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FOR IMMEDIATE RELEASE:
Friday - March 22, 2002
GREENVILLE - United States Attorney John Stuart Bruce announced that CHARLES JAMES PAYTON was
sentenced in federal court here on Wednesday, March 20, 2002, for federal income tax violations.
He was sentenced by U. S. District Judge Malcolm J. Howard to 78 months imprisonment, followed by three years of supervised release. PAYTON also was ordered to pay a special assessment of $800.00 and restitution to the Internal Revenue Service in the amount of $87,073.00. He was taken into custody immediately following the sentencing hearing.
PAYTON was convicted on October 12, 2001 of seven counts of willfully aiding and assisting in the preparation of false income tax returns and one count of conspiracy.
Testimony presented during his jury trial showed that PAYTON, of Greenville, N. C., operated a tax return preparation business from his office in the Lang's Crossroads Food Mart in Farmville, N. C. Witnesses testified that they met with PAYTON and his cousin, Ollie Maye III, at this location after learning that PAYTONwas preparing amended federal income tax returns that generated additional refunds. Evidence showed that these amended tax returns included false claims for additional medical expenses, charitable contributions, and employee job expenses. Witnesses also testified that they were to pay PAYTON either directly or through his company, Solid Rock Enterprises, a percentage of the refund amounts, usually 10%, as a fee for the preparation of the amended tax returns. Evidence showed that in one instance, PAYTON received a fee of more than $4,000.00 for preparing a return claiming a false $16,000.00 refund. Witnesses said PAYTON assured his clients that he knew the tax laws, because he had been an employee of the Internal Revenue Service. PAYTON admitted in court, however, that he had never been employed by the IRS.
Ollie Maye III, also of Greenville, testified that he was hired by PAYTON and prepared amended tax returns upon instruction from PAYTON. Maye also testified that PAYTON instructed him to prepare the amended tax returns by inflating itemized deductions through a calculation based upon the client's adjusted gross income. He added that he and PAYTON prepared these amended returns without concern for the actual expense amounts paid by the taxpayers.
Ollie Maye III pled guilty on May 15, 2001 to one count of aiding and assisting in the preparation of false income tax returns. He was sentenced on November 13, 2001 to 18 months imprisonment, followed by one year of supervised release. Maye also was ordered to pay a special assessment of $100.00 and restitution in the amount of $87,073.00 to the IRS.
At his sentencing hearing, it was noted that PAYTON committed perjury during this trial testimony when he testified that he had never prepared a false tax return or told clients that he had worked for the IRS. The total tax loss attributable to PAYTON and Maye was determined to be $528,885.00.
The investigation of this case was conducted by agents with the Internal Revenue Service-Criminal Investigation. Michael J. Thomas, Special Agent in Charge of the IRS-CI, Charlotte Field Office, stated that this sentencing serves to remind taxpayers that they are responsible for filing accurate tax returns with the Internal Revenue Service. He added that taxpayers should be leery of return preparers who charge fees for return preparation based upon the amount of refund generated by the returns they produce. Also, taxpayers should be suspicious of any return preparer who claims to have "secret" or "insider" information not available to all tax return preparers, as well as those that do not require documentation to substantiate amounts claimed on the returns they prepare.
The Internal Revenue Service provides all tax law information to the public and is available to assist taxpayers with the preparation of accurate tax returns either by calling 1-800-829-1040 or through taxpayer service counters located at IRS offices. Thomas advised that anyone who suspects they have information about tax fraud may contact the IRS at 1-800-829-0433. The public may obtain additional information about IRS-CI via the internet at www.ustreas.gov/irs/ci .
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