SRC CONSTRUCTION, INC., Filing a False Tax Return, Connecticut 2006

Meriden, CT - In a shocking turn of events, Meriden-based SRC CONSTRUCTION, INC. has been hit with a $250,000 fine for filing a false tax return. The company, a real estate development and construction management firm, employed an internal accounting department that handled the general ledger, journal entries and bank accounts for the business.

According to court documents, at least one individual employed by the company was responsible for overseeing and coordinating the business and financial matters for the company's owner. This individual and others under their control reviewed payments made by the company to employees, vendors and others, and directed how the items should be expensed.

The individual instructed others that most, if not all, invoices be paid out of company funds, including a series of expenses that the individual knew were not deductible business expenses. This individual also provided to the company's outside accountants all information to prepare audited financial statements and tax returns, knowingly providing a substantial number of non-deductible expenses.

As a result, in February 2006, SRC CONSTRUCTION willfully made and subscribed a false corporate tax return, a 2004 Form 1120 for the fiscal year ending April 30, 2005, that overstated expenses. This led to the company failing to report corporate income totaling $296,642, resulting in a tax loss of $112,609.

On July 15, 2016, SRC CONSTRUCTION pleaded guilty to one count of filing a false tax return.

According to the court, SRC CONSTRUCTION has paid the $250,000 fine, as well as the identified back taxes due of $112,609. The company has also implemented various accounting and internal changes to ensure future tax and accounting compliance.

This matter was investigated by the Internal Revenue Service - Criminal Investigation Division and the Federal Bureau of Investigation. The case was prosecuted by Assistant U.S. Attorneys Christopher Schmeisser and Jennifer Laraia.

Mandatory Facts:

Defendant/Respondent: SRC CONSTRUCTION, INC.

Criminal Charges: Filing a False Tax Return

City and State: Meriden, Connecticut

Exact Date: February 2006 (crime date), July 15, 2016 (sentencing date)

Sentence/Outcome: $250,000 fine, $112,609 back taxes due

Dollar Amounts: $296,642 (unreported corporate income), $112,609 (tax loss), $250,000 (fine)

Source: https://www.justice.gov/usao-ct/pr/meriden-construction-company-fined-250k-filing-false-tax-return