Criminal Justice News

Monday, June 15, 2015

Kentucky Man Convicted of Evading Income Taxes and Providing False Document to Internal Revenue Service Collections

A Russell Springs, Kentucky, man has been found guilty by a jury sitting in the U.S. District Court in Bowling Green, Kentucky, of multiple tax crimes, including failure to report hundreds of thousands of dollars on his income taxes, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and U.S. Attorney Kerry B. Harvey of the Eastern District of Kentucky.

On June 12, the jury found James S. Faller II, 54, guilty of one count of corruptly endeavoring to obstruct the Internal Revenue Code, four counts of evading federal individual income taxes, one count of falsifying a document submitted to the Internal Revenue Service (IRS) under the penalty of perjury and four counts of failing to file timely his 2006 through 2009 federal individual income tax returns.  The jury returned the verdict after two hours of deliberation following a nine-day trial.

According to evidence introduced at trial, from at least April of 2006 through March of 2010, Faller provided consultation services involving criminal defense investigations and related services, for which he earned gross income of approximately $126,000 to $289,000 per year.  During that time, Faller concealed his income from the federal government by arranging for his income to be made payable to another individual as a nominee and deposited the income into bank accounts that were not in his name.  In March 2010, during an IRS civil collections action, Faller provided a false document to an IRS revenue officer wherein he lied about his true gross monthly income.  Faller also did not file any individual federal income tax returns for those years on a timely basis.  In March 2011, he filed false tax returns for 2006 and 2007.

Faller is scheduled to be sentenced on Sept. 17 in Bowling Green by Chief U.S. District Judge Joseph McKinley of the Western District of Kentucky.  Faller faces a statutory maximum sentence of five years in prison and a $250,000 fine on the evasion charges, a statutory maximum sentence of three years in prison and a $250,000 fine on the corrupt endeavor to impede charge, a statutory maximum sentence of three years in prison and a $250,000 fine on the false document charge, and a statutory maximum sentence of one year in prison and a $100,000 fine for each count of failure to file income tax returns.

Acting Assistant Attorney General Ciraolo and U.S. Attorney Harvey commended the special agents of the IRS-Criminal Investigation, who investigated the case, and Trial Attorney Thomas Voracek of the Tax Division and Assistant U.S. Attorney Lee Gentry of the Eastern District of Kentucky, who prosecuted the case.

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