March 21, 2002

OFFICE OF THE UNITED STATES ATTORNEY
SOUTHERN DISTRICT OF CALIFORNIA
San Diego, California

United States Attorney
Patrick K. O'Toole

For Immediate Release

NEWS RELEASE SUMMARY

Patrick K. O'Toole, United States Attorney for the Southern District of California, and Eileen J. O'Connor, Assistant Attorney General for the Tax Division, Department of Justice, announced that Stephen Hundley, resident of Poway, California, was sentenced to 5 months custody by United States Magistrate Judge Ruben B. Brooks for failing to file a 1996 Individual Income Tax Return with the Internal Revenue Service, despite earning $173,410 in 1996. After completing the term of imprisonment, Hundley will have to serve one year on supervised release with the first 5 months of the supervised release to be served in custody at a community confinement center in the San Diego area. Hundley was also fined $30,000 and ordered to file all delinquent tax returns and to provide proof of a payment plan with the Internal Revenue Service within 180 days. Hundley had pleaded guilty before Magistrate Judge Brooks on November 29, 2001.

In his plea agreement, Hundley admitted to failing to file individual income tax returns for both 1995 and 1996 despite having a total gross income of $242,586 for those years. The taxes due for both years was $73,061.04. Hundley owns and operates two corporations, The Hundley Group and Internet Strategies, Inc., which develop web sites and software in the real estate field. According to statements made during the sentencing proceedings, Hundley expects to owe more than $300,000 in taxes, interest and civil penalties to the Internal Revenue Service and the State of California Board of Equalization.

Denise L. Rubin, IRS Criminal Investigation Special Agent in Charge for San Diego, stated: "Most taxpayers choose to report the income they receive and file correct returns. At this time of year when the American public is focusing on filing their tax returns, those taxpayers who choose to the do the right thing should be confident that the tax system works. As indicated by this case, IRS Criminal Investigation serves the public by actively investigating those that willfully fail to file income tax returns and pay their fair share."

DEFENDANT

Stephen Hundley
Poway, California

SUMMARY OF CHARGES

Title 26, United States Code, Section 7203, Failure to File an Income Tax Return.
Maximum sentence of one year in prison and fine not to exceed $100,000 per count.

AGENCY

Internal Revenue Service, Criminal Investigation