A federal jury convicted a Virginia man today of evading the payment of employment taxes, filing false tax returns and obstructing the IRS.
According to court documents and evidence presented at trial, from January 2008 through December 2009, James C. Jones Jr., of Christiansburg, owned and operated Lifeline Ambulance Service Inc. and was responsible for paying to the IRS approximately $200,000 in federal income and Social Security and Medicare taxes withheld from Lifeline’s employees’ wages. However, he did not pay those withholdings to the IRS. As a result, in December 2009, the IRS assessed the unpaid employment taxes against Jones personally. To obstruct IRS efforts to collect those taxes, Jones misrepresented that he did not have sufficient funds and assets to pay when, in fact, Jones owned multiple apartments and bank accounts in the Caribbean and a classic “muscle car” collection. Jones continued to obstruct IRS collection efforts by filing false tax returns for 2013 through 2018 that did not report the rental income from his Caribbean properties and claimed false deductions. Jones also falsely represented to the Justice Department that he did not have records responsive to a subpoena ordering him to produce foreign bank records, when in fact, he possessed these records as the director and owner of multiple foreign holding companies.
Jones faces a maximum penalty of five years in prison for tax evasion, three years in prison for each false return count and three years in prison for obstructing the IRS. He also faces a period of supervised release and monetary penalties. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division, U.S. Attorney Christopher Kavanaugh for the Western District of Virginia and Special Agent-in-Charge Kareem Carter of the IRS-Criminal Investigation (CI) Washington D.C. Field Office made the announcement.
IRS-CI is investigating the case.
Trial Attorneys Francesca Bartolomey, Todd Ellinwood and Brian Flanagan of the Tax Division and Assistant U.S. Attorney Charlene Day for the Western District of Virginia are prosecuting the case, with assistance from Assistant U.S. Attorney Kelly McGann for the Western District of Virginia.