NEWS RELEASE

FOR IMMEDIATE RELEASE July 30, 2003

CONTACT:

William W. Mercer United States Attorney for the District of Montana (406) 247-4639

 

 

 

GLENN WINSTEAD PLEADS GUILTY IN U.S. FEDERAL COURT

       Bill Mercer, United States Attorney for the District of Montana, announced today that during a federal court session in Great Falls, on July 24, 2003, before U.S. District Judge Sam E. Haddon, GLEN WINSTEAD, M.D., pled guilty to charges of tax evasion.

       During the hearing, WINSTEAD acknowledged that on December 18, 1997, and thereafter, in the State of Montana, WINSTEAD, a resident of Montana, did willfully attempt to evade and defeat the payment of a large part of the income tax due and owing by him to the United States for the calendar years 1987, 1991, 1992 and 1993, in the amount of $98,790.00 (not including penalties and interest). For the purpose of evading tax that had been assessed based upon returns filed for those periods WINSTEAD concealed or attempted to conceal from the IRS the extent of his income and assets and their location by placing his income and assets into a nominee corporation name, that is, Grey Forrest Corp. WINSTEAD filed returns for 1987, 1991, 1992 and 1993 reported income tax liabilities.

       Specifically beginning in 1993, WINSTEAD, with the help of another person, created the entity Grey Forest Corp. and assigned his income to it for purposes of evading the payment and assessment of taxes. In an agreement dated December 23, 1993, between Grey Forest Corp. and WINSTEAD, WINSTEAD agreed to act as an independent contractor for Grey Forest and Grey Forest agreed to manage WINSTEAD's financial affairs. Grey Forest agreed to pay WINSTEAD $4,000 per month for his services, or $48,000 annually. By agreement dated July 19, 1994, one day after the 1993 income tax liability was assessed, WINSTEAD entered into an agreement between himself and Columbus Hospital wherein WINSTEAD assigned all of his income to Grey Forest Corp. On December 18, 1997, WINSTEAD sent a note to Northern Montana Hospital directing them to pay his earnings to Grey Forest Corp. In return, Grey Forest received $136,000 for 1995; $166,000 for 1996; and $123,000 for 1997.

       On May 6, 1997, WINSTEAD filed for bankruptcy to discharge his tax liability and in that filing admitted he owed $287,669 to the IRS. During an undercover operation, WINSTEAD hiding earned income, like in his own situation, is tougher than if the income is investment income. WINSTEAD also stated: ". . . [y]ou have a license to be creative . . . it's driving the IRS absolutely insane, it's because there's no way they can catch 'em"; that he "has been doing it maybe five years" and that he "has not paid any tax at all."

       During the undercover operation, an officer who was working in an undercover capacity, asked WINSTEAD, "Okay. And as a client, are you satisfied? Are you saying it works well?" WINSTEAD replied:

       I'm saying the IRS has not been able to touch me, the State of Montana has not been able to touch me. And as far as they know, as far as the books show, I haven't done anything illegal to worry about. I sleep at night. Not anybody can touch me. [He's got] this thing down to where it's bullet proof. If you just let...start [you] through the system, they can't, they can't touch you.

       He faces possible penalties of 5 years in prison, a $100,000 fine and 3 years supervised release.

       U.S. Attorney Bill Mercer and Assistant U.S. Attorney Jim Seykora prosecuted the case for the United States.

       The investigation was conducted by the Internal Revenue Service Criminal Investigation Division.

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       For a copy of the Offer of Proof contact Beth Binstock at (406) 247-4653