Colorado Horse Breeder Sentenced To Prison For Income Tax Evasion
DENVER – Nikitis A. Mangeris, age 70, of Berthoud, Colorado, was sentenced yesterday by U.S. District Court Judge R. Brooke Jackson to serve 4 months in federal prison for tax evasion the U.S. Attorney’s Office and Internal Revenue Service - Criminal Investigation (IRS CI) announced. Mangeris was also ordered to serve 24 months home detention following his prison sentence as part of a 3 year term of supervised release. Mangeris was also ordered by Judge Jackson to pay a $1,200 fine and $891,955.28 in restitution to the IRS. He will report to a Bureau of Prison facility within 15 days from the date of his designation.
Mangeris was indicted by a federal grand jury in Denver on January 9, 2013 and pled guilty to tax evasion on October 1, 2013. According to the indictment and plea agreement, Mangeris owned and operated several vitamin businesses since the mid-1990s. In 1992 he owned twenty-five percent of a vitamin business called Kaire International. The company generated on average between $5 million and $6 million in monthly gross proceeds and Mangeris receive income from Kaire International until approximately 1997 to 1999 when he left the company. He also owned and operated a horse business during this time period.
Beginning as early as 1994, Mangeris began investing in Arabian horses with the intent of breeding them for a profit. The values of the horses were linked to their lineage; therefore, each horse had to be verified and registered with the Arabian Horse Association. Mangeris registered the horses under business names Les Beaux Chevaux and Tenet Investment Group in order to avoid having to disclose his interest in them in public records. He further disguised his ownership interest in Tenet Investment Group by using a nominee name. There were two horses that generated significant proceeds for Mangeris. These horses were named MHR Nobility and Bentlee and Mangeris utilized the Colorado State University Equine Reproductive Laboratory to assist him in extracting and storing semen from MHR Nobility and Bentlee for future sales. Based upon its lineage, Mangeris was able to sell MHR Nobility's semen for, on average, $2,500 to $3,000 per breeding.
In 2002 Mangeris was audited by the IRS for calendar years 1997-1999. In February 2004 he agreed to with the IRS assessment and collection of back taxes, penalties, and interest for calendar years 1997-1999 in the amount of $891,955.28. Within 5 months of agreeing to the IRS assessment, Mangeris opened back accounts in nominee names and started depositing money into these accounts to conceal money. In December 2004 and January 2007 Mangeris falsified IRS Forms 433-A, Collection Information Statement for Wage Earners and Self-Employed Individuals, which is a form that lists income and assets for an individual.
Particularly, in January 2007 Mangeris falsified Form 433-A and made false verbal representations during a meeting with a revenue officer. He stated on the form that he was self-employed, had no real assets, had no income, lived with friends and relatives, and maintained no bank accounts. This information was false when in fact, Mangeris owned and operated a horse business, earned over $80,000 from this business in calendar year 2006, and controlled a bank account into which he made over $375,000 in deposits in 2006. Furthermore, he and his wife were renting a residence for $3,450 per month at the time of his meeting with the revenue officer. To this day Mangeris has made no voluntary payments towards his tax debt and has also taken overt acts to evade the payment of his tax debt.
This case was investigated by agents with IRS-Criminal Investigation. The case is being prosecuted by Assistant U.S. Attorney Kenneth Harmon and Department of Justice Tax Division Trial Attorney Kevin Sweeney.