CINCINNATI – Phillip and Joanne Caldwell, ages 48 and 41, of Lebanon, Ohio, pled guilty here today in United States District Court to a one-count Information charging them with conspiracy to defraud the United States for the purposes of committing tax fraud from 1999 to 2003.

Gregory G. Lockhart, United States Attorney for the Southern District of Ohio, and Cromwell A. Handy, Special Agent in Charge, Internal Revenue Service (IRS) Criminal Investigation, announced the plea entered before Senior United States District Judge S. Arthur Spiegel.

Phillip Caldwell is a former Certified Public Accountant who has worked in the tax and accounting field since the 1980's. His wife, Joanne Caldwell, is a computer programmer who has worked for various companies in the southwestern Ohio area since the late 1980's. Both formerly worked at Fernald.

The Caldwells admitted that they conspired with each other and co-defendant John Huber, age 36, of Dayton, Ohio, to defraud the United States for the purposes of impeding and impairing the Internal Revenue Service by, among other things, concealing Joanne Caldwell's income through the use of nominee companies, trusts and trustees.

In addition, the Caldwells admitted that they failed to file individual income tax returns reporting the income they earned during the years 1993 through 2001. In addition, they admitted preparing and submitting W-4 forms to their employer, Fernald, during the years 1995 and 1996 falsely claiming exempt status without a legal or factual basis. They also used cash extensively in an effort to conceal their income from the IRS from 1993 through 2001.

In 1993 the Caldwells joined The Freedom Connection, a well-known tax protest organization operating out of the Southern District of Ohio. The organization was headed by Thomas Jeff Frisby, whom they knew and was later convicted of tax crimes in Cincinnati. They admitted closing all their interest bearing personal bank accounts, and attempted to revoke their social security numbers with the Social Security Administration along with their taxpayer status with the IRS. They then formed nominee trusts and sheltered their personal and business income and activities through these trusts and their respective bank accounts. Finally, the Caldwells had nominee trustees appointed to these trusts, but maintained exclusive control over the corpus of these trusts, and were the beneficiaries of the payments made by the trusts.

In addition, Joanne Caldwell admitted that she submitted two forms to her employers, one falsely claiming to be a foreign citizen, and one falsely claiming to be a non-resident alien, despite the fact that she was a U.S. Citizen, and continued to reside in Ohio. Moreover, Phillip Caldwell admitted to providing backdated documents to his brother-in-law prior to his brother-in-law's appearance before the grand jury.

The conspiracy count to which the Caldwell's pleaded guilty to carries a maximum penalty of five years of imprisonment, and a $250,000 fine.

Further questions may be directed to trial attorney Rich Rolwing of the U.S. Department of Justice, Tax Division, Washington, D.C., at (614) 469-5715.

For additional comment contact Fred Alverson, Public Affairs Officer at 614.469.5715. The Internet address for the homepage for the United States Attorney's Office for the Southern District of Ohio is www.usdoj.gov/usao/ohs.