Colorado Man Sentenced to Prison and New Hampshire Man Pleads Guilty to Conspiracy to File False Tax Returns, Both in Connection with Defrauding a Dubuque College Bookstore
On Monday, March 30, 2015, a former director of the Clarke University bookstore in Dubuque, Iowa, who used a fictitious book supply company to falsely bill the University for more than $300,000.00, was sentenced to 57 months in prison in federal court in Cedar Rapids. James Spaulding, age 35, from Longmont, Colorado, was convicted of one count of mail fraud and two counts of filing false tax returns.
On Tuesday, March 31, 2015, Spaulding’s friend and co-conspirator from Concord, New Hampshire, Thomas DeFelice, age 38, pled guilty to conspiracy to falsify corporate and personal tax returns in relation to falsely reporting the income from the fraud.
In plea agreements, Spaulding and DeFelice admitted Spaulding was the director of the Clarke University Bookstore between 2011 and 2012. Spaulding and DeFelice created a fictitious corporation called RVP Wholesale Books (“RVP”), then caused RVP to issue false invoices to Clarke University purporting to show that RVP supplied the Clarke University bookstore with books. In truth, RVP never supplied the Clarke University bookstore with any books. Spaulding and DeFelice split the proceeds of the fraud, totaling more than $302,000.00. Spaulding convinced DeFelice that there were, in fact, books purchased through RVP and delivered to Clarke University. DeFelice agreed with Spaulding, however, to falsely inflate the purported cost of goods sold so as to fraudulently decrease RVP’s and their personal tax liabilities. Spaulding and DeFelice therefore filed false tax returns for 2011 and 2012 in which they failed to disclose the illegal proceeds obtained from the fraud. Spaulding later lied to a federal grand jury in Cedar Rapids, Iowa, by falsely claiming RVP supplied the Clarke University bookstore with books.
Spaulding was sentenced in Cedar Rapids by United States District Court Chief Judge Linda R. Reade. Spaulding was sentenced to 57 months’ imprisonment. A special assessment of $200 was imposed, and he was ordered to make $318,900.55 in restitution to Clarke University. He must also serve a three-year term of supervised release after the prison term. There is no parole in the federal system.
Spaulding is being held in the United States Marshal’s custody until he can be transported to a federal prison.
DeFelice entered his guilty plea before United States Chief Magistrate Judge Jon Stuart Scoles. Sentencing before United States District Court Chief Judge Linda R. Reade will be set after a presentence report is prepared. DeFelice remains free on bond pending sentencing. DeFelice faces a possible maximum sentence of three years’ imprisonment, a $250,000 fine, $100 in special assessments, and up to three years of supervised release following any imprisonment.
The cases are being prosecuted by Assistant United States Attorney C.J. Williams and was investigated by the Dubuque Police Department and the Internal Revenue Service Criminal Investigation Division.
Court file information is available at https://ecf.iand.uscourts.gov/cgi-bin/login.pl. The case file numbers are 14-CR-1022-LRR for Spaulding and 15-CR-1005-LRR for DeFelice.
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