Scott’s wife, and two other trusts purportedly set up by Scott and Gooch, from which a total of $17,000,000 of taxes had purportedly been withheld.
Based on those false 1099 forms, the conspirators caused false income tax returns to be filed for Gooch and Scott’s wife, and the two other trusts claiming false income tax refunds totaling approximately $8,033,930, according to court documents.
The conspirators initially succeeded in having refunds of approximately $261,000 deposited into a new bank account opened by Scott’s wife and $3.7 million deposited into a new bank account opened by Gooch as a trust account in the name Nhondi Eden Holdings. From those two accounts, over $2.5 million was transferred into a new bank account opened by Scott in the name Private Equity Investment Trust. Over the next few weeks after receiving the refunds, approximately $60,000 in currency was withdrawn from Scott’s wife’s account, while Scott, at times accompanied or assisted by his wife or Gooch, purchased and attempted to purchase a number of expensive or luxury items. The items included approximately $100,000 worth of gold and silver coins purchased jointly by Scott and his wife, a $93,000 Range Rover purchased in the nominee name of a purported ministry known as the Light of Peace Society, and a $164,000 Porsche and a $487,000 home in Aurora that Scott attempted to purchase in the nominee name, according to court documents.
This case is being prosecuted by Assistant United States Attorneys John M. Siegel and Justin J. Roberts following an investigation by the Internal Revenue Service – Criminal Investigation.