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“Ten-Percenter” Sentenced to One Year and One Day in Federal Prison on Tax and Tax Fraud Convictions Involving Winnings at Lone Star Park Horse-Racing Track

FOR IMMEDIATE RELEASE
May 16, 2014

DALLAS — Willie L. Loveless was sentenced today by U.S. District Judge Barbara M. G. Lynn to one year and one day in federal prison and ordered to pay $25,826 in restitution, following his guilty plea last year to felony offenses stemming from his operation as a “ten-percenter” at the Lone Star Park horseracing track in Grand Prairie, Texas.  Judge Lynn ordered Loveless to surrender to the Bureau of Prisons on July 1, 2014.  The announcement was made today by U.S. Attorney Sarah R. Saldaña of the Northern District of Texas.

Loveless pleaded guilty in May 2013 to 20 of the 21 counts of the indictment — one count of corruptly endeavoring to obstruct and impede the due administration of the Internal Revenue laws and 19 counts of fraud and false statements on Forms W-2G.

According to the Internal Revenue Code, gambling winnings, including those from horseracing bets, are taxable and must be reported on a gambler’s income tax return.  A payer, such as Lone Star Park, is required to issue a Form W-2G, “Certain Gambling Winnings,” to a gambler if the gambler receives, among other types of winnings, $600 or more in gambling winnings, provided the payout is at least 300 times the amount of the wager.  A winning ticket that would trigger the issuance of a Form W-2G is informally referred to by gamblers as an “IRS ticket.”  The indictment also states that if an IRS ticket is for winnings greater than $5,000, a payer, such as Lone Star Park, is required to withhold and pay over to the IRS taxes in the amount of 25% of the winning ticket value.  At Lone Star Park, there are special windows, known as “IRS Windows,” where an individual must cash an IRS ticket and complete and sign a Form W-2G.

“Ten-percenting,” according to the indictment filed in the case, is a practice that occurs at some gambling establishments in which a gambler arranges for another individual to cash the gambler’s IRS ticket, so that the gambler can avoid paying taxes on the winnings.  The person cashing the ticket, often called a “ten-percenter,” completes the Form W2-G, falsely representing that he/she is the owner of the IRS ticket and the proper recipient of the winnings.  Usually, according to the indictment, the person who cashes the ticket charges approximately ten percent of the winnings for the service.

Loveless admitted, according to the factual resume filed in the case, that in calendar years 2008, 2009 and 2010, he signed approximately 1445 Forms W2-G at Lone Star Park representing more than $1.76 million in winnings.  On those forms, Loveless falsely attested that he was the only person entitled to any part of the winnings and each form signed by Loveless reflected his correct name, address and social security number.

The case was investigated by IRS Criminal Investigation and prosecuted by Assistant U.S. Attorney J. Nicholas Bunch.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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