FOR IMMEDIATE RELEASE
October 7, 2004
COLORADO SPRINGS RESIDENTS INDICTED FOR CONSPIRACY TO DEFRAUD THE UNITED STATES AND TAX EVASION
DENVER – John Suthers, United States Attorney for the District of Colorado, and Terry L. Stuart, Special Agent In Charge of the IRS-Criminal Investigation, Denver Field Office, announced that CHARLES WILLIAM LEDFORD (aka BILL LEDFORD), age 56, and his wife, LORAINE PACHECO LEDFORD, age 56, both of Florissant, Colorado, were indicted by a federal grand jury on October 4, 2004, charged with one count of conspiracy to defraud the United States and four counts of tax evasion. The LEDFORD’s were arrested this morning without incident by Special Agents of the IRS-Criminal Investigations.
According to the indictment, CHARLES and LORAINE LEDFORD were co-owners of Service Engineering, Ltd., a heating ventilation air conditioning (HVAC) service and sales business in Colorado Springs, Colorado. From 1976 through 1991 the LEDFORD’s filed corporate and personal tax returns. In 1992 the LEDFORD’s owed the IRS $1,755 in personal income taxes. They then failed to file personal income tax returns for 1993, 1994 and 1995. In 1998 the IRS notified the LEDFORD’s that they each owed $531,369 in taxes for years 1993 through 1995, totaling $1,062,738. This amount was based on the money they personally received from their business. The LEDFORD’s were also advised that their company, Service Engineering, owed taxes totaling $391,468.
During the course of the investigation it was determined that the LEDFORD’s created a number of trusts within the State of Utah to conceal their income and assets. As part of the conspiracy to defraud the United States, the defendants allegedly transferred their company, Service Engineering, Ltd., as well as real and personal assets, to the trusts they established. The defendants then allegedly took distributions from the various trusts for cash and personal expenses. These distributions were not reported to the IRS as income. Some of the distributions were used to build a new home, pay for their son’s college tuition, and to pay Teller County property taxes. The LEDFORD’s would only file tax returns for the trust associated with Service Engineering, Ltd. No other income tax returns were filed.
“The defendants in this case are charged with devising a scheme to intentionally and fraudulently avoid paying taxes,” United States Attorney John Suthers said. “Those who fraudulently avoid paying taxes face civil penalties and criminal prosecution.”
“This indictment reminds us that fulfilling individual tax obligations is a legal requirement, and those who willfully evade that responsibility will be prosecuted,” said Terry L. Stuart, Special Agent in Charge, Denver Field Office, IRS-Criminal Investigation Division.
If convicted, the LEDFORD’s each face up to five years in federal prison and/or a $250,000 fine for conspiracy to defraud the United States, and not more than five years in prison and/or a $100,000 fine for each of the four counts of tax evasion. They also could be ordered to pay the government the costs for their prosecution.
The LEDFORD case was investigated by the IRS-Criminal Investigations. The case is being prosecuted by Assistant United States Attorney David Steinman.
The charges are only allegations and the defendants are presumed innocent unless and until proven guilty.
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