Pennsylvania man pleads guilty to using two Maine companies to dodge Uncle Sam

By Nick McCrea, BDN Staff
Posted Sept. 12, 2012, at 5:03 p.m.

A Pennsylvania man pleaded guilty to one count of tax evasion Tuesday in U.S. District Court for the District of Columbia after using cash from two Maine companies in an attempt to dodge paying personal income tax, according to the Department of Justice.

Stephen W. Thomas of York, Pa., was arrested in April after a federal grand jury in Washington returned a three-count indictment, which states that Thomas did not file individual income tax returns from 2005 through 2007.

According to court records, Thomas formed multiple companies in the District of Columbia between 2002 and 2004. The name of each entity contained the acronym ECG, which stands for ESOP Capital Group. ESOP is an acronym for employee stock ownership plan. Thomas claimed the capital group offered financial, business and other management services to companies interested in creating employee stock ownership plans, according to the indictment.

In 2005 and 2006, Thomas contracted to provide these services to two Maine companies. The IRS and Department of Justice have not released the names of the businesses.

During his plea, Thomas admitted that he had concealed his income by moving earnings from the Maine companies into bank accounts using his wife’s name and titling his primary residence in her name.

He withdrew cash weekly — totaling more than $400,000 — using cashier’s checks between 2005 and 2007, according to court documents.

Thomas also admitted that he failed to report at least $573,785 in income during that two-year span. In total, his tax evasion schemes resulted in a tax loss to the IRS of at least $154,362, according to the IRS.

Thomas faces a maximum five-year prison sentence and a fine up to $250,000. U.S. District Judge Amy Berman Jackson, who presided over the case, set a sentencing date of Dec. 3.

http://bangordailynews.com/2012/09/12/news/state/pennsylvania-man-pleads-guilty-to-using-two-maine-companies-to-dodge-uncle-sam/ printed on October 20, 2014