March 16, 2012
President and Owner of ESA International Charged with Tax Evasion, Obstructing Internal Revenue Laws and Other Tax Crimes
PORTLAND, Ore. - Chester Evans Davis, 55, of Oregon City, Oregon, was arraigned today on federal tax crimes in U.S. District Court. Davis is the president and owner of ESA International, LLC, located in Gladstone, Oregon (formerly known as ESA NW, Inc.), a company that provides power system software and engineering services to several federal governmental agencies, among other clients. Davis is charged in an eleven-count indictment with five counts of tax evasion, four counts of willful failure to file corporate tax returns, one count of corruptly endeavoring to obstruct and impede the due administration of the Internal Revenue laws, and one count of uttering a fictitious obligation. U.S. Magistrate Judge Dennis J. Hubel detained Davis as a flight risk at today's arraignment. Trial is scheduled for May 22, 2012, before the Honorable Michael H. Simon.
The indictment alleges that from March 2003 until October 2011, Davis attempted to evade payment of the federal income taxes he owed, by concealing money and assets in a warehouse bank and shell corporations, by purchasing large amounts of gold and by submitting fictitious obligations to the Internal Revenue Service (IRS) purportedly to satisfy his outstanding tax assessments. The indictment also alleges that Davis received substantial taxable income in tax years 2007 through 2010, but that he attempted to evade and defeat the assessment of income tax due by transferring his income to a nominee bank account and then using that account to purchase millions of dollars worth of gold. Furthermore, Davis failed to file corporate tax returns on behalf of ESA NW, Inc. for tax years 2005 through 2008.
Davis is also charged with corruptly endeavoring to obstruct the due administration of the Internal Revenue laws, by sending fictitious obligations and documents to the IRS, filing arrest warrants against IRS employees, filing false tax forms, and attempting to file a baseless lien against the U.S. Treasury Secretary. In addition, Davis is charged with submitting a false and fictitious instrument to a mortgage company in an attempt to pay off mortgage debt with U.S. Treasury funds.
Davis was arrested on March 15, 2012, by special agents from the Internal Revenue Service, Criminal Investigation, the United States Marshals Service, and the U.S. Treasury Inspector General for Tax Administration.
The maximum penalty for tax evasion is five years imprisonment and a $100,000 fine; the maximum penalty for failing to file a tax return is one year imprisonment and a $25,000 fine; the maximum penalty for corruptly endeavoring to obstruct the due administration of the Internal Revenue laws is three years imprisonment and a $250,000 fine; and the maximum penalty for uttering fictitious obligations is 25 years imprisonment and a $250,000 fine.
An indictment is only an allegation of a crime, and a defendant is presumed innocent until proven guilty.
This case is being investigated by the Internal Revenue Service, Criminal Investigation, and is being prosecuted by Assistant U.S. Attorneys Craig Gabriel and Stacie Beckerman, and U.S. Department of Justice Tax Division Trial Attorney Leslie A. Goemaat.