Former Pelham Resident Pleads Guilty to Tax Evasion Scheme
CONCORD, N.H. - Gary Peter Borak, 50, formerly of the Pelham, New Hampshire area, pleaded guilty Tuesday to one count of tax evasion and two counts of making false statements on tax returns, announced Acting United States Attorney John J. Farley.
According to court documents and statements made in court, Borak filed a legitimate federal income tax return for 2007 – prepared by his accountant -- that established that he had an outstanding tax debt of more than $50,000. In response to IRS efforts to collect that debt after Borak failed to pay it, Borak engaged in a series of ploys in an attempt to defeat the payment of the tax and the assessment of new income taxes for future tax years.
Among other things, in 2011, Borak filed an amended return for 2007 and an original, but delinquent, tax return for 2008 in which he made bogus claims that he had large amounts of Original Issue Discount (often abbreviated “OID”) income and large amounts of corresponding withholding from a so-called non-existent “straw man” financial account. He claimed that the withholding not only satisfied his outstanding tax debt from 2007, but also qualified him for large tax refunds. To support his false claims, Borak created fake IRS forms purportedly prepared and issued by a particular bank and sent the IRS volumes of correspondence and other documents containing highly unconventional and meritless claims about the tax laws. Borak persisted in pressing his bogus claims even after the IRS and his accountant told him that they were frivolous. He also attempted to satisfy his tax debt by submitting sham financial instruments to the IRS.
Borak’s conduct resulted in an actual tax loss to the U.S. Treasury of about $168,147. Including his false claims for refunds that were not paid, Borak intended a tax loss of approximately $1.3 million.
Borak’s sentencing is scheduled for December 15, 2017.
This matter was investigated by the Manchester office of Criminal Investigation of the Internal Revenue Service and the Treasury Inspector General for Tax Administration. They were assisted by the Rockingham County and Hillsborough County Sheriff Departments and the Atkinson, Hudson, Salem, and Pelham police departments. The case is being prosecuted by Assistant U.S. Attorneys Seth Aframe and Bill Morse.