U.S. Department of Justice
United States Attorney's Office
District of Delaware

Chase Manhattan Centre
1201 Market Street, Suite 1100
P.O. Box 2046
Wilmington, Delaware 19899-2046

Telephone (302) 573-6277
FAX (302) 573-6220

FOR IMMEDIATE RELEASE

Thursday, January 8, 2004

Colm F. Connolly, United States Attorney for the District of Delaware announced that a federal jury today convicted Donald L. Donovan, 53, former owner of a company that constructed pre-engineered steel buildings in the Seaford, Delaware area, of four counts of attempted tax evasion for the calendar years 1996, 1997, 1998, and 1999. Additionally, Donovan was convicted of four counts of willful failure to file an income tax return for the same years. Judge Kent A. Jordan has set sentencing for April 8, 2004. The maximum penalty for each of the tax evasion charges is five years imprisonment, a fine of $250,000, and the costs of prosecution. The maximum penalty for each charge of willful failure to file is one year imprisonment, a fine of $100,000, and the costs of prosecution.

According to the scheme set forth in the Indictment and the evidence introduced at trial, Donovan filed to file timely federal personal income tax returns for calendar years 1996, 1997, 1998, and 1999. Additionally, according to the government's evidence, Donovan took steps to conceal his income from the IRS, including using a personal bank account that listed a fictitious social security number, opening a bank account and post office box under a fictitious name, and providing a customer with a false social security number for use on a Form 1099. In convicting Donovan, the jury rejected his defense that the federal income tax laws do not apply to him.

U.S. Attorney Connolly said: "Tax crimes are not victimless crimes. The honest taxpayers of this district and elsewhere are victims whenever dishonest individuals fail to report fully their income and thus pay the taxes they owe to the U.S. Treasury. The investigation and prosecution of tax crimes places an enormous burden on the government, including the courts. It is the government's desire to promote compliance with the tax laws by demonstrating that tax fraud is a serious crime. While most Americans are honest taxpayers who comply with the internal revenue laws, there are some who believe that they can get away with tax fraud because it is worth the risk. When tax evasion schemes, such as the one in which the defendant was engaged, are uncovered, those tax evaders must be prosecuted vigorously so that others who may be contemplating similar schemes are deterred."

This case was investigated by special agents of the Internal Revenue Service, Criminal Investigation and was prosecuted by U.S. Department of Justice Tax Division attorneys Andrew Kameros and Shawn Noud.

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