A former financial advisor with Bank of America has pleaded guilty to tax evasion and fraud charges for defrauding six people out of at least $2 million from 2010 to 2011. 60-year old Gary H. Lane of Reno, Nevada, pleaded guilty on Tuesday to five counts of attempted tax evasion, plus another 12 counts of mail fraud. Now, Lane faces up to 20 years in prison for each mail fraud count and up to five years in prison on each tax count, as well as fines of up to $250,000 per count.
According to the indictment, Lane previously worked as a financial advisor for Bank of America Investment Services, which would go on to merge with Merrill Lynch, until March of 2011. While Lane was a Bank of America employee, he allegedly planned a scheme to coax clients into investing their money through an E-Trade account, instead of using normal bank procedures.
In particular, Lane allegedly sought out investors who were elderly or lacking in investing experience, desired high returns, and were risk-averse. Lane then told his investors their funds would be invested in U.S. Treasury Bonds, which would pay better than six percent interest and would mature in two years. To help give the scheme an air of legitimacy, Lane corroborated the trades by manufacturing false confirmations and distributing them to the victims via mail.
The indictment alleges that Lane defrauded six victims out of more than $2 million over a time period spanning from January 2010 to March 2011. The indictment also alleges that Lane filed fraudulent individual tax returns from 2006 through 2010, substantially understating his income and tax due to the IRS.
While Lane’s cautionary tale may sound extreme, similar stories unfold around the country all the time. The trio of 76-year-old William Paul Boyter, 51-year-old Michael Paul Boyter, and 49-year-old Anthony Reuben Riley — all residents of Shreveport, Louisiana — recently pleaded guilty to multiple charges of wire fraud, tax evasion, money laundering, conspiracy, and failure to comply with federal banking regulations. A-1 Auto Finance Company and Mike’s Auto Sales Inc., which are operated by three individuals, also stand charged as defendants in the case.
According to evidence contained within the 19-count indictment, the defendants participated in a long-term conspiracy spanning from 1996 all the way through November 2010 — over a decade of money laundering. The defendants’ scheme allegedly revolved around financing and selling new and used vehicles to individuals who derived (or represented to derive) major portions of income from the distributing illegal drugs. The defendants knowingly accepted cash proceeds from drug dealers, permitted vehicle purchases in the names of nominees, and distorted records of the payments they received.
The indictment also charges that Michael Boyter evaded taxes for 2007 through 2010 by filing false information on his tax documents. The indictment charges that Boyter deliberately understated his income on personal tax returns while paying for personal items and services — including an extensive home remodeling project — with business funds. In his plea agreement, Boyter agreed to pay nearly $300,000 following an extensive IRS criminal investigation.
The defendants also jointly agreed to forfeit property of A-1 Auto Finance and Mike’s Auto Sales, as well as a money judgment in the amount of $1.3 million.
We would hope that you never find yourself in a situation like either of those described above. However, even an honest mistake or a seemingly insignificant omission has the potential to snowball into a huge problem — even if fraud or willful evasion was not your intent.
If you’re worried about tax compliance, you need the guidance of a trained and experienced tax professional. The attorneys at the Tax Law Office of David W. Klasing bring years of experience to the table to help guide you in the right direction, whether you need assistance with an IRS tax audit, litigation, criminal charges, or other matters. To set up a private consultation with our Irvine tax attorneys, call (800) 681-1295 today.