Seven New Englanders have been indicted in Boston for conspiracy to defraud the U.S. government after they were accused of promoting multiple tax fraud schemes.
William Scott Dion and Catherine Floyd of Sanbornville, N.H., Charles Adams of Norwood, Mass., and Gary Alcock of Westborough, Mass., were arrested Thursday. Arrest warrants have been issued for Gail and Myron Thorick, both of West Warwick, R.I., and for Kenneth Scott Alcock of Westborough, Mass.
Dion, Floyd, and Adams allegedly ran a payroll tax scheme to pay employees under the table without withholding payroll taxes for the IRS. The three allegedly promoted the scheme to others under three different names: Contract America, Talent Management, and New Way Enterprises. Approximately 150 customers subscribed to the scheme.
Another conspiracy count accuses husband and wife Gail and Myron Thorick of conspiring with Dion and Floyd to defraud the U.S. by promoting and operated a warehouse banking scheme that helped subscribers conceal their income and assets from the IRS. According to the indictment, the warehouse scheme operated under three different names: Your Virtual Office, Office Services, and Calico Management.
As part of the scheme, the defendants allegedly maintained accounts at several banks and used the accounts to deposit and commingle business receipts and other funds from subscribers in order to mask the true ownership of the funds. Between 2000 and 2005, the defendants allegedly caused more than $16 million to be deposited into the accounts. When subscribers wanted to withdraw cash from the accounts, it would be delivered to them wrapped in aluminum foil. Gary Alcock and his brother, Kenneth Scott Alcock, were allegedly among the subscribers to the payroll tax scheme.
If convicted on the conspiracy and tax evasion counts, the defendants face up to five years in prison on each count, together with fines of up to $250,000 or twice the financial gain to the defendant or loss to the IRS, to be followed by three years of supervised release. The charges for obstructing the IRS carry maximum penalties of three years in prison, fines of $250,000 and one year of supervised release. False tax return charges each carry a maximum penalty of three years in prison, with fines of $250,000 and one year of supervised release. The failure-to-file charge carries a maximum one-year prison term, a fine of $100,000 and one year of supervised release.
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