A Texas man has been caught in a web of deceit, pleading guilty to filing false tax returns with the IRS. Jason Smith, of Kerrville, has admitted to defrauding the government out of over $1.5 million in taxes.
The scheme, according to court documents, involved Smith’s work as an independent distributor for a multi-level marketing business that sold essential oils and aromatherapy products. Smith created a shell entity, Live Young Now International Ministries, and had the business pay his compensation to that account.
Smith maintained control over the entity’s bank accounts and used the funds to pay for personal expenses, including his mortgage, automobiles, a motorcycle, a tractor, and an airplane. Despite receiving tax forms from the business reporting his compensation as over $1.4 million each year for 2018 and 2019, Smith lied to his return preparer, claiming he had no such forms.
This led to the preparation of false tax returns that omitted over $2.9 million in income, instead reporting that Smith earned only $43 from the business. In total, Smith caused a tax loss to the IRS of over $1.5 million.
Smith is scheduled to be sentenced at a later date and faces a maximum penalty of three years in prison for each count of filing a false tax return, as well as a period of supervised release, restitution, and monetary penalties.
Deputy Assistant Attorney General Karen E. Kelly of the Justice Department’s Tax Division made the announcement, while IRS Criminal Investigation is looking into the case.
Assistant U.S. Attorney Parker Tobin and Daniel Lipkowitz of the Tax Division are prosecuting the case. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
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Key Facts
- State: Texas
- Category: Fraud & Financial Crimes
- Source: DOJ Press Release â†â€â€
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