HOUSTON – In a move aimed at cracking down on tax fraud, Kenneth Robert Bruce has been convicted on all counts as charged, to include 26 counts of willfully filing a false claim against the U.S. and for obstructing the Internal Revenue Service (IRS), announced U.S. Attorney Kenneth Magidson.
The verdict was returned late yesterday after a five-day trial and approximately 2 ½ hours of deliberation. During trial, the jury heard that Bruce prepared 26 false income tax returns or amended income tax returns claiming a total of more than $9 million in false income tax refunds. One return was for himself and 25 were for other taxpayers.
Bruce attached false IRS forms 1099-OID (Original Issue Discount) to the tax returns, falsely reporting the taxpayers had received huge amounts of income from OID and had all or nearly all of the false amounts of income withheld for federal income taxes. The huge, false amounts of withholdings formed the bases for the claims for false claims for tax refunds.
The jury also convicted Bruce on one count of corruptly endeavoring to obstruct and impede the administration of the Internal Revenue Code.
U.S. District Judge Nancy Atlas presided over trial and has set sentencing for June 9, 2015. At that time Bruce faces up to five years on each count of filing a false claim and up to three years for the obstruction. Each conviction also carries as possible punishment a $250,000 fine.
The convictions were the result of an investigation by IRS – Criminal Investigation and the Treasury Inspector General for Tax Administration. Assistant U.S. Attorneys Charles J. Escher and Jim McAlister are prosecuting the case.
Bruce’s actions demonstrate a blatant disregard for the law and a blatant attempt to defraud the U.S. government out of millions of dollars. His conviction is a reminder that tax fraud will not be tolerated and those who engage in such activities will be held accountable.
The case highlights the importance of the IRS and its partners in preventing and investigating tax fraud. The IRS-CI and Treasury Inspector General for Tax Administration worked tirelessly to bring Bruce to justice, and their efforts are a testament to the dedication and commitment of these agencies.
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Key Facts
- State: Texas
- Category: White Collar Crime|Fraud & Financial Crimes
- Source: DOJ Press Release â†â€â€
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