A Rose City dentist was found guilty by a jury in federal court of income tax evasion, mail fraud and making false statements to the Internal Revenue Service, U.S. Attorney Barbara McQuade announced today.
McQuade was joined in the announcement by Jarod Koopman, Special Agent in Charge of the Internal Revenue Service, Criminal Investigation.
Convicted was Carter White Rae, of Rose City, Michigan, after a trial before U.S. District Judge Thomas L. Ludington in Bay City, Michigan.
According to court records and evidence introduced at trial, Rae refused to pay both federal and the state income taxes from 2001 through 2011. Rae utilized many different tactics to avoid paying taxes that he knew he owed, including operating his dental practice using the Employer Identification Number (EIN) of the former owner; opening and using a business bank account in the name and the EIN of the former owner of the practice; closing his personal bank account and using only his business bank account, cash and money orders to pay his personal expenses.
The evidence at trial showed that Rae took many steps to deceive the IRS. He characterized payments to his wife as “payroll" expenses even when his wife, who rarely worked for his dental business, lived in a different state. Rae directed payments from dental insurance companies to be diverted to third parties to avoid an Internal Revenue Service levy, and he also refused to produce records pursuant to a court order directing him to comply with an IRS Summons.
“The jury has sent a strong message that our citizens will not tolerate those who attempt to evade their taxes. IRS-CI will continue to pursue these types of cases reaffirming our message that we do not expect honest taxpayers to foot the bill for those who attempt to break the tax laws," said Special Agent in Charge Jarod Koopman.
Sentencing currently is scheduled for Feb. 25, 2015, before Judge Ludington. Rae faces a statutory maximum potential sentence of 5 years in prison for the evasion and false statement counts and a maximum term of 20 years imprisonment for the mail fraud charge. All three counts carry a fine of up to $250,000.
The case was investigated by special agents of the IRS-Criminal Investigation and is being prosecuted by the U.S. Attorney’s Office in Bay City.
Source: U.S. Department of Justice, Office of the United States Attorneys
