WASHINGTON — LAWFUEL – The US Legal Newswire – The former president and co-owner of Domecq Importers Inc. of Larchmont, N.Y., and Old Greenwich, Conn., today pleaded guilty and has agreed to serve 10 years in prison for conspiring to commit tax fraud and to defraud Allied Domecq PLC, the
Department of Justice announced.
The executive, Michael L. Domecq, was originally indicted on Sept. 5, 2000, in U.S. District Court in Manhattan for participating in a scheme to divert more than $14.6 million from Domecq Importers into personal offshore bank accounts. Domecq’s sentence is ultimately the
decision of the sentencing judge.
According to that indictment, Domecq and other top executives at Domecq Importers diverted money directly from Domecq Importers with the assistance of certain outside vendors of
advertising materials and services. The conspiracy took place from at least as early as 1989 until October 1995. The outside vendors invoiced the company for goods never produced and services
never performed. Domecq and his co-conspirators approved the phony invoices for payment and had the company pay them. The outside vendors then issued checks to shell corporations
controlled by Domecq and his co-conspirators. The checks were usually deposited in the co-conspirators’ offshore bank accounts. Domecq and the co-conspirators failed to pay income taxes on most, if not all, of this money. Domecq was the president of Domecq Importers until
1995 and then he became the president of Allied Domecq Spirits & Wine, Latin America.
In court, Domecq acknowledged that he and others deliberately concealed income from the Internal Revenue Service (IRS) and submitted false and fraudulent documentation to the IRS.
Domecq also acknowledged that over a period of several years, he and others agreed to divert money from Domecq Importers as additional income to themselves. Domecq, formerly a resident of Greenwich, Conn., moved to Spain in 1997 while the investigation was pending. He was later arrested and convicted in the United Kingdom in 2006 for possessing a false Spanish passport and illegally obtaining a United Kingdom driver’s license.
Domecq was extradited back to the United States in 2007.
“Today’s plea agreement and proposed 10-year jail sentence underscores that the Department of Justice will vigorously investigate and prosecute individuals who violate criminal
laws no matter how hard they try to escape the U.S. legal system,” said Thomas O. Barnett,