Press Release
Contact:
NILS R. KESSLER
ASSISTANT U.S. ATTORNEY
PHONE: (616) 456-2404
FEDERAL TAX EVADER CONVICTED
July 21, 2008 -
Grand Rapids, Michigan – June Marie Young, 52, of Dimondale, has been convicted by
a federal jury of four counts of willful tax evasion, United States Attorney Charles R. Gross
announced today. U.S. Attorney Gross was joined in the announcement by Maurice Aouate,
Special Agent in Charge of the Detroit Field Office of the IRS Criminal Investigation Division.
According to the evidence presented at a four-day trial in Grand Rapids, Young was a self-employed commercial artist who created mass-produced paintings, sold through a contract distributor. As her business became more and more successful, Young established a sham trust known as the Black Gold Foundation. From 2000 to 2003, Young arranged for all of the monies she earned from her commercial art to be deposited into this trust in order to avoid the appearance of having income in her own name. But she controlled the trust, and more importantly the trust’s checkbook.
Although Young filed personal income tax returns for 2000, 2001, 2002 and 2003, her returns did not report any of the funds paid on her behalf to the Black Gold Foundation. Instead, she also filed income tax returns on behalf of the Foundation listing exorbitant business expense deductions that exceeded trust income. She thus claimed that no tax was due and owing from the Foundation, despite the fact that she knew a substantial portion of the deductions she claimed on its behalf were illegitimate. As a result of her actions, for the period 2000 to 2003, Young paid only $28,000 in taxes on business receipts exceeding $1.2 million.
Among the items paid for with Foundation checks signed by Young – and deducted as business expenses – were house payments on two of Young’s homes in Michigan, the down payment for a $406,000 luxury home in Florida, lease payments on a $49,000 Jaguar sedan, and gifts to family members disguised as payments for “services rendered.” In addition, she transferred over $100,000 to herself from the trust each year, disguised as payment for“consulting” and “loans” that were never repaid. Young used this money for luxury purchases, including a home theater system and indoor spa.
After hearing four days of testimony, the jury took less than three hours to reach its verdict. “The jury’s verdict confirms what should be crystal clear,” said Aouate. “Everybody has a duty to pay their taxes. People who look for creative ways to evade their obligations will be investigated and prosecuted.”
Tax evasion carries a maximum penalty of 5 years imprisonment and a $250,000 fine per count. Sentencing has been scheduled for October 31, 2008. In the interim, Young remains free on bond.
U.S. Attorney Gross praised the work of IRS CID in bringing this case to a successful resolution. The case was prosecuted by Assistant U.S. Attorney Nils R. Kessler.
END
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