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Justice News

Department of Justice
U.S. Attorney’s Office
Western District of Virginia

Wednesday, January 23, 2013

Winchester Man Found Guilty On Tax Charges

James Johnson Faces Possible Prison Term

LYNCHBURG, VIRGINIA -- A Winchester, Va. man charged with a variety of tax charges, was found guilty last week in the United States District Court for the Western District of Virginia in Lynchburg following a four-day jury trial.

James Bowers Johnson was indicted in April 2012 on one count of embarking in a corrupt endeavor to obstruct the due administration of the Internal Revenue Code and three counts of willfully failing to file a tax return.

Following a four-day trial, a Federal jury sitting in U.S. District Court in Lynchburg found Johnson guilty last Friday afternoon, on all four counts. A sentencing date has yet to be set.

“Each and every American has a duty to pay his or her fair share of taxes,” United States Attorney Timothy J. Heaphy said today. “Mr. Johnson attempted to evade his tax obligation and took measures to hide his income. For that conduct, he has been held accountable.”

“There are numerous variations of abusive tax schemes used today in an attempt to conceal income from the IRS. The use of these abusive tax schemes isn't tax planning; it's criminal activity,” said Sheila Olander, Acting Special Agent in Charge, IRS Criminal Investigation Washington DC Field Office. “There is no secret formula that can eliminate a person's tax obligations and Mr. Johnson's guilty verdict reinforces IRS Criminal Investigation's commitment to the American taxpayer that individuals who engage in illegal financial transactions designed to evade the payment of taxes will be held accountable to the fullest extent of the law.”

Based on evidence presented at trial by Assistant United States Attorney C. Patrick Hogeboom III, the jury found that Johnson, who was self-employed, hid his gross income, derived from the sale of prepaid telephone cards, rental receipts and capital gains, from the Internal Revenue Service in a number of ways. He requested that customers place payments in a variety of nominee entities he controlled, used money orders or cash and concealed his owners of assets by placing assets, including his residence, and bank accounts in the names of limited liability companies, foundations, companies, corporations and domestic and foreign trusts. Between 1999 and 2007, Johnson attempted to conceal more than $1.4 million in income.

In addition, the jury found that Johnson, despite earning $160,000 in income in 2005, $385,000 in income in 2006 and $123,000 in income in 2007, willfully failed to file a tax return in any of those years.

The investigation of the case was conducted by Internal Revenue Service. Assistant United States Attorney C. Patrick Hogeboom III and Special Assistant United States Attorney Shannon Wright prosecuted the case for the United States.

Updated April 14, 2015