former branson west business owner sentenced
for filing false tax return
SPRINGFIELD, Mo. – Beth Phillips, United States Attorney for the Western District of Missouri, announced that a former Branson West, Mo., man was sentenced in federal court today for filing a false federal income tax return after earning more than $4 million but paying only $1,000 in taxes over a five-year period.
Randall L. Pennington, 51, of Houston, Texas, formerly of Branson West, was sentenced by U.S. District Judge Richard E. Dorr to 18 months in federal prison without parole. The court also ordered Pennington to pay $525,125 in restitution to the IRS.
Pennington owned Total Balance Orthotics, which was in the business of selling orthotic shoe inserts. Pennington admitted that he earned more than $4 million during the five-year period from 2000 to 2004, for which he owed nearly $318,000 in income and self-employment taxes, but paid only $1,000 in taxes for 2002. Pennington pleaded guilty on Feb. 16, 2011, to filing a false 2002 income tax return in 2006, but under the terms of the plea agreement the court considered the total tax harm from 2000 to 2004 as relevant conduct for purposes of determining an appropriate sentence.
The return filed for 2002 was false; it significantly understated Pennington’s income from his business and his gambling income. According to the plea agreement, Pennington had $962,274 in gross income in 2002, which resulted in $26,388 owed in taxes, though he only paid $1,000. Pennington admitted that, although he used seven bank accounts in 2002, he only gave his return preparer information on two of the accounts. He also funneled more than $50,000 of business receipts through another person’s account. Pennington also admitted that he used a transposed version of his actual Social Security number when providing identifying information to casinos for reporting his gambling winnings. As a result, $23,200 in gambling winnings was not reported on Pennington’s tax return.
This case was prosecuted by Assistant U.S. Attorney Steven M. Mohlhenrich. It was investigated by IRS-Criminal Investigation and IRS Special Enforcement Program.
