Owner of San Francisco Construction Company Sentenced to Jail for Tax Fraud

SAN FRANCISCO, Calif. – Brian Kenny was sentenced yesterday to six months in prison and six months of home confinement and ordered to pay $199,493.83 in restitution for aiding and assisting in the preparation and presentation of a false U.S. Income Tax Return, announced United States Attorney Melinda Haag and IRS Criminal Investigation Special Agent in Jose M. Martinez.

Kenny pleaded guilty on November 5, 2013. According to court records, on or about February 17, 2005, Kenny incorporated his business, SF Bay Construction, Inc. (SFBC). SFBC filed tax returns reporting business gross receipts but paid no corporate income tax. Rather, Kenny reported SFBC’s income on his personal income tax return and paid the tax as SFBC’s sole shareholder. Kenny, however, evaded the full payment of his individual income taxes by underreporting SFBC’s business gross receipts. According to his plea agreement, Kenny failed to report $470,225.77 in business gross receipts during the 2006 tax year. Kenny admitted that he knew the amount of business gross receipts reported on SFBC’s tax return was material to the calculation of income tax owed on his personal income tax return.

Pursuant to the terms of his Plea Agreement, Kenny signed civil closing agreements with the IRS for his income tax liability and SFBC’s employment tax liability. Kenny has paid the full amount of his restitution.

Kenny, of San Francisco, was charged on July 25, 2013, with six counts of assisting in the filing of false tax returns. He pleaded guilty to one count.

Cynthia Stier is the Assistant United States Attorney who is prosecuting the case. The prosecution is the result of an investigation by the Internal Revenue Service, Criminal Investigation.