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Justice News

Department of Justice
U.S. Attorney’s Office
Northern District of California

FOR IMMEDIATE RELEASE
Thursday, November 1, 2018

Marijuana Distributor Sentenced To Two Years In Prison For Tax Fraud

Defendant Failed To Report More than $1.1 Million From Marijuana Distribution On Tax Returns

SAN FRANCISCO –  Charles T. Woods was sentenced today to 24 months in prison, and ordered to pay a fine of $10,000 and restitution of $466,707 for willfully filing a false individual income tax return with the Internal Revenue Service, announced United States Attorney Alex G. Tse, Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division, and Internal Revenue Service (IRS), Criminal Investigation, Acting Special Agent in Charge Tara Sullivan.  The sentence was handed down by the Honorable Susan Illston, U.S. District Judge.

Woods, 44, of Santa Rosa, Calif., pleaded guilty to the charge on May 25, 2018.  In pleading guilty, Woods admitted he engaged in marijuana distribution in 2012, 2013, and 2014, and that he knowingly and willfully filed federal tax returns for those years that underreported income from his marijuana distribution.  For all three years, Woods consistently reported business gross receipts on his tax returns of under $85,000 per year despite earning hundreds of thousands of dollars more.  To evade bank currency transaction reporting requirements and to conceal his income, Woods deposited more than $1 million into numerous bank accounts under his control in amounts less than $10,000.  In total, Woods failed to report more than $1.1 million in gross receipts from his marijuana distribution business, which resulted in a tax loss of $466,707 to the United States.

Woods was charged by information on April 25, 2018, with two counts of willfully making and subscribing a false tax return to the Internal Revenue Service, in violation of 26 U.S.C § 7206(1).  He pleaded guilty to one count.

In addition to the prison term, Judge Illston also ordered the defendant to serve a year of supervised release following his prison term.  Judge Illston ordered the defendant to surrender on or before January 11, 2019, to begin serving his sentence.  

Assistant U.S. Attorney José A. Olivera and U.S. Department of Justice, Tax Division, trial attorney Christopher Magnani are prosecuting this case with the assistance of Kathy Tat and Larry Garland.  The prosecution is the result of an investigation by IRS Criminal Investigation.
 

Topic(s): 
Tax
Updated November 1, 2018