Colorado Tax Evader Convicted of Tax Crimes for Failing to Disclose More than $2 Million in Income to the IRS
A federal jury sitting in Denver convicted a Grand Junction, Colorado, man yesterday of two counts of tax evasion, three counts of willful failure to file an individual federal income tax return and three counts of willful failure to file a corporate income tax return, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division.
According to the evidence presented at trial, Timothy John Stubbs was the owner and president of National Rebate Fund Inc., based in Grand Junction, during 2005 through 2007. National Rebate Fund contracted with merchants of energy-efficient and other products to provide third-party rebates to retail customers throughout the United States. The company made more than $7 million in gross receipts between 2005 and 2007.
Stubbs earned more than $2 million in taxable income from National Rebate Fund during those same years. In an attempt to evade his taxes, Stubbs disguised personal income that he received from the National Rebate Fund by using business accounts to pay more than $700,000 in personal expenses during 2005, 2006 and 2007. During those years, Stubbs purchased real estate valued at more than $2.9 million in Grand Junction, Crested Butte, Colorado, and Kailua-Kona, Hawaii. He also acquired more than $370,000 in gold and silver in 2007. Between April 2004 and October 2007, Stubbs’ net worth increased by more than $3 million.
The evidence at trial established that Stubbs did not file his own tax returns or corporate tax returns on behalf of National Rebate Fund for 2005, 2006 and 2007, and has not filed an individual income tax return since 1992 or paid income taxes since 1993.
At sentencing, Stubbs faces a statutory maximum sentence of five years in prison and a maximum fine of $250,000 for each count of tax evasion and a statutory maximum sentence of one year in prison and a maximum fine of $100,000 for each count of failure to file an income tax return. U.S. District Judge Christine M. Arguello of the District of Colorado set Stubbs’ sentencing for Dec. 17.
Acting Assistant Attorney General Ciraolo commended special agents of IRS-Criminal Investigation, who investigated the case, and Trial Attorneys Lori A. Hendrickson and Leslie Goemaat of the Tax Division, who are prosecuting the case. Ciraolo also thanked the U.S. Attorney’s Office of the District of Colorado for their substantial assistance.