Jury Convicts Lancaster County Man Of Tax Fraud
PHILADELPHIA - James Kerr Schlosser, 59, of Bird-in-Hand, Pennsylvania was convicted of engaging in corrupt endeavors to obstruct and impede the Internal Revenue Service and to willfully failing to file tax returns, announced Acting United States Attorney Lou Lappen. Schlosser, a manufacturer's representative for companies that sold medical equipment and surgical devices to various health care providers, stopped filing federal income tax returns in 1995.
To conceal the income that he had earned, Schlosser attempted to assign his income to multiple foreign business trusts and corporate entities which he created and registered with the Nevada Secretary of State. In order to obtain possession of the income, Schlosser entered into contracts with Nevada-based mailing forwarding services who caused the income, that had been sent to the foreign trusts and corporate entities, to be forwarded to Schlosser in Pennsylvania or other individuals who Schlosser had convinced to serve as trustees for one or more of the foreign business trusts.
Evidence offered during the trial established that Schlosser failed to file tax returns for approximately 20 years even though he realized gross receipts of approximately $2.3 million from 1994 through 2014. Testifying in his own defense, Schlosser told the jury that he refused to file tax returns because he concluded that the use of a social security number represented the "mark of the beast" alluding to a passage in the Bible.
"The legality of our income tax laws has been challenged time and time again and the courts have consistently upheld these laws. Convictions, like the one returned against James K. Schlosser, send a loud and clear message that regardless of their opinions, people who willfully defy the tax laws will be fully investigated, prosecuted, and subjected to the full punishment of the law for their actions," said Internal Revenue Service Criminal Investigation Acting SAC Gregory Floyd.
Schlosser is scheduled for sentencing before United States District Judge Jeffrey L. Schmehl on June 10, 2017. He faces a maximum of 5 years imprisonment, a fine of $450,000 and the cost of prosecution.
The case was investigated by Internal Revenue Service Criminal Investigations and prosecuted by Assistant United States Attorney Floyd J. Miller and DOJ Trial Attorney Derek Ettinger.