Medical Malpractice News

Three Convicted in Tax Fraud Scheme

WASHINGTON, D.C. - After an 11-week trial and ten day of deliberations, a federal jury in San Diego found Susan E. O’Brien, a professional tax preparer, and two others guilty of tax crimes, the Department of Justice and the Internal Revenue Service (IRS) announced today. O’Brien and co-defendants, R. Richard Evans and William D. Cook, were found guilty of attempting to evade the taxes of a former client, Dr. Kevin Marie Scoggin, (who later pleaded guilty to felony tax charges), for the years 1996 through 2000. The jury also convicted O’Brien and Evans of conspiracy to defraud the United States and aiding and assisting in the filing of fraudulent tax returns. O’Brien was also convicted of evading the payment of tax on her own income.

In July 2003, O’Brien, Evans, Cook and five others were charged in a 78-count indictment with various tax crimes relating to tax years 1996-2002. According to the indictment and trial evidence, O’Brien, the owner and operator of The O’Brien Group, prepared numerous income tax returns that claimed false deductions, including amortization expenses for fabricated intangible assets. Evans promoted, sold, and managed domestic trusts that were used by clients to conceal income and assets from the IRS. Cook and Scoggin used one of Evans’s trusts to conceal Scoggin’s income and assets by maintaining bank accounts in nominee names, holding offshore bank accounts, and assigning income to nominee entities.  Cook and Scoggin also evaded Scoggin's taxes by making false statements to the IRS.

“Tax return preparers who help others evade taxes do more than harm the reputation of law-abiding professionals,” said Eileen J. O’Connor, Assistant Attorney General for the Justice Department’s Tax Division. “By defrauding the federal treasury, they harm all honest taxpayers. The Department of Justice is working vigorously to investigate and prosecute the promotion of tax fraud schemes.”

Defendants Violet Negrete-Jauregui, Jeffrey Barber, Kathy Hill, Stephen Maranto and Forest Buckmaster previously pleaded guilty to felony tax charges and testified during the trial. Two others, Scoggin and Charles Matich, pleaded guilty to tax felonies prior to indictment and also testified for the government.

“The convictions today reinforce the message that those who promote the use of abusive tax schemes to circumvent the tax laws will be held accountable. It is a matter of maintaining public confidence in our system of taxation,” said John Imhoff, Acting IRS Chief, Criminal Investigation. “IRS Criminal Investigation is committed to stopping the use of fraudulent foreign and domestic trust arrangements to evade taxes.”

The Honorable Judge M. James Lorenz set sentencing dates for O’Brien, Evans, and Cook on July 31, 2006 at 8:30 A.M. PDT. Sentencing dates for the seven cooperating defendants are scheduled for May and June.

Assistant Attorney General O’Connor and United States Attorney Carol C. Lam thanked Tax Division trial attorneys Charles O’Reilly and Michael Vasiliadis, the prosecutors in this case, and paralegal specialist Isabelle Balakit Adams. They also thanked IRS special agents Alison Lansdale and John Weeks whose assistance was essential to the successful investigation and prosecution of this case.

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