DENVER - Christopher Paul Kelly, age 49, of Denver, Colorado was indicted by a federal grand jury in Denver on June 7, 2017 on the charge of tax evasion, Acting United States Attorney Bob Troyer and IRS Criminal Investigation Special Agent in Charge Steven Osborne announced. The indictment remained sealed until Kelly made his initial appearance today, June 27, 2017 in U.S. District Court before a U.S. Magistrate Judge, where he was read his rights and advised of the charges pending against him.
According to the indictment, from July 2007 through the middle of 2015, Kelly held ownership interests in various merchant card service companies which sold vendors the ability to accept credit card payments. These ownership interests caused Kelly to earn taxable income which generated income tax due of $195,916 in 2006, $285,414 in 2007, and $16,766 in 2012. Kelly received his prepared 2006 tax return from his accountant on July 16, 2007 but did not file it until October 2012. Kelly filed his 2007 tax return in March 2012 and his 2012 tax return in 2013.
Instead of paying his outstanding tax liabilities, between 2008 and 2015, Kelly purchased or leased expensive automobiles and rented expensive homes as his personal residence. In 2008, Kelly caused J.L. to purchase a Mercedes automobile in J.L.’s name for $80,346.19 which Kelly paid for and used personally. Between 2011 and 2013, Kelly received residuals from Company S of $102,978 through his company Mile High Merchant Group.
In 2012, Mile High Merchant Group became a “dba" of Imax Business Solutions Denver LLC (IMAX) and Kelly became a member of IMAX with a 48% ownership interest. On Jan. 1, 2012, Kelly sent a letter to Company S stating Kelly and Mile High Merchant Group were “transferring and assigning all liabilities and assets to Imax Business solutions LLC and [K.T.] who is the sole managing member." In 2012 and 2013, Company S continued to do business with Kelly through IMAX and paid residuals of approximately $184,406 and $137,043, respectively.
When the IRS contacted Kelly regarding the outstanding tax liabilities, Kelly made false statements to the IRS Revenue Officer attempting to collect the debt. After the IRS levied Kelly’s U.S. Bank account, Kelly stopped making deposits into the account and allowed it to become overdrawn. Instead, Kelly used a bank account controlled by his girlfriend, M.A., to deposit much of his income and pay many of his personal expenses. Kelly also cashed out the entire value of his life insurance account and withdrew the balance of his 401(k) account, removing the IRS’ ability to place a levy on these assets.
Kelly is charged with one count of tax evasion which carries a penalty of up to 5 years in prison and a fine of up to $250,000.
This case was investigated by the Internal Revenue Service - Criminal Investigation and is being prosecuted by Assistant U.S. Attorney Pegeen Rhyne.
The charges contained in the Indictment are allegations and the defendant is presumed innocent unless and until proven guilty.
Source: U.S. Department of Justice, Office of the United States Attorneys
