Scheme to eliminate tax liability ends with prison sentence
March 26, 2014
Potentially 30 years in prison and $1.5 million in fines awaits convicted tax evader
March 26, 2014
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False Claims of Federal Excise Tax Exemption “Staggering”

What could you do with $110 million? According to prosecutor MacDonald, provide affordable housing to homeless veterans for an entire year or perhaps fund a nonprofit organization to help the poor for a century. Instead, $110 million is the amount that Evan Knoll stole as part of a long time tax fraud scheme.

Evan Knoll, a one time racing magnate, owned and operated General Sales and Services Inc., and did business as Torco Racing Fuels Inc., Knoll Gas, Knoll Gas Motorsports Inc., EWK, LLC and eRaceFuels, Inc. Knoll’s meteoric rise and fall in drag racing was on a scale that no one had ever seen. He funded cars in all classes and his Torco Company could be seen sponsoring national events. He had multiple homes, an airplane, lived an extravagant life, and according to what he said, knew it was all based on money he was stealing.

Charges filed by the U.S. Attorney’s Office alleged that through his company, Knoll filed fraudulent claims for refunds equal to more than $110 million in federal gasoline excise taxes. This occurred because high-octane racing fuel is exempt from federal excise tax on gasoline. Knoll pled guilty in July to one count of bank fraud and eight counts of filing a false claim against the government.

Prosecutors are calling for the 52-year old to serve “a substantial sentence of incarceration.” Their sentencing memo stated, “Knoll made ‘disparaging comments’ about the Internal Revenue Service agent who conducted an audit of Knoll’s company and uncovered the tax fraud.” Moreover, the memo notes that an uptick in sentencing is warranted for obstructing justice because Knoll feigned a mental condition that led to a mental incompetency evaluation that “cost the United States taxpayers thousands of dollars.” Conversely, Knoll’s attorney, John Karafa, asks for a sentence below the federal sentencing guidelines acknowledging that Knoll has accepted responsibility for his actions is unlikely to engage is such behavior again. Sentencing is scheduled for Wednesday.

Knoll’s attorney claimed that that the attraction to quick material wealth got the better of him and given the opportunity over again Knoll would “settle back into the quieter, small town lifestyle he has always known.”

Before things get out of hand it is vital to consult with an experienced criminal tax attorney. Early action is the best way to avoid a full and unyielding criminal prosecution.