Carol C. Lam, United States Attorney for the Southern District of California, and Eileen J. O'Connor, Assistant Attorney General for the Tax Division, announced today that the Honorable Jeffrey T. Miller, United States District Court Judge, sentenced Dr. Rick A. Shacket, D.O. to 33 months of imprisonment for federal criminal tax offenses of which he was convicted earlier this year. He was also placed on supervised release for three years, to follow completion of his sentence. In June 2002, Dr. Shacket pled guilty to a conspiracy to defraud the Internal Revenue Service. During his guilty plea, Dr. Shacket admitted to participating in a tax fraud conspiracy with his former attorney, Russell D. Ward, from February 1994 through January 1999, resulting in a criminal tax loss of over $370,000. As a part of the conspiracy, Dr. Shacket and Mr. Ward fraudulently diverted approximately $546,350 of Dr. Shacket's medical corporation's funds to Dr. Shacket's own use and benefit in 1994 through 1997. Dr. Shacket, owner and medical director of the Hemorrhoid Care Medical Clinic located at 7808 Clairemont Mesa Boulevard, in San Diego County, specializes in proctology and laser surgery. As part of his guilty plea, Dr. Shacket has paid the government approximately $370,000 in back taxes and still owes penalties and interest. Russell Ward pled guilty to this same conspiracy on July 25, 2001, and is now serving his sentence in federal prison.

Dr. Shacket further admitted during his guilty plea that the conspiracy to defraud the United States and the Internal Revenue Service included willfully filing false corporate and individual tax returns for the years 1994 through 1997. Dr. Shacket also admitted that he and Mr. Ward created a sham corporation in Oregon called King Medical and a false identity for Dr. Shacket. The false identity Dr. Shacket used was "Billy Daniel Ward," the name of the missing and presumed dead brother of Russell Ward. Dr. Shacket used King Medical and the Billy Daniel Ward false identity to receive and hide from the IRS corporate funds diverted from his medical practice. Dr. Shacket fraudulently deducted the diverted funds on his corporate tax returns, and did not report his receipt of these funds on his personal tax returns. Dr. Shacket used these diverted funds to purchase personal assets, including a house in Del Mar, California, for approximately $342,500 using cashier's checks. Dr. Shacket, however, placed the title of his home in Del Mar in the name of both his brother and Dr. Shacket's assumed identity, in order to conceal the purchase of this home from the Internal Revenue Service. Moreover, Dr. Shacket also diverted an additional $150,000 of his medical corporation's funds in 1998 to his own use and benefit.

During his guilty plea, Dr. Shacket admitted that three different types of claims he submitted to Civilian Health and Medical Program of the Uniformed Services ("CHAMPUS") were erroneous under CHAMPUS's guidelines and policies. Dr. Shacket agreed to settle the matter civilly with CHAMPUS and on July 25, 2002, paid the United States $29,999.00 in a civil settlement. CHAMPUS (now known as "Tricare") is a federally funded medical benefits program administered by the United States Department of Defense to help pay for the civilian medical care rendered to spouses and children of active duty service personnel, retired service personnel and their spouses and children, and to the spouses and children of deceased service personnel.

Carol C. Lam, United States Attorney for the Southern District of California, stated: "Dr. Shacket committed serious tax and health care frauds against the government. Our view was always that he should pay a heavy price for that, and now he will."

Denise L. Rubin, Special Agent in Charge of IRS Criminal Investigation in San Diego stated: "Conspiracy to defraud the United States is a serous crime. In this case IRS Agents used their financial investigative expertise to unravel Dr. Shacket's web of transactions in this tax fraud scheme. IRS Criminal Investigation will continue to aggressively investigate professionals who create elaborate schemes to intentionally evade their income taxes."

DEFENDANT

Rick A. Shacket
San Diego, California

SUMMARY OF CHARGES

Title 18 United States Code, Section 371, Conspiracy to Defraud the United States (one count)

Maximum sentence of five years in prison and a fine not to exceed $250,000.

AGENCIES

Internal Revenue Service, Criminal Investigation.
Department of Defense, Defense Criminal Investigative Service.