COLUMBUS -- Former Columbus corporate attorney and tax lawyer Larry K. Carnahan, age 52 of Westerville, was sentenced to 27 months imprisonment and ordered to pay a $6,000 fine today for his role in a multi-million dollar fraud involving National Revenue Corporation.

Gregory G. Lockhart, United States Attorney for the Southern District of Ohio, in conjunction with Cromwell A. Handy, Special Agent in Charge, Internal Revenue Service--Criminal Investigation Division, and Elissa A. Brown, Special Agent in Charge, United States Customs Service, Office of Investigations, announced the sentence handed down by U.S. District Judge Algenon L. Marbley.

Carnahan pled guilty last September to a two-count information charging him with conspiring to defraud the United States for the purpose of impeding, impairing, obstructing and defeating the lawful government functions of the Internal Revenue Service, and aiding and assisting in the preparation of a false tax return for National Revenue Corporation president Richard D. Schultz. National Revenue Corporation was a collections agency headquartered in Columbus.

According to evidence presented to Judge Marbley in court today, in June 1994, a California federal judge awarded approximately $5-million in attorneys' fees and interests to Schultz's opponents in civil litigation. As Carnahan admitted to the Honorable James L. Graham when he pleaded guilty, he and others assisted Schultz in concealing millions of dollars from Schultz's judgment creditors, the IRS and others. These fraudulent transactions resulted in the filing of tax returns with substantial false deductions.

Instead of actually losing money through "bad" business deals, the fraudulent transactions were used to conceal Richard Schultz's true ownership interest in millions of dollars disguised as his father's money in a New York escrow account or transferred through bank accounts in Canada to offshore bank accounts in the Caribbean in the names of corporations controlled by Schultz through others.

At today's hearing, Judge Marbley denied Carnahan's motions to reduce his sentence based on his claim of a minor role in the criminal conduct and based on what Carnahan's lawyer described as aberrant conduct. Judge Marbley was presented with transcripts from an August 1996 domestic relations case in which Carnahan testified falsely before Judge Susan Brown, Franklin County Court of Common Pleas, at a trial in Marva R. Schultz v. Richard D. Schultz. Carnahan voluntarily surrendered his license to practice law.