June 24, 09

NEWS / Alabama Resident Pleads Guilty to Filing False Tax Returns in Connection with Embezzlement Scheme

WASHINGTON - Sims Lawson Jr., a resident of Killen, Ala., pleaded guilty yesterday to filing false tax returns for years 2002 through 2004, the Justice Department and Internal Revenue Service (IRS) announced. Lawson appeared before Judge R. David Proctor in Birmingham, Ala., and admitted that he failed to pay federal income taxes of $369,038 and state income taxes of $50,938.

According to the criminal information and plea agreement, Lawson willfully omitted from his tax returns income that he had embezzled from an estate that he managed. Lawson was hired in 2002 to co-manage an estate, and his duties included managing the books and records of the estate, collecting on loans made by the estate and determining the estate’s value for tax purposes. In 2005, the estate received an ex parte court order removing Lawson from his responsibilities as trustee. It was later determined that Lawson had misappropriated at least $721,417 in 2002, 2003 and 2004, which he also failed to report on his personal tax returns. The estate also paid Lawson an additional $297,352, which he failed to report on his personal tax return.

According to the criminal information and plea agreement, throughout the time period he was employed with the estate, Lawson misappropriated money from the estate in several ways. For example, Lawson wrote checks from the estate payable to himself and used estate checks to pay his personal expenses. Lawson fraudulently used estate checks to pay for the installation of a swimming pool at his personal residence, renovations on his personal residence, and extravagant trips to locales including New York City, Las Vegas, the Sundance Film Festival, the Bahamas and Disney World. Lawson also purchased timeshares at the Atlantis resort in the Bahamas, as well as timeshares at the Disney World resort in Orlando, Fla., with the embezzled funds. Lawson also used funds from the estate to purchase jewelry and tickets to various events. All of these renovations and purchases constituted income to Lawson.

Judge Proctor has set sentencing for Oct. 6, 2009. Lawson faces a maximum sentence of nine years in prison and a maximum fine of $750,000 or twice the gross gain to the defendant or twice the gross loss to the IRS.

Acting Assistant Attorney General John A. DiCicco thanked Tax Division attorneys Jed Silversmith and Matthew Mueller, who prosecuted the case. He also thanked the IRS Criminal Investigation agents in the Birmingham office, who investigated the case.

More information about the Justice Department’s Tax Division and its enforcement efforts is available at http://www.usdoj.gov/tax.


Tags: criminal investigation,