September 16, 2004

Florence Accountant Pleads Guilty to Tax Charges

Jackson, TN - Terrell L. Harris, U.S. Attorney for the Western District of Tennessee, and Sherree W. Preston, Special Agent in Charge for IRS Criminal Investigation Nashville Field Office, announced that Steve L. Newell, of Florence, Alabama, pled guilty today before U.S. District Judge James D. Todd. Newell pled guilty to all four counts on an Information filed in court for today’s plea.

According to the Information filed in court, Steve Newell knowingly made and presented and caused to be made and presented to the Internal Revenue Service claims against the United States for payments. On or about January 22, 2001, Newell prepared and caused to be prepared and caused to be filed a purported IRS Form 941 (Employer’s Quarterly Federal Tax Return) claiming a tax refund in the amount of $24,036.02. On or about April 24, 2001, Newell again prepared or caused to be prepared and caused to be filed a purported IRS Form 941 (Employer’s Quarterly Tax Return) claiming a false refund in the amount of $5,284.27. On or about July 30, 2001, Newell prepared and caused to be prepared and caused to be filed a purported IRS Form 941 (Employer’s Quarterly Tax Return) claiming a false refund in the amount of $7.917.00. On or about October 23, 2001, Newell again prepared or caused to be prepared and caused to be filed a purported IRS Form 941 (Employer’s Quarterly Federal Tax Return) with the Internal Revenue Service claiming a false tax refund in the amount of $14,651.93. The Information alleges that Newell knew that these claims were false, fictitious and fraudulent.

Newell previously pled guilty to an Information filed in court for lying to the court when he testified under oath on May 28, 2002 that he had been diagnosed on April 25, with melanoma. Newell twice submitted to the court an affidavit purportedly signed by Dr. William Welborn on September 18, 2002, stating that Newell was suffering from terminal cancer and had approximately three months to live. Newell was not suffering from cancer and Dr. Welborn had not signed the affidavit. Newell also submitted medical records to the court indicating that he was being treated by Dr. J. Patrick Daugherty for cancer when in truth he had never been treated by Dr. Daugherty.

Newell also previously pled guilty to obstructing justice by causing his attorney Jeff Mueller to file false and fictitious motions with the court alleging that he was suffering from terminal cancer. Newell also caused two motions to be mailed to the court by his attorney with letters attached purportedly bearing the signatures of the doctors. On the day he was arrested, Newell lied to IRS Criminal Investigation Special Agent Blanche Wilson, stating that there were no firearms in his place of business, when in fact, as he knew, there were firearms in the business at that time. The final count deals with Newell disobeying a lawful order of the court when he was directed to not perform any further tax work. According to the information, Newell performed and conducted tax work on behalf of his clients in violation of the court order.

Newell is scheduled to be sentenced on October 29, 2004. He faces a maximum penalty of 50 years in prison and a fine of $2,250,000 on nine counts in the first information. Newell also faces a maximum penalty of 20 years in prison and a fine of $1,000,000 on the four counts of the information filed in court on September 16, 2004. Judge Todd has the discretion to impose any number of years on the charge relating to Newell’s disobeying a lawful court order.

This investigation was conducted by IRS Criminal Investigation. Assistant U.S. Attorney Stephen Parker represented the government.

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