Source: https://klasing-associates.com/nifty-fiftys-accountant-sentenced-for-role-in-tax-fraud-scheme/
Timestamp: 2018-04-23 17:16:10
Document Index: 246274298

Matched Legal Cases: ['in fine', '§ 371', '§ 7206', '§ 1014', '§ 5324', '§ 5324']

Nifty Fifty’s Accountant Sentenced for Tax Fraud Scheme
Home > The Tax Law Blog > Criminal Tax Representation > Nifty Fifty’s Accountant Sentenced for Role in Tax Fraud Scheme
In a criminal tax matter apparently stretching all the way back to 1986, the accountant for Nifty Fifty restaurants pleaded guilty to criminal tax and other charges in January 2015. The charges concerned an array of improper and illegal actions concerning the company’s income, the company’s taxes, and the accountant’s personal income taxes. This week, the accountant was sentenced on the tax fraud and other charges he faced.
For nearly 30 years, accountant William J. Frio provided accounting and tax preparation services for the restaurant chain. However, during that time the accountant was engaged in multiple schemes to avoid paying taxes. He pleaded guilty to a decades-long scheme where he and other principals of the restaurant would significantly undervalue or otherwise fail to account for gross receipts. In all, this tax evasion scheme resulted in the evasion of more than $2.28 million in taxes. Furthermore, Frio also faced criminal charges for submitting false personal income tax returns and embezzling more than $4 million dollars from the company while structuring the transactions in an attempt to evade detection. Frio pleaded guilty to all charges and faced a potential 57 years in federal prison, millions in restitution, up to $2.75 million in fines, and criminal forfeiture.
How are the Tax Charges the Accountant Pleaded Guilty to Defined?
William J. Frio faced a number of extremely serious charges and tax charges. The crimes he was charged with and pleaded guilty to are:
18 U.S.C. § 371 Conspiracy to defraud the United States – Under the statute, any two or more individuals who conspire to commit and offense against the United States or to defraud the United States are guilty of a criminal offense. The defraud clause creates a separate offense. In general, activities that swindle the government out of money – such as tax revenue, interfere or obstruct with legitimate government activity, or make improper use of government instrumentalities can face charges under this provision.
26 U.S.C. § 7206(1) Fraud and false statements under penalties of perjury – Tax returns are filed under the penalty of perjury. Frio falsely filed income tax returns for himself, other individuals, & the restaurant which grossly understated income. Individuals who willfully file false, incomplete, or fraudulent tax returns open themselves up to serious criminal penalties. Individuals convicted under this statute can face up to three years in federal prison, a fine of up to $100,000.
18 U.S.C. § 1014 Loan & credit application fraud – While not strictly a tax offense, Frio used false tax documents to defraud the bank when seeking a loan to purchase a home. Any person who knowingly makes a false statement — including the willful overvaluing of land, real estate, or other property – to certain federally affiliated banks and other government agencies can face up to 30 years in prison and significant monetary fines.
31 U.S.C. § 5324(a)(3) Structuring transactions to evade reporting requirement – It is illegal to intentionally avoid cash and other reporting laws. Likewise, it is a crime to fail to satisfy one’s reporting obligations. Frio pleaded guilty to aggravated structuring charges totaling more than $2.6 million. Aggravated structuring charges can be punished by a prison sentence of up to 10 years and doubled fines.
Furthermore, per 31 U.S.C. § 5324, Frio was also subject to forfeiture of his ill-gotten gains which included the $2.6 million in cash implicated in the structuring charges.
What Was Frio Sentenced to After Pleading Guilty to Tax Crimes?
In light of the potential 57 years in prison originally faced by Frio, the sentence that was imposed was harsh, but relatively slight in comparison to the maximum. The 58 year old Frio was sentenced to five years in prison and four years of supervision following his release from federal prison. Additionally Frio faces a restitution payment of $1.7 million and a special assessment of $700.
If you are facing criminal tax charges due to violation of federal or state tax obligations, the experienced tax professionals of the Tax Law Offices of David W. Klasing can help. The lawyers of the firm are dedicated to offering strategic options to combat criminal tax charges. As this tax matter makes clear, prosecutors from the Department of Justice are aggressive and will prosecute to the fullest extent of the law. When the stakes are too high to go it alone, the experienced tax professionals of the Tax Law Offices of David W. Klasing can help. To schedule a reduced-rate consultation, call 800-681-1295 or contact us online.
Nifty Fifty’s Accountant Sentenced for Role in Tax Fraud Scheme was last modified: March 10th, 2016 by David Klasing
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