Understated Gross Receipts by Approximately $1.8 Million

A Spokane, Washington certified public accountant was sentenced yesterday to 15 months in prison for making and subscribing false corporate income tax returns, announced Principal Deputy Assistant Attorney General Caroline D. Ciraolo, head of the Justice Department’s Tax Division, and U.S. Attorney Michael C. Ormsby for the Eastern District of Washington.

According to documents filed with the court, Roger Stadtmueller owned and operated Stadtmueller & Associates P.S., an accounting firm that offered accounting and consulting services, including income tax preparation, bookkeeping and financial auditing.  Stadtmueller also owned Zazz, Inc., the corporate entity under which Stadtmueller & Associates P.S. conducted business.  Stadtmueller willfully made and subscribed false and fraudulent corporate income tax returns for Zazz, Inc. for 2006, 2007 and 2008, which understated gross receipts by approximately $1.8 million.

“As a tax professional, Roger Stadtmueller was clearly aware of his legal obligation to honestly and accurately report corporate income, and willfully disregarded this obligation when he filed false corporate income tax returns,” said Principal Deputy Assistant Attorney General Ciraolo. “With yesterday’s sentence, Mr. Stadtmueller pays a substantial price for his criminal conduct.  The department, together with its colleagues in the Internal Revenue Service (IRS) and other law enforcement partners, will continue to pursue and prosecute those who violate our nation’s tax laws.”

Stadtmueller pleaded guilty on July 26.  In addition to the prison term, Stadtmueller was ordered to serve one year of supervised release and to pay restitution to the IRS in the amount of $400,000.

“It really is inconceivable that a CPA would cheat on his own corporate returns, but that is exactly what Roger Stadtmueller did,” said Special Agent in Charge Darrell Waldon of IRS-Criminal Investigation (CI).  “Now the accountant is being held accountable. Accountants are known for their trustworthiness and integrity and IRS-CI exists to ensure that those qualities permeate our tax system.  When someone violates those principles, and in so doing breaks the law, they will be brought to justice.”

Principal Deputy Assistant Attorney General Ciraolo and U.S. Attorney Ormsby commended special agents of IRS-CI, who conducted the investigation and Senior Litigation Counsel Corey J. Smith and Trial Attorneys Lisa L. Bellamy and Eric C. Schmale of the Tax Division, who prosecuted the case.

Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.