Northern California Resident Convicted of Tax Evasion
A federal jury sitting in Oakland, California, found a local business owner guilty of three counts of tax evasion after an eight-day trial, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and U.S. Attorney Brian Stretch of the Northern District of California.
Richard T. Grant, 64, of Point Richmond, California, was a 50 percent owner of Grant Engineering and Manufacturing, a business that produces plastic injection molds. The evidence presented at trial showed that for the tax years 2005 to 2009, Grant earned substantial income from the business. Grant paid a certified public accountant to prepare tax returns for the business, but he did not file these returns with the Internal Revenue Service (IRS). Grant also failed to file tax returns for himself during this period.
“Mr. Grant ignored his tax return filing obligations and when faced with IRS efforts to collect tax due, took deliberate steps to conceal income and evade paying his fair share,” said Acting Assistant Attorney General Ciraolo. “The verdict in this case serves as a clear reminder that there is a heavy price to pay for tax crimes and the department is committed to holding those engaged in such criminal conduct accountable.”
“Mr. Grant cheated on his taxes and then tried to hide that fact from the IRS,” said U.S. Attorney Stretch. “As a consequence, he now faces the real possibility of spending years in prison. This office and our colleagues in the Department of Justice will pursue tax cheats wherever and whenever they intentionally short the public fisc.”
The evidence introduced at trial established that in 2005, close in time to the initiation of IRS’s collection efforts for his past due taxes, Grant significantly curbed the use of his two checking accounts and began moving his partnership distributions from Grant Engineering to a warehouse bank in Arkansas. A warehouse bank commingles or pools clients’ funds for the purpose of concealing a particular client’s ownership of the funds. Between April 2005 and October 2006, Grant funded multiple prepaid debit cards and wrote hundreds of checks out of the account toward his mortgage and other personal expenses. When the warehouse bank was shut down as a result of a federal criminal investigation, Grant began converting his partnership distributions to cashier’s checks and cash at a local bank, avoiding depositing the vast majority of the funds into any bank account which he controlled. He also used cash to purchase hundreds of U.S. Postal money orders to pay bills and expenses, including utilities, taxes and expenses for his classic aircraft.
A sentencing hearing is scheduled on Sept. 28. Grant faces a maximum sentence of five years in prison for each count, as well as a term of supervised release and monetary penalties.
Acting Assistant Attorney General Ciraolo and U.S. Attorney Stretch commended special agents of IRS–Criminal Investigation who investigated the case and Trial Attorney Matt Kluge of the Tax Division and Assistant U.S. Attorney Colin Sampson of the Northern District of California, who prosecuted the case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.