COLUMBUS -- A Florida businessman and a Canadian corporation pled guilty to conspiracy charges today in connection with a scheme by Richard D. Schultz, former CEO of National Revenue Corporation, to conceal millions of dollars in an attempt to defraud creditors and the Internal Revenue Service.

Francis J. McPeak, 62, of Clearwater, Florida, and Cedarwood Acquisition Corporation of Toronto, Canada, entered pleas of guilty today before the Honorable Algenon L. Marbley, U.S. District Judge for the Southern District of Ohio. McPeak pleaded guilty to two conspiracy charges regarding schemes to defraud Schultz's creditors and the IRS. Through a corporate representative, Cedarwood Acquisition Corporation pleaded guilty to a money laundering conspiracy.

McPeak admitted to assisting Schultz beginning in 1995 to defraud the IRS and Schultz's creditors through concealing millions of dollars Schultz's assets through "strawmen" and offshore bank accounts. McPeak also admitted to paying some of Schultz's personal expenses and then disguising those expenses as business expenses on corporate tax returns. McPeak used corporations in the Cayman Islands, including Sandpiper Ltd., to receive and transfer funds related to the scheme.

According to the statement of facts presented by Special Agent Dennis Hanzel of the IRS Criminal Investigations, Cedarwood Acquisition Corporation was incorporated in August 1997 and participated in a money laundering conspiracy to assist Schultz in defrauding his judgment creditors and repatriating funds to the United States through foreign bank accounts. Cedarwood

Acquisition agreed to the criminal forfeiture of all property used in connection with money laundering conspiracy and to the mandatory payment of restitution to fraud victims.

A number of persons, including Schultz, have been convicted of various federal charges in connection with this case. On September 13, 2002, Judge Marbley had sentenced Richard Schultz, 52, of Westerville to 30 months imprisonment, and ordered him to pay $1.26 million in restitution to the IRS, serve 416 hours of community service and pay a $28,500 fine, in connection with Schultz's guilty plea on August 9, 2001, to filing a false income tax return in 1994 in connection with the scheme. Between 1994 and 1998, Richard Schultz was President and Chief Executive Order of National Revenue Corporation, a Columbus-based collections agency.

Also on September 13, 2002, Thomas Schultz, 45, of Powell, Ohio, was sentenced to 24 months in prison, fined $7,500 and ordered to serve 416 hours of community service for his crimes. Thomas Schultz was a Vice President at National Revenue Corporation from1994 to 1998. Thomas Schultz assisted Richard Schultz in concealing millions of dollars in offshore bank accounts, including accounts in the Bahamas and Cayman Islands. In August 2001, Thomas Schultz pled guilty to conspiracy, failure to disclose foreign financial accounts, and obstruction of justice.

Others convicted in the scheme include Larry K. Carnahan, formerly of Westerville, Ohio, who pleaded guilty to conspiracy and tax charges and was sentenced by Judge Marbley last year to 27 months in prison. Two other individuals, a London Solicitor and a Canadian businessman pleaded guilty to federal charges and are awaiting sentencing. On July 14, 2003, three other individuals, Domenic Massari of Tampa, Florida, Ron Bogart of Toronto, Canada, and Martin W. Elson of Cleveland, Ohio, are scheduled to be tried before Judge Marbley on charges stemming from the criminal conspiracies to hide Schultz's assets and defraud his creditors, the IRS and others.

Gregory G. Lockhart, United States Attorney for the Southern District of Ohio, Michael Chertoff, Assistant Attorney General for the Criminal Division, and Eileen J. O'Connor, Assistant Attorney General for the Tax Division, along with Cromwell Handy, Special Agent in Charge, Internal Revenue Service; and Elissa Brown, Special Agent in Charge, Bureau of Immigration and Customs Enforcement, announced the guilty pleas.

Lockhart commended the agents of the IRS Criminal Investigation Division and the Bureau of Immigration and Customs Enforcement agents who investigated the case.

News releases from the U.S. Attorney's Office are available at www.usdoj.gov/usao/ohs/.