Hillsborough Business Owner Charged With Tax Fraud

SAN FRANCISO – A federal grand jury indicted Brian Peter Stallings for tax fraud, announced United States Attorney Melinda Haag and Internal Revenue Service, Criminal Investigation, Acting Special Agent in Charge Thomas McMahon.

According to the indictment, from 2008 through 2011, Stallings, of Hillsborough, Calif., was the president and sole shareholder of Stallings Painting, Inc. (SPI), a company engaged in residential and commercial painting.  During these years, SPI maintained at least two business bank accounts, one with Comerica Bank and another with First Bank.  Stallings was the sole signatory on both bank accounts. From 2008 through 2010, SPI deposited gross receipts into both accounts.  Stallings, however, only provided his accountants with bank statements from SPI’s Comerica Bank account and did not report the income deposited into the First Bank account.  Stallings is charged with making and subscribing false tax returns for the 2008, 2009, and 2010 tax periods.  Additionally, from the second quarter of 2009 through 2011, Stallings paid wages to his employees from the account with First Bank, but did not collect, account for, and pay over to the IRS federal income and Federal Insurance Contributions Act taxes required to be withheld from those wages.

The grand jury charged Stallings with one count of filing false tax returns, in violation of 26 U.S.C. § 7206(1), and 13 counts of willful failure to account for and pay over taxes, in violation of 26 U.S.C. § 7202.

Stallings made his initial appearance in federal court in San Francisco on July 31, 2015, at 9:30 a.m., before the Honorable Nandor J. Vadas, U.S. Magistrate Court Judge.

An indictment merely alleges that crimes have been committed, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt. If convicted, the defendant faces a maximum sentence of three years in prison and a fine of $250,000 for filing false tax returns, in violation of 26 U.S.C. § 7206(1).  The maximum sentence for each count of willful failure to account for and pay over taxes, in violation of 26 U.S.C. § 7202, is five years in prison and a fine of $250,000.  However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.

Assistant U.S. Attorney Jose A. Olivera is prosecuting the case.  The prosecution is the result of an investigation by the Internal Revenue Service, Criminal Investigation.