Friday, November 18, 2016

Cass County man sentenced for tax evasion totaling nearly $1 million

Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Peculiar, Mo., man associated with “sovereign citizens” groups was sentenced in federal court yest. for tax evasion totaling nearly $1 million over the past decade.

Harold R. Stanley, 62, of Peculiar, was sentenced by U.S. District Judge Roseann Ketchmark to five years in federal prison without parole. Yesterday’s sentencing includes a sentencing enhancement for obstruction of justice. Stanley was taken into custody at the conclusion of yesterday’s hearing.

On June 2, 2016, Stanley was found guilty at trial of one count of tax evasion and one count of endeavoring to obstruct and impede the due administration of the internal revenue laws. Evidence submitted during the trial established that Stanley had a substantial income but deliberately and willfully refused to pay any federal income tax.

Stanley, an electrical engineer, was hired by companies as a consultant and received $971,604 from self-employment from 2005 to 2009 as an independent contractor. According to court documents, Stanley is a tax defier who failed to file any tax returns for 2005 and 2006. Stanley has participated in “sovereign citizens” groups that believe the federal income tax system is voluntary and that they do not have to pay their fair share in taxes.

For tax years 2007 through 2009, Stanley filed substantially correct returns but left the tax line entry blank and failed to submit any payment. According to court documents, Stanley has not filed a tax return for tax years 2010 through 2015.

The total criminal tax loss, including relevant conduct, for 2005 through 2015 totals $980,025. Stanley was convicted at trial of evading taxes from 2005 through 2009. During that time, Stanley had taxable income of $686,829; the criminal tax loss for 2005 through 2009 is $259,900. In sentencing Stanley today, the court also considered his tax evasion from 2010 through 2015 as relevant conduct.

Court documents also cite several actions taken by Stanley that constituted a willful attempt to obstruct the administration of justice in this case.

Stanley submitted fake money orders for payment to the Internal Revenue Service, returned documents to the Internal Revenue Service claiming that the tax assessments were satisfied because they were “Accepted for Value,” filled out payment vouchers with his name in all capital letters but didn’t submit payment and submitted a false criminal referral to IRS – Criminal Investigation.

After his arrest, Stanley filed a civil suit against the Commissioner of Internal Revenue, an employee of the IRS, and an Assistant United States Attorney. On July 22, 2016, the District Court dismissed the case with prejudice. The court wrote that “by filing his complaint in this court, Mr. Stanley attempted to throw a wrench into his criminal proceedings in the Western District of Missouri and re-present the same arguments that he had previously and unsuccessfully litigated in other federal courts including the United States Tax Court, the Western District of Missouri, and the Eighth Circuit Court of Appeals.”

On June 9, 2016, after the verdict in this case, a claim for damages was filed on behalf of Stanley, alleging that “Chief Magistrate Judge Sarah W. Hayes, Judge Roseann A. Ketchmark & District Attorney Paul Becker trying to collect an IRS debt in violation of 18 USC section 8 and when the 26 CFR states its voluntary and a civil action not criminal.” The claim for damages alleges personal injury in the amount of $55 million.

This case was prosecuted by Assistant U.S. Attorney Paul S. Becker. It was investigated by IRS-Criminal Investigation.