Recently in Mail Fraud Category

Tennessee Businessman Sentenced to 31 Years in Prison for Fraud

August 30, 2013, by The McKellar Law Firm, PLLC

Former Nashville, Tennessee area business owner, Richard Olive, 49, of Vero Beach, Florida, was convicted on charges of mail fraud, wire fraud, and money laundering by federal jury on March 7, 2013. Olive was ordered to serve 31 years in prison and to pay $5,992,181.24 in restitution to approximately 190 victims for crimes related to his operation of National Foundation of America (NFOA), headquartered in Franklin, Tennessee.

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According to a press release from the U.S. Attorney's Office, from January 2006 through May 2007, Olive represented that NFOA was a charitable organization. He stated multiple times to potential investors that NFOA was recognized by the IRS as a 501(c)(3) organization, even though he only donated approximately $108,000 to charity. That amount is less that ½ of 1% of the $23.6 million NFOA received. Olive continued to state this though he was counseled to cease at least twice by his attorney. Olive obtained assets of over $30 million during the time of operation, promising that in exchange for an "installment bargain contract," NFOA would provide a "guaranteed payout over a guaranteed period of time," as well as a "generous tax deduction." Evidence revealed at the trial showed that NFOA lacked the assets to meet these promises.

Later discoveries in the investigation showed that Olive solicited assets that included annuities, which have high penalties upon their surrender. Once Olive possessed the annuities, he promptly surrendered them to access the cash, incurring more penalties. With this cash, he began living a lavish lifestyle. Olive paid $153,000 on his personal credit card, funded a private jet for a family vacation to New Orleans, settled a lawsuit filed against him for $250,000, and purchased several properties, including a $690,000 condominium in Las Vegas.

Evidence at trial demonstrated that Olive deliberately misrepresented information pertaining to NFOA. In February 2006, merely days after NFOA gained its incorporation, Olive consulted a financial advisor and provided the advisor with fabricated financial statements that stated NFOA held substantial assets and had been operation in both 2003 and 2004. Three months later, he consulted with another financial advisor stating that the company had $35 million worth in assets. However, since its creation till June 2006, the charitable tax returns filed with the State of Tennessee, NFOA had only received $2.8 million in revenue. Olive was also served with a cease-and-desist order from five different states when they detected a misrepresentation of the company as an IRS recognized 501(c)(3) charitable organization. In May 2007, NFOA was seized and liquidated by the Tennessee Department of Commerce and Insurance.

Due to Olive's leadership in this sophisticated scheme, the large amount of money taken from numerous defenseless victims, and the misrepresentation of NFOA being a charitable organization, the District Court concluded additional sentencing enhancements were to be applied.

Oklahoma Woman Sentenced to 46 Months for Tax Evasion and Mail Fraud

March 1, 2011, by The McKellar Law Firm, PLLC

After pleading guilty in federal court of tax evasion and mail fraud, an Oklahoma woman received a 46-month sentence and was ordered to pay over a million dollars to her former employer and over $325,000 to the Internal Revenue Service. The Oklahoman, via its NewsOK.com website, reports that Debra Minshall, age 49, defrauded her former employer, a Chevrolet car dealership, for over 6 years. Minshall was accused of using company checks to pay her own credit card bills.

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People who are accused of committing economic crimes, such as mail fraud, will almost inevitably have tax crime allegations as well. One of the obvious reasons for this occurrence is the fact that people who are stealing or defrauding someone of money are usually not going to report their ill-gotten gains in a tax return. In other words, if someone files a tax return which reports $75,000 in income, but the person also embezzled $85,000, then the person's true income would not be $75,000. Therefore, a prosecutor could argue that the person has committed tax fraud by filing a false tax return.

26 U.S.C. § 7201 governs federal tax crimes, and the Tennessee version of the crime of tax evasion can be found at Tennessee Code Annotated § 67-1-1440(g). The required elements for a violation of 26 U.S.C. § 7201 are: (1) existence of a tax deficiency; (2) an affirmative act constituting an evasion or an attempted evasion of the tax; and (3) willfulness. United States v. Nolen, 472 F.3d 362, 377 (5th Cir. 2006).