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SAN JOSE – Stephen Joseph Heuer pleaded guilty in federal court in San Jose today to tax evasion, United States Attorney Melinda Haag announced.
According to the plea agreement, Heuer, 52, of Greer, South Carolina, owned and operated Cocoon Nutrition, a company located in Cupertino and Campbell, Calif. Heuer admitted that between January 2002 and April 2005, he attempted to avoid paying taxes on income he received through the operation of Cocoon Nutrition. Heuer admitted that, as a part of his scheme, he established a corporation in the state of Washington in the name of Alchemy Ministries to conceal income he derived from Cocoon Nutrition. He claimed Cocoon Nutrition was being run by Alchemy Ministries, and that Alchemy Ministries was a tax-exempt religious organization. Under the appearance of being a religious organization, Heuer’s claim had the effect of making Cocoon Nutrition exempt from federal, state, and local tax laws.
Heuer admitted that he willfully failed to report $381,182 of taxable income, which resulted in $136,552 of additional tax due, and pleaded guilty to one count of tax evasion.
Heuer’s sentencing hearing is scheduled for December 9, 2013, at 1:30 p.m. before The Honorable Edward J. Judge Davila, U.S. District Judge, in San Jose. The maximum statutory penalty for one count of attempting to evade taxes, in violation of 26 U.S.C. § 7201, is five years and a fine of $250,000, plus restitution. However, any sentence will be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Jeff Nedrow is the Assistant U.S. Attorney who is prosecuting the case with the assistance of Susan Kreider. The prosecution is the result of a two-year investigation by the Internal Revenue Service, Criminal Investigation, and the Food and Drug Administration, Office of Criminal Investigations.