JURY FINDS COUPLE GUILTY OF SKIMMING OVER $1.5 MILLION FROM BUSINESS

FROM:  U.S. JUSTICE DEPARTMENT
Friday, February 20, 2015
Georgia Couple Found Guilty of Tax Fraud

A Milledgeville, Georgia, couple were found guilty of tax fraud following a three-day jury trial for skimming more than $1.5 million in cash from their business without disclosing the income, the Department of Justice announced.

Kenneth Horner, 58, and Kimberly Horner, 53, were charged with filing false corporate and personal tax returns for the years 2007 and 2008.  They were convicted of all four counts charged.  Their sentencing is scheduled for May 6 at 10:00 a.m. before U.S. District Judge Timothy C. Batten Sr.

“This jury recognized the defendants’ handling of cash for what it really was: a ploy to avoid disclosing income and paying taxes,” said Acting U.S. Attorney John Horn of the Northern District of Georgia.

“In willfully failing to report their total business income to the IRS, the Horners cheated the system and dodged the same basic responsibility that millions of other business owners comply with every year:  fairly and honestly reporting their earnings,” said Principal Deputy Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division.  “Today’s verdict establishes that those who engage in such criminal conduct will be held accountable. The Tax Division is committed to working with its law enforcement partners to identify, investigate and vigorously prosecute these offenders.”  

“At this time of year, when hard-working citizens are sitting down to prepare their tax returns, it is especially disappointing to see the overt steps some individuals will take to hide their taxable funds from the government,” said Special Agent in Charge Veronica F. Hyman-Pillot of the Internal Revenue Service (IRS)-Criminal Investigation.  “Taxpayers deserve our vigilance in the investigation and prosecution of individuals who willfully underreport their income and evade the payment of their fair share of taxes.”

According to Acting U.S. Attorney Horn, the charges and other information presented in court: Kenneth and Kimberly Horner owned Topcat Towing and Recovery Inc. (Topcat Towing), a towing business in Lithonia, Georgia.  Between 2005 and 2008, Topcat Towing had an exclusive contract with DeKalb County, Georgia, for all county car tows needed from the south precinct of the county.  Between 2005 and 2008, the defendants skimmed more than $1.5 million in cash receipts from their towing business and deposited those cash receipts into their personal bank account without disclosing the income to their tax return preparer or on corporate and personal tax returns filed with the IRS.  The defendants tried to conceal their cash deposits from the government by “structuring” their deposits, which is the act of splitting up cash deposits that exceed $10,000 for the purpose of evading a Currency Transaction Report (CTR) from being filed.

Most financial institutions, including banks, are generally required to file CTRs for cash transactions that exceed $10,000.  CTRs are submitted to the U.S. Department of Treasury.  In 2007 and 2008, the defendants used their unreported cash, in part, to build a custom home in Conyers, Georgia, that was appraised at more than $900,000.  The defendants owe approximately $400,000 in taxes to the IRS for their unreported income.

This case is being investigated by the IRS-Criminal Investigation. Trial Attorney Christopher J. Maietta of the Tax Division and Assistant U.S. Attorney Steven D. Grimberg of the Northern District of Georgia are prosecuting the case.