San Anselmo Contractor Pleads Guilty to Tax Fraud
SAN FRANCISCO, Calif. – John Kieran Hynes pleaded guilty last week to filing a false tax return, United States Attorney Melinda Haag and IRS-CI Special Agent in Charge Jose M. Martinez, announced.
According to court documents, during 2005, Hynes was the owner of Newtown Construction. Hynes admitted that when he received check payments for contracted construction services rendered during the 2005 tax year, he would either deposit the entire check into his business bank account, cash the entire amount of the check, or cash a portion of the check and deposit the remainder of the check into his business account. The amount Hynes received back in cash when he deposited only a portion of the check was called a “less-cash withdrawal.”
Hynes’ bookkeeper relied on the deposited amounts shown on his monthly bank statements to determine his gross business receipts in 2005. Hynes intentionally did not tell his bookkeeper about the less-cash withdrawals to prevent his bookkeeper from including the less-cash withdrawal amounts among the gross receipts that the bookkeeper tracked in the company accounting records.
In order to file his 2005 tax return, Hynes provided his tax return preparer with the company accounting records prepared by his bookkeeper. Hynes knew those accounting records understated the gross receipts earned under the name Newtown Construction because the gross receipts recorded did not include the less-cash withdrawals.
On his 2005 tax return, Hynes knowingly failed to report additional gross receipts of $214,595 earned by Newtown Construction which resulted in a tax loss to the United States of $66,524.
On June 21, 2012, Hynes, 45, of San Anselmo, California, was charged with four counts of filing a false tax return. According to the plea agreement, he pleaded guilty to one count.
The maximum statutory penalty for each count of making and subscribing to a false income tax return, in violation of Title 26, U.S.C § 7206(1) is three 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.
Special Assistant United States Attorney Charles Parker and Assistant United States Attorney Thomas Moore are prosecuting this case. The prosecution is the result of an investigation by the Internal Revenue Service, Criminal Investigation.