Maryland Auto Parts and Scrap Metal Dealers Convicted of Tax Fraud
Dealt in Cash and Underreported Gross Receipts
A married Clinton couple were convicted by a federal jury today of one count of conspiracy to defraud the Internal Revenue Service (IRS) and four counts of filing false income tax returns, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division and U.S. Attorney Robert K. Hur for the District of Maryland.
“The jury’s guilty verdicts embody the formidable commitment of the Tax Division, along with its partners in the United States Attorney’s Office and the IRS, to prosecute business owners, who cheat the tax system in violation of our criminal laws and in doing so also gain an unfair advantage over other small business owners,” stated Principal Deputy Assistant Attorney General Zuckerman.
“When criminals cheat the IRS, they rob all of us as taxpayers,” said U.S. Attorney Robert K. Hur. “Prosecutions like this demonstrate that we will not tolerate those who attempt to cheat the system and will hopefully deter others from stealing taxpayer funds.”
“Choosing not to pay your taxes and causing hardworking taxpayers to bear the brunt cannot be tolerated and today’s verdict reinforces that principle,” said Don Fort, Chief, IRS Criminal Investigation. “The conviction of the Underwoods validates the most basic principle of our agreement with the American public that everyone must pay their fair share and we will hold those who cheat the system accountable.”
According to court documents and evidence presented in court, the Underwoods operated a used automobile parts and scrap metal business in Clinton under the names “B Underwood’s Used Auto Parts” and “B Underwood Used Auto Parts LLC.” The business purchased used and salvage cars, stripped the cars for parts to resell, and sold the remaining scrap metal to a Baltimore-based scrap yard.
The Underwoods requested to be paid in cash for their scrap-metal sales and conspired to conceal from the IRS their subsequent receipt of substantial amounts of cash. The Underwoods filed a false amended individual income tax return for 2010 and false individual income tax returns for 2011 and 2012 with the IRS. The false tax returns did not include the full gross receipts from the sales. The Underwoods also filed a false 2012 partnership tax return for their business that did not report all gross receipts of the business.
The Underwoods each face a maximum sentence of five years in prison for the conspiracy count and three years in prison for each count of filing a false tax return. The Underwoods also face a term of supervised release and monetary penalties, including restitution.
Principal Deputy Assistant Attorney General Zuckerman and U.S. Attorney Hur thanked special agents of IRS-Criminal Investigation, who conducted the investigation, and Assistant U.S. Attorney David I. Salem and Trial Attorney Michael C. Vasiliadis of the Justice Department’s Tax Division, who are prosecuting the case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.