15 November 2004 – LAWFUEL – Criminal, legal, law news – A La Mesa ma…

15 November 2004 – LAWFUEL – Criminal, legal, law news – A La Mesa man who invented a product and sold his company for $1 million was found guilty this afternoon on several federal charges for failing to pay income taxes on the money generated by the sale.

John Zentmyer, 62, who formerly lived in Tustin and prior to his arrest in 2003 was a reserve officer for the Los Angeles County Sheriff’s Department, was found guilty by a federal jury in Los Angeles of tax evasion, one count of loan fraud and three counts of structuring cash transactions to avoid federal reporting requirements.

The jury, which heard five days of testimony, learned that Zentmyer invented a wheel-locking device to be used on four-wheel-drive off-road vehicles. After forming a company to market his product, he sold the company eight years ago today for $1,008,000.

Zentmyer failed to file a tax return that reported any of the funds generated by the sale, nor did he pay any taxes on the income. Instead, he placed the funds into offshore bank accounts, used bank accounts in the names of other persons and entities and conducted financial transactions using large amounts of cash. Zentmyer owes $264,335 in back taxes.

The loan fraud conviction was based on the submission of a false employment letter in connection with a loan application to purchase a house in Tustin.

Zentmyer, who represented himself at the beginning of the trial and later represented himself jointly with an advisory counsel, argued that he was not guilty of tax evasion because he believed in good faith that he did not have to pay income taxes after reviewing old Supreme Court cases. He also claimed that he structured his financial transactions only because the bank required his social security number to file its report with the government and his religious beliefs prevented him from divulging his social security number, which he said he believed is the “mark of the beast.”

Zentmyer is scheduled to be sentenced by United States District Judge Audrey B. Collins on January 31. At sentenciing, Zentmyer faces a maximum possible penalty of 50 years in federal prison.

This case is the result of an investigation by IRS-Criminal Investigation Division and the United States Postal Inspection Service.

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