Contact:
Julie Ann Woods
Assistant United States Attorney
(616) 456-2404

or

Stephen Moore
IRS CI Public Information Officer
(313) 234 2410

FOR IMMEDIATE RELEASE

Kalamazoo, Michigan, January 12, 2006 - United States Attorney Margaret M. Chiara and Maurice M. Aouate, Special Agent in Charge, Internal Revenue Service, Criminal Investigation, announced today that Lynn N. Ealy, 52, of Cedar, Michigan, was sentenced to 27 months’ imprisonment, followed by two years of supervised release. He was also ordered to pay restitution of $84,174 to the Internal Revenue Service. This sentence was imposed by United States District Court Judge Richard Alan Enslen, who remanded Mr. Ealy to the custody of the U.S. Marshals Service to begin his sentence. On August 12, 2005, Mr. Ealy was found guilty by a federal jury on three counts of federal income tax evasion for the years 1999, 2000, and 2001.

The jury was presented with evidence that during 1999 through 2001, Mr. Ealy, a builder and carpenter who operated God's Country Builders, Traverse City, Michigan, earned approximately $239,000, but, since 1993, stopped filing income tax returns. During this time period, Mr. Ealy corresponded with the Internal Revenue Service claiming that he was exempt from taxation, that the tax laws were unconstitutional, and asserting that he was not a citizen of the United States. Other affirmative acts of evasion included Mr. Ealy refusing to provide his social security number to employers or general contractors and instructing them not to issue W-2 forms or Forms 1099 in his name. He also created a sham trust, transferring his personal funds into the account and using it to pay his everyday expenses. In 2002, Mr. Ealy notified the IRS that his name had been copyrighted and that if the IRS used his name for any purpose, the IRS would be subject to a $500,000 fee.

Mr. Aouate stated, "The courts have consistently and unanimously held that these anti-tax arguments are frivolous. The anti-tax individuals continue to disregard the obvious that they must report their income to the IRS and use these arguments as an excuse for their greed." Ms. Chiara commended the special agents of the Internal Revenue Service, Criminal Investigation, for their work on this investigation and prosecution.

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