FOR IMMEDIATE RELEASE
July 24, 2002
HENRY C. BAILEY SENTENCED IN TAX EVASION CASE
DENVER – John Suthers, United States Attorney for the District of Colorado, and Special Agent In Charge James D. Vickery, IRS-Criminal Investigation, Denver Field Office,today announced the sentencing of HENRY C. BAILEY, age 58, of Castle Rock, in U.S. District Court by Judge Edward W. Nottingham for filing a false federal income tax return on behalf of his corporation, Electro Lock, Inc. BAILEY pleaded guilty to the charge on December 7, 2000. BAILEY was sentenced to 7 months imprisonment; to be followed by a term of 1 yearsupervised release that includes among other conditions, 6 months home detention, and a fine of $2,000.00.
According to the plea documents filed in the case, BAILEY, who was President and majority shareholder of Electro Lock, Inc, established a nominee bank account in late 1991 and used this account during 1992 and 1993 to divert substantial amounts of money from the corporation for personal use and business purposes unrelated to Electro Lock, Inc. BAILEY failed to report the amounts he diverted on his personal income tax returns for 1992 and 1993and also caused the corporation to falsely deduct the amounts as insurance expenses on the corporate returns for the same period. BAILEY admitted that he intentionally misled an Internal Revenue Service Revenue Agent, who was conducting an audit of the corporation, as to the location and control of this nominee bank account.
BAILEY was previously indicted by a federal grand jury in October 1999 on two counts of personal income tax evasion for 1992 and 1993 and two counts of filing false corporate income tax returns for Electro Lock, Inc. for the fiscal years ending June 30, 1993 and June 30, 1994.
"Truthful and accurate filing of federal income tax returns by all individuals and corporations is an important part of our nation's economy," United States Attorney John W. Suthers said. "Those who flagrantly violate our tax laws are subject to aggressive criminal prosecution," Suthers said.
"The IRS-Criminal Investigation investigates potential violations of federal tax laws to ensure compliance, and to protect the integrity of our tax system. This effort is vital to the security of our economy and the success of our nation especially during these times of perceived lawlessness by corporate owners and officers," said James D. Vickery, Special Agent inCharge, Denver Field Office.
The case was investigated by the IRS-Criminal Investigation, Denver Field Office, and prosecuted by Lisa Perkins, Trial Attorney, Department of Justice Tax Division, and Kenneth Harmon, Assistant United States Attorney for the District of Colorado.
For more information about Tax Fraud see http://www.treas.gov/irs/ci.
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