FOR IMMEDIATE RELEASE:

April 15, 2002

Kesha Handy                           
P. O. Box 61129                      
Houston, TX 77208                  
Phone: 713/567-9335  
Fax: 713/718-3390
E-Mail: usatty.txs@usdoj.gov

FORMER CLEAR LAKE DENTIST SENTENCED TO PRISON FOR FILING FALSE TAX RETURNS
Al Balboni, Assistant U.S. Attorney
713/567-9726

(Houston) Michael T. Shelby, United States Attorney for the Southern District of Texas, announced today that Dr. Eddi Lee, D.D.S., was sentenced to 12 months and 1 day in federal prison to be followed by three (3) years supervised release for conspiring to defraud the United States by filing false federal income tax returns for the years 1994 through 1997. Dr. Lee had previously plead guilty to the offense in December, 2001. Lee's former office manager, Jerry Laws, also pled guilty to conspiracy to defraud the United States by assisting Dr. Lee in the preparation of her false income tax returns, and was sentenced today to four (4) months at a Comprehensive Sanctions Center, to be followed by three (3) years of supervised release, and a $3,000 fine.

According to the written plea agreement, defendants Eddi Lee and Jerry Laws worked together at Lee's dental practice in Clear Lake, Texas from January, 1994 through the summer of 1997. During that time, Laws was Lee's office manager and the person primarily responsible for providing the outside accountants with the business records needed to prepare monthly financial statements and income tax returns for the business and Eddi Lee personally. For the entire period, Lee received monthly payments from a dental insurance company, known as Denticare, totaling approximately $505,753.00. Although the monthly payments were receipts of her dental practice, Dr. Lee had them direct deposited into her personal account at NationsBank. The business bank account was at Texas Commerce Bank.

Laws was aware of the Denticare receipts and deliberately failed to provide the Forms 1099 or any other evidence of the income to the accountants responsible for preparing the monthly financials and the income tax returns for the years 1994 through1997. None of the $505,000 of Denticare receipts was ever reported by Lee either on her personal or corporate returns.

In 1997, Laws told a prospective buyer of Lee's dental practice that there were additional business receipts which were not reported on the business tax returns. Laws provided a summary of the diverted Denticare receipts and a copy of the 1996 Form1099 from Denticare. Laws told the prospective buyer that if the IRS ever asked, he would say the accountants must have lost the 1099s. The total tax harm attributable to the defendants' actions is approximately $230,965.00.

This case was investigated by Special Agents of the Internal Revenue Service and was prosecuted by Assistant United States Attorney Al Balboni.

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