Three Colorado Springs Residents Sentenced To Federal Prison For Conspiracy To Defraud The Irs And Related Tax Charges Following Jury Trial
DENVER – George Brokaw, age 68, John Pawelski, age 66, and Mimi Vigil, age 63, all from Colorado Springs, Colorado, were sentenced today by U.S. District Court Judge Christine M. Arguello for conspiracy to defraud the IRS and related tax charges, federal law enforcement authorities announced. The three defendants failed to appear at their original sentencing hearing. Judge Arguello then issued a bench warrant for all three defendants, which resulted in Deputy U.S. Marshals locating and arresting the defendants. Today, Brokaw was sentenced to serve 78 months in federal prison, followed by 3 years on supervised release. Pawelski was sentenced to serve 78 months in federal prison, followed by 3 years on supervised release. Both defendants were also ordered to pay a $15,000 fine. Vigil was sentenced to serve 72 months in federal prison, followed by 3 years on supervised release. She was also ordered to serve 200 hours of community service. At the conclusion of the hearing, Judge Arguello ordered all three defendants to remain in federal custody.
All three defendants were indicted by a federal grand jury in Denver on May 22, 2013, which was followed by a superseding indictment on October 21, 2013. They were convicted, following a 5-day jury trial on November 7, 2014. The jury deliberated for an hour and a half before reaching their verdicts. They were sentenced on February 10, 2015.
According to the superseding indictment, and evidence presented at trial, beginning in October 2008, and continuing through May 2009, Brokaw, Pawelski, Vigil, and others conspired with each other to defraud the United States by submitting false claims for income tax refunds to the Internal Revenue Service.
The three filed or caused to be filed false, fictitious and fraudulent Form 1040 tax returns containing false claims for refunds in their names. A total of twelve fraudulent returns were filed attempting to receive over twenty-four million dollars in fraudulent refunds. In connection with these false tax returns they submitted or caused to be submitted false Forms 1099-OID. The 1099-OID forms falsely reported that financial institutions, lenders, or other entities had withheld and paid over to the IRS interest income from accounts which did not generate such interest income and from which no such withholdings were made. The Form 1040 tax returns claimed false refunds based on these false claims of withholdings.
Furthermore, from March 2008 and continuing through April 2012, the defendants willfully conspired with each other to obstruct and impede the due administration of the Internal Revenue laws by attempting to thwart the legitimate collection of taxes owed to the IRS by them and others. They caused to be filed or submitted to the IRS a variety of false, fraudulent, or illegitimate documents which purported to constitute payments of taxes owed to the IRS as well as purported electronic funds transfer (EFT) drawn on closed bank accounts. In addition, the defendants filed a variety of false and fraudulent liens or other documents which falsely claimed that IRS employees, who were engaged in legitimate tax collection efforts against one or more of the defendants, owed one or more of the defendants amounts of money ranging from tens of millions of dollars to billions of dollars.
All three defendants face statutory maximum sentences ranging from not more than 3 years to not more than 10 years, plus up to a $250,000 fine, per count of conviction.
“It is everyone’s responsibility, their obligation, to cooperate with the IRS and their collection of taxes,” said U.S. Attorney John Walsh. “In this case, the defendants not only refused to pay their taxes, they also impeded the IRS and ignored a court order by failing to appear at the originally scheduled sentencing. Today’s prison sentence demonstrates the serious penalties one faces when interfering with the lawful collection of taxes.”
“IRS – Criminal Investigations is working vigorously to stop abusive tax schemes that unfairly shift the tax burden to honest American taxpayers,” said Stephen Boyd, Special Agent in Charge for IRS Criminal Investigation, Denver Field Office. “As our tax season gears up, this sentencing reinforces our commitment to every taxpayer that we will identify and prosecute those who try to defraud the tax system and evade paying their fair share of taxes.”
“The prison sentences handed down today reflect the serious nature of interfering with the lawful collection of taxes,” said Preston C. Lamb, Special Agent in Charge of the Treasury Inspector General for Tax Administration (TIGTA). “Hopefully this prosecution will deter those who think they can avoid or work around our tax system.”
This case was investigated by Internal Revenue Service – Criminal Investigation (IRS CI), and Treasury Inspector General for Tax Administration (TIGTA). The case was prosecuted by Assistant U.S. Attorneys Mathew Kirsch and Martha Paluch.