"Wire Fraud and Tax Evasion net 27-Months in Prison"
Spokane – Today, Michael C. Ormsby, United States Attorney for the Eastern District of Washington, announced that John Earl Petersen, age 60, of Spokane, Washington was sentenced to 27-months in prison. In addition, John Petersen was ordered to serve 3-years of court supervision after he is released from prison and was ordered to pay $167,794.94 in restitution.
In November 2010, John Petersen was charged by Indictment with wire fraud and tax evasion. According to the pleadings, John Petersen ran a wire fraud scheme between May 2006 and May 2007. Tom B. and his sister, Jean M. (living in Alabama), had invested about $120,000 in Empire State Viatical, also known as Empire State Financial, and the entire investment was lost. Empire State Viatical was a fraudulent investment scheme in the late 1990s (unrelated to John Petersen) where many people lost all their investments. John Petersen's interstate wire fraud scheme promised to get back the money that Tom B. and Jean M. lost in Empire State Viatical. Petersen falsely told them he located $100 million from Empire State Viatical that was being held in a foreign bank. John Petersen repeatedly told Tom B. that because the funds were in a foreign bank, he needed money to pay various fees being charged by numerous entities to get the $100 million released and then it could be given to Tom B. and Jean M. A total of $167,794.94 was sent to Petersen from Tom B. and Jean M. for these fictitious fees. John Petersen spent all that money for his personal use and it is considered income to him. John Petersen attempted to evade the assessment of his federal income taxes for the tax year 2006 by failing to file an income tax return, depositing his funds into bank accounts under another person's name and subsequently withdrawing the funds in cash. As a result, John Petersen owes taxes, penalties and interest in excess of $51,260 for the tax year 2006.
This investigation was conducted by the Internal Revenue Service - Criminal Investigation and the Federal Bureau of Investigation.