San Francisco Public Official And Contractors Charged With Crimes Related To Public Corruption And Money Laundering Scheme
SAN JOSE – Daniel Laine Kyle pleaded guilty to tax fraud and structuring currency transactions to avoid reporting requirements announced United States Attorney Brian J. Stretch and Internal Revenue Service (IRS), Criminal Investigation, Special Agent in Charge Michael T. Batdorf. The plea was accepted earlier today by the Honorable Edward J. Davila, United States District Judge.
According to the plea agreement, since November 1997, Kyle, from Carmel, Calif., owned and operated Kyle Racing, a performance motorcycle parts and tuning business in Sand City, Calif. Kyle acknowledged that he did not issue invoices to customers who paid cash. He also admitted that he instructed his employees to not issue invoices to cash-paying customers. Kyle admitted he took these steps to underreport his income to the IRS and used the cash he received from his customers to purchase money orders from various United States Post Offices.
In addition, Kyle admitted that between August 8, 2007, and March 22, 2014, he “structured” his cash purchases of money orders to avoid detection. He admitted that he knew anyone purchasing $3,000.00 or more in postal money orders in one day is required to submit a transaction report. Instead of submitting the report, Kyle admitted he intentionally purchased less than $3,000 per day to avoid triggering reporting requirements.
According to his plea agreement, between August 8, 2007, and March 22, 2014, Kyle purchased, with cash, more than $825,000 worth of money orders. Kyle used the money orders to purchase cars and jewelry from Audi Financial, BMW of Monterey, Tiffany and Company, Christies, Porsche Financial Services, Capital One Bank, Citibank, Monterey Credit Union, and Wells Fargo Bank. Kyle acknowledged that the tax loss for 2007 through 2013 resulting from his scheme was between $500,000 and $1,500,000.
On March 22, 2017, Kyle was charged by felony information with willfully making and subscribing a false individual income tax return for the 2007 calendar year, in violation of 26 U.S.C. § 7206(1), and structuring currency transactions to avoid reporting requirements, in violation of 31 U.S.C. § 5324(a)(3) and 31 U.S.C. § 5324(d)(2). Pursuant to today’s plea agreement, Kyle pleaded guilty to both counts in the information.
The maximum sentence for willfully making and subscribing to a false tax return is three years in prison and a fine of $250,000. The maximum sentence for and structuring currency transactions to avoid reporting requirements is ten years in prison and a fine of $500,000. 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.
Kyle remains free on bond and is scheduled to appear before Judge Davila on August 21, 2017, at 1:30 p.m. for sentencing.
Assistant U.S. Attorney Gary G. Fry is prosecuting the case with the assistance of Laurie Worthen. The prosecution is the result of an investigation by the Internal Revenue Service, Criminal Investigation, and the United States Postal Inspection Service.