Recent Tax Prosecutions Serve As A Reminder To Accurately File And Pay Taxes As The April 15 Deadline Approaches
For Immediate Release
U.S. Attorney's Office, District of Minnesota
The U.S. Attorney’s Office reminds all Minnesotans that the deadline for filing federal income tax returns is Monday, April 15. Although the filing season is nearing the end, the U.S. Attorney’s Office and the Internal Revenue Service’s Criminal Investigation Division work year round to protect the integrity of our nation’s tax system by investigating and prosecuting individuals who violate the tax laws.
“We owe it to every American taxpayer to use all lawful means to identify and prosecute those who seek to violate our nation’s tax laws. It is a matter of maintaining public confidence in our system of taxation,” stated U.S. Attorney Erica MacDonald.
“Taxpayers thinking about participating in fraudulent tax schemes, such as failing to report all forms of income or falsifying deductions should take a good look at the serious and detrimental consequences of taking the next step,” stated Special Agent in Charge Gabe Grchan of the IRS Criminal Investigation Division. “Those who might consider preparing false and fraudulent tax returns should be aware of the extremely negative consequences that could result in prison time, large tax bills, including substantial fines, interest and penalties.”
As the tax filing season winds down next week, the following court actions serve as a reminder to taxpayers, to think before filing a false or fraudulent tax return and to be wary of any schemes that falsify your income or deductions.
MICHAEL DEAN CARNICLE, of Henderson, Nevada, was sentenced to nine months in federal prison and ordered to pay $303,881 in restitution for willfully failing to file his tax returns. CARNICLE received gross income in the amount of $1,276,858 for tax year 2007 and $575,840 for tax year 2008, but willfully failed to file tax returns resulting in a total tax loss of $303,881.
SHARI ANN NATYSIN, of Elk River, Minnesota, pleaded guilty to multiple counts of wire fraud and tax evasion related to payments she received while employed as a bookkeeper of a family-owned concrete flooring company in Anoka, Minnesota. Utilizing her position, NATYSIN manipulated the company’s payroll processing service to overpay herself more than $630,000 while concealing the fraudulent transactions from the owners of the business. NATYSIN also attempted to file tax returns that grossly understated her income to evade the income tax she owed to the United States.
MELISSA VANG PASKEWICH, owner and operator of WIN SOLUTIONS, a temporary staffing agency, pleaded guilty to one count of willful failure to pay payroll taxes and one count of filing a false tax return. During the tax years 2014 through 2017, PASKEWICH caused the business to withhold payroll taxes from only some employees’ wages and pay the amounts to the IRS as required. For most workers, whom she called “cash” employees, PASKEWICH did not pay the payroll taxes as required and did not report the employees’ wages on IRS Forms 941 and Forms 1120S. PASKEWICH admitted keeping $740,564.22 in payroll taxes and filing a false 2016 income tax return in which she only reported $80,949 in business income when, in fact, WIN SOLUTIONS’s net income was $609,538. The total criminal tax loss is approximately $1,132,110.75.
SCOTT PHILLIP FLYNN, of Orono, Minnesota, was sentenced to 87 months in prison and was ordered to pay more than $5 million in restitution for evading the assessment of millions of dollars in income taxes by fraudulently hiding millions of shares of stock that he obtained for himself. In one year alone, FLYNN received approximately $2.7 million in proceeds which he used to purchase a house in Orono, Minnesota while only reporting income of $26,136 to the IRS.
JEROME C. RUZICKA, W. JEFFERY TAYLOR, SCOTT A. NELSON, and JEFFREY LEE LONGTAIN, were recently sentenced for their roles in a massive fraud scheme perpetrated against Eden Prairie-based Starkey Laboratories, Inc. (Starkey) and its principal owner William F. Austin. Following a nearly eight-week trial, both RUZICKA and TAYLOR were convicted of mail and wire fraud and RUZICKA was convicted of tax fraud. NELSON pleaded guilty to conspiracy to commit mail fraud and wire fraud and LONGTAIN pleaded guilty to making and subscribing a false tax return.
JULIE ANN LEE, former controller of the Town & Country Club (“TCC”) in St. Paul, Minnesota, was sentenced to 42 months in prison for operating a million dollar embezzlement scheme. LEE stole more than $1 million in cash, checks, and credit card payments and, in order to conceal the shortage of funds, LEE filed false quarterly payroll tax returns with the IRS understating TCC’s payroll tax liability. At times, LEE also filed TCC’s quarterly payroll tax returns late and made TCC’s quarterly tax payments late, which resulted in TCC paying more than $300,000 in interest and penalties to the IRS.
ELLIS ALANCE BANKS, of Brooklyn Center, Minnesota, was sentenced to 92 months in prison on charges of conspiracy to defraud the United States and aggravated identity theft. BANKS filed more than 250 false tax returns seeking $1.2 million in fraudulent tax refunds. Additionally, he obtained social security numbers, dates of birth, and other personal identifying information of individuals to use to file fraudulent income tax returns.
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United States Attorney’s Office, District of Minnesota: (612) 664-5600
Updated April 3, 2019