Offshore Account and Credit Card Used to Hide Income
LAWFUEL – The Law News Network – A man admitted today in U.S. District Court in Los Angeles that he filed false federal income tax returns that underreported income from the sale of pharmaceuticals. Kelly Smith, 44, pleaded guilty today to subscribing to false income tax returns for 1999, 2000 and 2001 before U.S. District Judge Audrey B. Collins.
On September 6, 2005, Smith’s associates Jon M. Tamiyasu, 45, of Oak Park, California, and James H. Williams, 40, of Corona, California, also pleaded guilty before Judge Collins. Tamiyasu pleaded guilty to four counts of subscribing to false income tax returns for 1998, 1999, 2000 and 2001 and James H. Williams pleaded guilty to three counts of subscribing to false income tax returns for 1999, 2000 and 2001.
According to plea agreements filed in court, Williams worked as a salesman in the pharmaceutical industry. Tamiyasu and others established two companies – Actsys Medical, Inc. in 1994 and Apex Therapeutic Care in 1998. Smith worked for and partially owned both companies which are distributors and wholesalers of therapeutic plasma products, pharmaceuticals and therapeutic supplies.
Smith, Tamiyasu and Williams admitted that they formed an informal partnership to illegally purchase and resell diverted pharmaceutical products from patients. Tamiyasu, Williams and Smith purchased primarily Factor Concentrate, a product used in the treatment of hemophilia. The three men provided the diverted Factor Concentrate they purchased to Martin J. Bradley, Jr. of Savannah, GA and Martin J. Bradley III of Miami, FL. The Bradleys then sold the Factor Concentrate and distributed some of the profits to Tamiyasu, Williams and Smith. Tamiyasu, Williams and Smith deposited some of the proceeds from the sales into an off-shore bank account opened in the name of a trust. The trust purposefully concealed the identities of the three men. Smith, Tamiyasu and Williams accessed the funds in the off-shore trust account through the use of credit cards. Other profits and monies were distributed in the form of cash or checks, or payments made to third parties on Smith’s, Tamiyasu’s or Williams’ behalf. Smith, Tamiyasu and Williams did not report these monies on their federal income tax returns. Smith failed to report income of $845,083 on his 1999, 2000 and 2001 federal income tax returns. Tamiyasu failed to report income of $624,514 on his 1998, 1999, 2000 and 2001 federal income tax returns. Williams failed to report income of $861,563 on his 1999, 2000 and 2001 federal income tax returns.
Martin J. Bradley, Jr. and Martin J. Bradley III were indicted by a federal grand jury sitting in Savannah, GA on March 23, 2005 and were charged with racketeering and conspiracy to commit racketeering in violation of the Racketeering Influenced and Corrupt Organization (RICO) statute. They
were also charged with conspiracy to commit wire fraud and pay unlawful kickbacks, money laundering violations and failure to disclose interests in foreign bank accounts. (An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.) Trial for the Bradleys is set for February 21, 2006 before U.S. District Judge B. Avant Edenfield in Savannah, GA.
Smith is scheduled to be sentenced on July 17, by Judge Collins, at which time he faces a maximum sentence of 9 years imprisonment and a fine of $750,000. Tamiyasu and Williams are scheduled to be sentenced in May 2006, by Judge Collins, at which time Tamiyasu faces a maximum sentence of 12 years imprisonment and a fine of $1 million and Williams faces a maximum sentence of 9 years imprisonment and a fine of $750,000.
This case is a result of an investigation by the IRS-Criminal Investigation Division.
CONTACT: Assistant United States Attorney Alicia Villarreal