WASHINGTON, D.C. - Roger Steele, a Carson City, Nevada accountant, pleaded guilty to preparing a false individual income tax return which was then filed with the IRS, and his wife, Kimberly Steele, a Reno, Nevada accountant, pleaded guilty to attempting to obstruct an IRS audit, the Justice Department and Internal Revenue Service announced today. Each defendant faces a maximum penalty of three years in prison and a $250,000 fine. United States District Judge Larry R. Hicks scheduled sentencing for Roger Steele on December 29, 2005 at 10:00 A.M. and for Kimberly Steele on March 16, 2006, 9:00 A.M.
Roger Steele, owner of Steele Accountancy, Inc., pleaded guilty in connection with the advice and assistance he gave to a client, Dale Brown, regarding Brown's 1998 individual income tax return and the 1998 income tax return of Brown's domestic corporation. Kimberly Steele pleaded guilty in connection with her obstructive conduct while representing Brown during the course of the IRS's 1999 civil audit. Brown, an author from Incline Village, Nevada, previously pleaded guilty in April 2004 to filing a false 1998 corporate tax return on which he falsely claimed more than $450,000 in bogus business expenses as a result of his participation in the offshore scheme promoted by Roger Steele.
"The Tax Division is committed to prosecuting accountants who assist their clients in fraudulent tax schemes," said Dana Boente, Deputy Assistant Attorney General of the Justice Department's Tax Division for criminal matters. "These investigations and prosecutions are especially important when an accountant obstructs the Internal Revenue Service's audit function."
According to documents filed with the court, in 1998 and 1999, Roger Steele assisted Brown in forming two offshore corporations. He advised Brown to transfer monies from his domestic corporation to the offshore corporations and to record bogus expenses on the domestic corporation's records for services that were never performed or provided by the offshore corporations. Roger Steele also advised Brown that he could bring the monies transferred to the offshore corporations back into the country disguised as loans or by using a credit card issued by an offshore bank. Steele admitted that as part of the scheme, he knowingly prepared two false tax returns for Brown: a false 1998 income tax return for Brown's domestic corporation that included fraudulent business deductions of more than $450,000, and a false 1998 individual income tax return for Brown that understated Brown's income tax liability by approximately $223,000.
"Those who participate in or assist taxpayers in the preparation of a return which is fraudulent or false are engaging in criminal activity," said Nancy J. Jardini, IRS Chief, Criminal Investigation. "Today's guilty pleas reaffirm the IRS's commitment to investigate and recommend prosecution against return preparers who knowingly prepare false tax returns on behalf of others."
Kimberly Steele admitted that during the IRS's 1999 audit, she assisted Brown in presenting to the IRS auditor a false explanation about Brown's use of an offshore credit card. To support the fictitious explanation, she knowingly signed and presented to the IRS auditor a false affidavit.
Deputy Assistant Attorney General Boente thanked Tax Division Trial Attorney Caryn D. Mark, who prosecuted the case. He also thanked the special agents of the Internal Revenue Service whose assistance was essential to the successful investigation and prosecution of the case.
Additional information about the Justice Department's Tax Division and its enforcement efforts may be found at http://www.usdoj.gov/tax.