California Businessman Pleads Guilty to Conspiracy to Defraud the Internal Revenue Service
The Justice Department announced today that Gary Mach, a Palm Desert, Calif. resident who operated Crystal Springs Pool Service (CSPS), pleaded guilty to conspiracy to defraud the Internal Revenue Service (IRS).
According to the plea agreement, beginning around January 2002 and continuing through December 2010, Mach failed to report substantial income he earned from CSPS, a pool servicing business operated throughout Riverside County, Calif. Mach and others established fictitious trusts which they used to receive income and hold assets in an attempt to conceal the assets and income from the IRS.
According to court documents, Mach purported to operate a trust called “Quintessential,” and directed that his paychecks be made payable to Quintessential. He also opened a bank account in the name of Quintessential where he deposited CSPS proceeds. Mach admits that he did not report to the IRS any of the income he earned from CSPS between 2002 and 2010 and used Quintessential to conceal income from the IRS. In furtherance of the conspiracy, Mach also attempted to impede an IRS summons issued to a bank for business account records. Mach closed his bank account after the bank complied with the IRS summons.
As stated in the plea agreement, the agreed upon total unreported income for the tax years 2002 through 2010 is $1,410,430 and the total tax due and owing is $270,725. Mach has also agreed that he should be ordered to pay restitution for the amount of total tax due and owing.
Mach’s sentencing is scheduled for Nov. 14, 2013, before U.S. District Judge John A. Kronstadt and he faces a maximum penalty of five years in prison, three years of supervised release and a fine of $250,000 or twice the gain or loss resulting from his offense.
Kathryn Keneally, Assistant Attorney General for the Justice Department's Tax Division, commended the efforts of special agents of IRS - Criminal Investigation, who investigated the case, Tax Division Trial Attorneys Sonia M. Owens and Mark L. Williams, who prosecuted the case, and Assistant U.S. Attorneys Sandra R. Brown and Paul Rochmes of the U.S. Attorney’s Office for the Central District of California, who assisted with the prosecution.