United States Attorney
Northern District of Texas

1100 Commerce St., 3rd Fl.
Dallas, Texas 75242-1699

Telephone (214) 659-8600
Fax (214) 767-0978

Dallas Businessman Pleads Guilty to Federal Tax Charge
and Agrees to Pay $1.8 Million to IRS as Part of Plea Agreement

John Hayden LaRue, Jr., a Dallas businessman, pled guilty in federal court to three counts of failing to file an income tax return, announced United States Attorney Richard B. Roper. In entering his guilty plea before United States District Judge Sidney A. Fitzwater, LaRue, the owner of Medical Contracting Services, Inc., (MCS) in Dallas, admitted that he knew of the requirement to file a federal income tax return and that he voluntarily and intentionally failed to do so. As part of his plea agreement with the government, LaRue has agreed to pay restitution to the Internal Revenue Service in the amount of $1,811,189.00 prior to his sentencing. He is scheduled to be sentenced on January 19, 2007 by Judge Fitzwater and he faces up to three years imprisonment.

Specifically, court documents state that LaRue knew that MCS was not exempt from tax and that he knew he was therefore required by law to file a tax return for MCS for calendar years 1999, 2000 and 2001, stating specifically the items of MCS’s gross income and the deductions and credits allowed by law. LaRue admitted that he failed to file these returns.

The case was investigated by Internal Revenue Service - Criminal Investigation and prosecuted by Assistant United States Attorney Lynn Hastings.

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