March 12, 2002

SAN FERNANDO VALLEY CONTRACTOR ADMITS TAX VIOLATION;
I.R.S. PREVIOUSLY SEIZED ONE-HALF MILLION DOLLARS

 A Chatsworth man has pleaded guilty to a felony tax charge in connection with his 1994 and 1995 federal income tax returns that failed to report a substantial amount of income.
 Gary Lee Morris, 60, pleaded guilty Monday afternoon to willfully subscribing to a false tax return.
 Morris is a general contractor who admitted that he created false books and accounting records. Morris requested that his clients make their payments to him by writing multiple checks on the same day. He would then record only one of the checks on his books and records, and he would convert the other checks to cash.  The incomplete books and records were then used to create Morris’ tax returns.
 In a plea agreement with the government, Morris admitted to substantial understatements of the gross receipts for his contracting business. At sentencing, the government will contend that Morris understated his gross receipts by more than $200,000 for the tax years 1994 and 1995.
 Morris is scheduled to be sentenced on July 29 by United States District Judge Nora M. Manella. At sentencing, Morris faces a maximum sentence of three years in federal prison.
 On January 24, 2002, United States District Judge Dickran Tevrizian signed an order resolving issues arising from the seizure of approximately $1.1 million that was in bank accounts held in various names. The Internal Revenue Service contended that the accounts were originally funded by Morris. Prior to Judge Tevrizian’s order, Morris disclaimed any interest in the accounts, although others, including his fiancé, claimed interests. Pursuant to a stipulation executed by the government and the others who claimed an interests in the funds, the government retained $505,000.
 This criminal case was investigated by IRS-Criminal Investigation and the Federal Bureau of Investigation.

 Release No. 02-048

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