WASHINGTON, D.C. - Hawaii businessman Michael H. Boulware has been sentenced to 60 months in prison followed by a term of supervised release for 36 months and a fine of $25,000 for evading income tax, the Department of Justice and the Internal Revenue Service (IRS) announced today. Boulware, the principal founder of Hawaiian Isles Enterprises, Inc. (HIE), was sentenced by Senior U.S. District Judge Edward Rafeedie in Honolulu. The court found that the combined tax loss to the IRS and the State of Hawaii totaled $8,105,714.
On July 15, 2005, a federal jury found Boulware guilty of filing false individual income tax returns for 1989 through 1993 and evading income tax owed from 1994 through 1997.
“People who evade their tax obligations by hiding their income and assets from the IRS should expect to be prosecuted and face substantial time in federal prison,” said Eileen J. O’Connor, Assistant Attorney General for the Justice Department’s Tax Division. “The Department of Justice and the IRS will vigorously protect the integrity of the federal tax system.” According to the evidence introduced at trial, from 1989 through 1997 Boulware used various schemes to divert approximately $10.2 million from HIE-a tobacco, coffee, water and vending machine business with annual sales of approximately $85 million-which he failed to report on his federal income tax returns. The government’s evidence also showed that from 1995 through 1997, Boulware received income in excess of $1.7 million from nominee entities and bank accounts located in the Kingdom of Tonga and Hong Kong, which he failed to report on his income tax returns.
“All income is taxable, legitimate income as well as the proceeds of fraudulent activity,” said Nancy J. Jardini, IRS Chief, Criminal Investigation. “Our mission at IRS Criminal Investigation is to detect, deter and investigate any violations of that legal duty. All hard-working law-abiding taxpayers need to know that when these crimes occur, IRS Criminal Investigation will be there to address it.” Assistant Attorney General O’Connor and U.S. Attorney Edward H. Kubo, Jr. thanked Assistant U.S. Attorney Leslie E. Osborne, Jr. and Tax Division Trial Attorney Jared E. (Jed) Dwyer, who prosecuted the case. They also thanked the special agents of the IRS and the Federal Bureau of Investigation, whose assistance was essential to the successful investigation and prosecution of this case.
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