June 15, 2004

PRESS RELEASE

FORMER CAPE COD PHYSICIAN CONVICTED ON TAX CHARGES

Boston, MA... A former Centerville physician pleaded guilty in federal court today to a three-count Information charging him with failing to file individual income tax returns in 1997, 1998 and 1999 despite earning more than $800,000 in gross income during those years.

United States Attorney Michael J. Sullivan and Joseph A. Galasso, Special Agent in Charge of the U.S. Internal Revenue Service, Criminal Investigation, announced that KENNETH E. SMITH, age 59, formerly of Osterville and Centerville, Massachusetts, and currently of Hilton Head, South Carolina, pleaded guilty before U.S. Magistrate Judge Lawrence P. Cohen to a three-count Information charging him with the willful failure to file U.S. Individual Income Tax Returns.

At the plea hearing, the prosecutor told the Court that, had the case proceeded to trial, the evidence would have proven that SMITH was a physician who owned and operated a Cape Cod-based medical practice named Hyannis OB-GYN Associates, P.C. During each of the years from 1997 through 1999, SMITH received income, including income from the operations of Hyannis OB-GYN, that exceeded the minimum amount necessary to trigger a legal obligation on his part to file an individual income tax return with the IRS. The combined amount of SMITH's gross income over the three-year period exceeded $800,000. Notwithstanding his receipt of that income, SMITH did not file tax returns timely reporting his income, nor did he pay the taxes that were due and owing on the income.

U.S. Magistrate Judge Cohen scheduled sentencing for October 13, 2004. SMITH faces up to 1 year imprisonment on each of the three counts.

The case was investigated by the U.S. Internal Revenue Service, Criminal Investigation and is being prosecuted by Assistant U.S. Attorney Michael J. Pineault in Sullivan's Economic Crimes Unit.

Press Contact: Samantha Martin, (617) 748-3139