Local couple admits to tax fraud

A St. Ignatius couple admitted in federal court on Wednesday to not reporting years worth of income to the federal government.

Peggy DeYoung and John DeYoung, both 71, each pleaded guilty to one count of conspiracy to defraud the United States.

In the government’s officer of proof, it was noted that neither Peggy or John have filed an individual income tax return since 1998. From 2007 through 2011, Peggy earned income through her ownership interest in two companies that own Southern California mobile home parks. The pair also established a number of trusts and opened bank accounts in the names of those trusts using fabricated taxpayer identification numbers. They then paid personal expenses from the accounts. The fake tax identification numbers dated back to 2006, court documents note.

According to initial charging documents, between March 2010 and October 2015 Peggy issued 127 checks from one bank trust account, totaling $1,068,974. Peggy wrote a single check from another trust account with a different bank on Dec. 17, 2014, in the amount of $80,000. Two checks from a third trust account were written from March 2010 until October 2012 for a total amount of $16,750. Eight checks from a fourth trust account were written from March 2015 until November 2015 for a cumulative amount of $248,000.

The pair were initally charged with five felony counts each, though four of those counts were dropped in a plea agreement.

According to a plea agreement the fraud cost the U.S. Treasury a tax loss of $376,350.

Sentencing is scheduled for April 21. The DeYoungs face up to five years in prison, plus a period of supervised release, restitution and monetary penalties.

Principal Deputy Assistant Attorney General Caroline Ciraolo, head of the Justice Department’s Tax Division, and U.S. Attorney Michael W. Cotter thanked special agents of IRS–Criminal Investigation, who conducted the investigation into the case. Assistant U.S. Attorney Chad Spraker and Trial Attorney Rebecca Sable of the Tax Division were also commended for prosecuting the case.

Additional information about the Tax Division and its enforcement efforts may be found on the division’s website, https://www.justice.gov/tax.

Reporter Megan Strickland can be reached at 758-4459 or mstrickland@dailyinterlake.com.