fayetteville couple pleads guilty to obstructing the tax laws
NEW BERN - United States Attorney Thomas G. Walker announced that in federal court on September 10, 2012 Michael L. Thomas, 54, and his wife, Carolyn S. Thomas, 56, both of Fayetteville, North Carolina, pled guilty before United States Magistrate Judge Robert B. Jones, Jr., to corruptly obstructing and impeding the due administration of the Internal Revenue laws, in violation of Title 26, United States Code, Section 7212(a).
“The United States Attorney’s Office will continue to vigorously prosecute those who falsify or fail to file tax returns,” commented U.S. Attorney Walker. “The case against these individuals clearly demonstrates that nobody is exempt from accurately filing their federal tax returns.”
The investigation revealed that in 2005, Michael and Carolyn Thomas began marketing purported “debt elimination” programs for a company based in Columbia, South Carolina, the Capital Consortium Group (CCG). From approximately 2004 to 2008, CCG perpetrated an $80 million Ponzi scheme. CCG’s three principals were indicted by a federal grand jury in South Carolina in 2008 and convicted at trial in 2009. The Thomases were among the most prominent and successful of CCG’s marketers, with upwards of 1,000 customers and high six-figure commissions in 2006 and 2007. While Michael and Carolyn Thomas were profiting from their association with CCG, they filed a false federal income tax return for tax year 2005 in which they omitted most, if not all, of their CCG commissions. Then the Thomases stopped filing tax returns altogether until March 2009, when they submitted a false amended 2005 return, a false 2006 return, and a false 2007 return. Each return significantly underreported the Thomases’ CCG commissions and claimed large tax refunds based on fraudulent Forms 1099-OID. The Thomases also filed bogus financial instruments with the IRS in purported payment of their tax debts, including false bonds with stated face values ranging from $300 million to $100 billion.
At sentencing Michael and Carolyn Thomas each face a maximum penalty of 3 years imprisonment, a $250,000 fine, 1 year of supervised release, and $100.00 special assessment.
The investigation of this case was conducted by the Internal Revenue Service, Criminal Investigation. The case is being prosecuted by Trial Attorney Adam F. Hulbig of the Justice Department’s Tax Division in Washington, D.C.
