Greenwood Village Psychiatrist Pleads Guilty to Illegal Distribution of Controlled Substances and Financial Crimes
DENVER – Don R. Iley of Parker, Colorado, pled guilty today before U.S. District Court Judge Christine M. Arguello to wire fraud and aiding and assisting in the preparation of false tax returns, the United States Attorney’s Office and IRS-Criminal Investigation announced. Iley was indicted by a federal grand jury in Denver on August 24, 2016, and is scheduled to be sentenced by Judge Arguello on July 13, 2017 at 3:00 p.m.
According to the indictment and plea agreement, from January 2009 through December 2015, Iley was the owner and operator of Iley and Associates (I&A), an accounting and tax preparation firm which provided services to more than 140 businesses in Colorado. For some of I&A clients, payroll accounting and payroll tax services were provided. The payroll tax services included the preparation of Forms 941, Employer’s Quarterly Federal Tax Returns, and then withdrawing and paying the required payroll taxes to the IRS on behalf of the clients.
Iley caused his staff to collect the necessary information from payroll clients to prepare Quarterly Federal Tax Returns. Iley also caused his staff to prepare an “ACH Deduction Report”, which identified the payroll client’s “Total Federal Payroll Tax liability” for each pay period. The ACH Deduction report also identified other amounts to be withdrawn from each payroll client’s bank account, such as the federal and state unemployment tax. The funds withdrawn from the client’s bank accounts were transferred to a bank account controlled solely by Iley.
Iley would then cause his employees to send the clients a cover letter falsely representing the Form 941 included in the letter was filed with the IRS and that Iley had paid or would pay the taxes. Instead, Iley retained the payroll tax monies from his payroll clients for whom he was responsible for paying such taxes. To facilitate his scheme, Iley prepared and signed on behalf of Iley & Associates false Form 941 tax returns claiming the payroll tax client had no payroll taxes due and owing. Iley then mailed the false tax returns to the IRS.
Iley kept the money he received that was intended for payroll taxes and used it for his own purposes. Iley used some of the money to, among other things, make $900,000 in accelerated principal payments for Iley’s home, pay for the design, construction, landscaping and furnishing of Iley’s residence, and make investments in businesses and retirement accounts. By Iley’s own estimate, he stole at least $11 million dollars during this time frame.
Wire fraud carries a penalty of not more than 20 years in federal prison, and a fine of up to $250,000 or twice the amount of gain or loss, whichever is greater. Aiding and assisting in the preparation of false tax returns carries a penalty of not more than 3 years in federal prison, and a fine of up to $250,000 or twice the amount of the gain or loss, whichever is greater.
This case is being investigated by the Internal Revenue Service – Criminal Investigation. The case is being prosecuted by Assistant United States Attorney J. Chris Larson.