Ohio Business Owner Pleads Guilty to Mail and Wire Fraud
Businessman Also Pleads Guilty for Failure to Pay Employment Taxes
WASHINGTON - Robert E. Alick, the operator of used medical equipment sales business and resident of Chagrin Falls, Ohio, pleaded guilty today to five counts of mail fraud, one count of wire fraud, and one count of corruptly endeavoring to obstruct the administration of the Internal Revenue laws, the Department of Justice and Internal Revenue Service (IRS) announced.
According to the indictment and the plea agreement, Alick operated his used medical equipment sales business in Beachwood, Ohio, through the following entities: Healthcare Imaging Solutions Corporation, ECT Medical Systems Inc., ECT Corporation, Second Source Medical Equipment Corporation and Computer Remarketing Credit Corporation d/b/a DECT Imaging. Alick also admitted that he used this series of corporations both as part of his fraudulent scheme (described below) and to avoid paying taxes.
According to the indictment and the plea agreement, Alick admitted that in connection to the mail and wire fraud counts, from July 2002 through April 2006, he engaged in a scheme to defraud the hospitals that were his customers through various means, including by taking substantial deposits that were supposed to be used to purchase medical equipment and failing to use such funds for the purchase of the equipment and failing to deliver the equipment, instead using the money on other things. Alick further admitted that he defrauded the following six hospitals: Toledo Hospital (Toledo, Ohio), Greene County Medical Center (Jefferson, Iowa), Canyon Surgery Center (Phoenix), North Suburban Surgery Center (Thorton, Colo.), Clarion Hospital (Clarion, Penn.) and Hugh Chatham Hospital (Elkin, N.C.).
According to the indictment and the plea agreement, Alick admitted that in connection with the tax crime, in addition to operating his business through a series of corporations, he engaged in an array of other activities to obstruct and impede the IRS. For instance, he admitted that although he caused his corporations to file quarterly employment tax returns from 2000 through part of 2003, he failed to cause them to file such returns from the end of 2003 through 2006. In addition, he admitted that during both periods, he caused these corporations not to pay over the employment taxes that they owed. Alick also admitted that he collected employment taxes from some employees, but not others.
According to the indictment and the plea agreement, Alick further admitted that he took various actions to deceive the IRS and to impede its efforts to collect these and other taxes from 2000 through 2006. He also admitted that he caused his corporations to fail to file corporate income tax returns from 2001 through 2006. Finally, Alick admitted that he made extensive use of cash to avoid making accurate records of his income, used nominee bank accounts to conceal his and his corporations’ income and assets from the IRS, and cashed checks from his business accounts in various ways to hide his financial activity from the IRS.
The sentencing has been scheduled for June 3, 2010. Alick faces a maximum potential sentence of 20 years in prison followed by up to three years of supervised release, and a fine of $250,000, for each of the mail and wire fraud counts. In addition, Alick faces a maximum potential sentence of three years in prison followed by one year of supervised release and a fine of $250,000, for the tax crime.
Acting Assistant Attorney General John A. DiCicco and United States Attorney for the Northen District of Ohio Steven M. Dettelbach thanked Assistant United States Attorneys Michael L. Collyer and Christian Stickan and Tax Division trial attorney Patrick J. Murray, who are prosecuting the case. They also thanked the agents of the FBI and the IRS whose assistance was essential to the successful investigation and prosecution of the case.
Additional information about the Justice Department’s Tax Division and its enforcement efforts may be found at http://www.usdoj.gov/tax.