United States Attorney's Office District of Connecticut
Press Release

HAMDEN TAX PREPARER PLEADS GUILTY

Kevin J. O'Connor, United States Attorney for the District of Connecticut, announced that JOHN K. CANNON, age 63, of 36 Kelly Road, Hamden, Connecticut, pleaded guilty today to charges that he assisted clients of his tax preparation business with filing materially false federal income tax returns, and that he failed to file his own federal income tax return for the 2001 calendar year. United States District Judge Mark R. Kravitz accepted CANNON's plea of guilty this afternoon in New Haven federal court. CANNON pleaded guilty to two counts of an Indictment that was returned by a federal grand jury sitting Hartford on March 31, 2004.

During the plea hearing, CANNON, who has been self-employed as a tax preparer for 39 years, admitted that between 1999 and 2001, he willfully prepared hundreds of federal income tax returns in which he falsely represented that his clients were lawfully entitled to claim itemized deductions, business expenses, rental expenses and other deductions to which they were not entitled. CANNON acknowledged that he intentionally sought to interfere with the Internal Revenue Service's ability to investigate and audit his preparation of those returns, and that, as a result of his actions, he deprived the IRS of nearly $1 million in tax revenue.

During the proceedings, CANNON also admitted that he willfully failed to file his own income tax return for the calendar year 2001, as required by law, despite earning more than $250,000 from his tax preparation business in that year. CANNON acknowledged that he personally owes the IRS in excess $110,000 in back taxes.

CANNON is scheduled to be sentenced by Judge Kravitz on September 16, 2004, when he faces a possible term of imprisonment of up to four years and a fine of up to $100,000. As a condition of his guilty plea, CANNON has agreed to pay any and all taxes, penalties and interest due and owing to the United States. In addition, he has agreed to the entry of a permanent injunction pursuant, the effect of which will be to bar him from engaging in the business of preparing income tax returns or from further acting as an income tax preparer in the future.

This case is being investigated by the Internal Revenue Service, Criminal Investigation Division. The case is being prosecuted by Supervisory Assistant United States Attorney Ronald S. Apter.

CONTACT:

U.S. ATTORNEY'S OFFICE
Tom Carson
(203) 821-3722
thomas.carson@usdoj.gov