Law Firm Trio Plead Guilty to Conspiracy to Defraud U.S.
Posted by Joseph Shemaria | Jan 22, 2015
Sep 1, 2009
SACRAMENTO, Calif.: United States Attorney Lawrence G. Brown announced today that WAYNE J. MAJORS, 55, his wife, LEAH M. ANDERSON, 37, and his sister SANDRA VILLEGAS, 58, currently residing in Arizona, pleaded guilty last Friday before United States District Judge Lawrence K. Karlton to conspiracy to defraud the United States by impeding and obstructing the function of the Internal Revenue Service.
This case is the product of an extensive investigation by the Internal Revenue Service, Criminal Investigation.
According to Assistant United States Attorney Richard J. Bender, who is prosecuting the case, from 1999 to 2001, MAJORS, with assistance from ANDERSON and VILLEGAS, set up and managed a Sacramento law firm, American Law Center, that specialized in bankruptcy law. The defendants, non-lawyers, managed the business side of the firm including all accounting functions. After payment of the firms expenses, MAJORS paid the remaining profits to shell companies controlled by ANDERSON and VILLEGAS. Much of the funds transferred into the shell companies in 1999 to 2000 were then transferred into ANDERSON and VILLEGAS personal bank accounts and used to pay personal expenses of the three defendants.
To maximize American Law Centers after-tax profits and to avoid paying individual income taxes on the monies they received, MAJORS and ANDERSON falsified corporate tax returns by under reporting the gross receipts and business deductions of ALC, resulting in no corporate income tax owing for 1999 or 2000. The under reporting of the business deductions was calculated to hide the income going to the shell companies which were owned/controlled by the defendants, much of which income then flowed through to the defendants personal bank accounts. MAJORS, ANDERSON, and VILLEGAS then avoided payment of individual federal taxes by either not reporting this income on their tax returns or not filing any tax returns at all.
A similar scheme was used concerning the 2001 corporate tax return since the tax return was prepared by an independent CPA who accurately reported the corporate income. However, the firms profits were still funneled through to the shell companies controlled by the defendants, and then to the benefit of the defendants personally. No defendant filed an individual tax return for that year.
The defendants are scheduled to be sentenced by Judge Karlton on November 10, 2009, at 9:15 a..m. The maximum statutory penalty for a violation of conspiracy to defraud the United States is five years in prison. The actual sentence, however, will be determined at the discretion of the court after consideration of the Federal Sentencing Guidelines, which take into account a number of variables and any applicable statutory sentencing factors.