United States Attorney
Northern District of Texas

1100 Commerce St., 3rd Fl.
Dallas, Texas 75242-1699

Telephone (214) 659-8600
Fax (214) 767-0978

Granbury, Texas, Man Convicted
on Federal Tax Charges

United States Attorney Richard B. Roper announced that Granbury, Texas, resident, Phil Loren Myers, was convicted yesterday by a federal jury in Fort Worth, Texas. The jury found Myers guilty of both counts in a federal indictment charging him with failing to file personal income tax returns in 2001 and 2002. Myers faces a maximum statutory sentence of two years imprisonment, a $200,000.00 fine and restitution. He is scheduled to be sentenced by the Honorable Terry R. Means on September 25, 2006.

The government presented evidence at trial that during calendar years 2001 and 2002, Myers, a retired Braniff Airlines pilot, had failed to file tax returns after receiving income in excess of $320,000 consisting of profits from his investment in a currency trading business as well as additional taxable income from a pension plan and Social Security.

The government presented evidence at trial that the investment business was in fact an illegal “Ponzi scheme” run by Ronald Lovelady, of Garland, Texas, under the names Alpha Equities, Grupo Greystone, TXX-01 and Response Equities. Lovelady was convicted and was sentenced in August to five years in federal prison and ordered to pay more than $10,000,000 in restitution to the victims of his crime. Myers, although not charged with knowing involvement in the Ponzi scheme, was one of the first investors and received huge profits on his initial investment of not more than $5,000.

In testimony at trial, Myers admitted that he had quit filing returns in 1984 after losing a civil court case against the IRS. In the years since, he had sent the IRS numerous pieces of correspondence and literature asserting various reasons why he did not have to file a return such as the claims that: he was not subject to the tax laws because he was not a “person subject to taxation” as defined in the tax code, that the IRS was an illegal foreign corporation, that the 16th Amendment was unconstitutional and that IRS returns were illegal because they failed to comply with the Paperwork Reduction Act. He also claimed that he could not be investigated because his name was copyrighted. In finding the defendant guilty after deliberating less than an hour, the jury rejected his claim that these asserted arguments proved Myers did not willfully violate federal laws requiring him to file a tax return.

Erick Martinez, Special Agent in Charge of the Dallas Field Office of IRS - CI, said, “Individuals like Mr. Myers who believe that the government doesn't have the right to collect income taxes and who take active steps to frustrate this critical government function should take notice of this conviction. It sends a clear message that no one is above compliance with the tax laws, and that non-compliance will not be tolerated. The IRS will continue to investigate those who cheat their fellow citizens, and the end result will be time in federal prison.”

U.S. Attorney Richard Roper praised the investigative efforts of the Internal Revenue Service - Criminal Investigation. The case was prosecuted by Assistant United States Attorneys Phillip C. Umphres and Alan Buie.

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