v. MISDEMEANOR INFORMATION

Transcription

1 Case 3:13-cr JO Document 1 Filed 04/05/13 Page 1 of 7 Page ID#: 1 FILED 5 ~: '1315:jjj)DC-DRP UNITED STATES DISTRICT COURT DISTRICT OF OREGON PORTLAND DIVISION UNITED STATES OF AMERICA Case ~o~l~3~c~~--_l_s_ 4 J_O_IIIIlJ_ v. MISDEMEANOR INFORMATION KARL CHRISTIAN BRENNEMAN, 26 u.s.c Defendant. THE UNITED STATES ATTORNEY CHARGES: COUNT I (26 U.S.C Willful Failure to Pay Income Tax) During calendar year 2007, Defendant KARL CHRISTIAN BRENNEMAN, who was a resident of Portland, Oregon, had and received a taxable income of $240,317.00, on which taxable income there was owing to the United States of America an income tax of$67, He was required by law to pay, on or before April 15, 2008, that income tax to the Internal Revenue Service Center, at Fresno, California to a person assigned to receive returns at the local office of the Internal Revenue Service at Portland, Oregon, or to another Internal Revenue Service office permitted by the Commissioner of the Internal Revenue. Well knowing all the Page 1- MISDEMEANOR INFORMATION (United States v. Karl Christian Brenneman) I I t

2 Case 3:13-cr JO Document 1 Filed 04/05/13 Page 2 of 7 Page ID#: 2 foregoing, he did willfully fail, on April15, 2008, in the District of Oregon and elsewhere, to pay the income tax due. All in violation of Title 26, United States Code, Section COUNT II (26 U.S.C Willful Failure to Pay Income Tax) During calendar year 2008, Defendant KARL CHRISTIAN BRENNEMAN, who was a resident of Portland, Oregon, had and received a taxable income of$218,631.00, on which taxable income there was owing to the United States of America an income tax of$59, He was required by law to pay, on or before April15, 2009, that income tax to the Internal Revenue Service Center, at Fresno, California, to a person assigned to receive returns at the local office of the Internal Revenue Service at Portland, Oregon, or to another Internal Revenue Service office permitted by the Commissioner of the Internal Revenue. Well knowing all the foregoing, he did willfully fail, on April15, 2009, in the District of Oregon and elsewhere, to pay the income tax due. All in violation of Title 26, United States Code, Section COUNT III (26 U.S.C Willful Failure to Pay Income Tax) During calendar year 2009, Defendant KARL CHRISTIAN BRENNEMAN, who was a resident ofportland, Oregon, had and received a taxable income of$78,040.00, on which taxable income there was owing to the United States of America an income tax of$13, He was required by law to pay, on or before April15, 2010, that income tax to the Internal Revenue Service Center, at Fresno, California, to a person assigned to receive returns at the local office of the Internal Revenue Service at Portland, Oregon, or to another Internal Revenue Service office Page 2- MISDEMEANOR INFORMATION (United States v. Karl Christian Brenneman)

3 Case 3:13-cr JO Document 1 Filed 04/05/13 Page 3 of 7 Page ID#: 3 permitted by the Commissioner of the Internal Revenue. Well knowing all the foregoing, he did willfully fail, on April 15, 2010, in the District of Oregon and elsewhere, to pay the income tax due. All in violation of Title 26, United States Code, Section DATED this 0 day of April, Respectfully Submitted, S. AMANDA MARSHALL United States Attorney District of Oregon ~~~.a~~ 9 LESLIE A. GOEM T Trial Attorney Department of Justice, Tax Division TO~ Trial Attorney Department of Justice, Tax Division Page 3- MISDEMEANOR INFORMATION (United States v. Karl Christian Brenneman)

4 Case 3:13-cr JO Document 1 Filed 04/05/13 Page 4 of 7 Page ID#: 4 DAVID I. SLAFSKY Multnomah County, Portland, Oregon ) ) ) ss. I, David Slafsky, being first duly sworn, hereby depose and state as follows: Background I. I am a Special Agent of the Internal Revenue Service- Criminal Investigation, and I have been employed by IRS-CI for four years. My current assignment is to the Portland, Oregon post of duty. My training and experience includes conducting or being involved in investigations of alleged criminal violations, which have included: the filing of false claims and conspiracy to file false claims (Title I8, USC 286 and 287); income tax evasion (Title 26, USC 7201); money laundering (Title I8 USC I956 and I957), and wire fraud (Title I8 USC 1343). I attended six months of training at the Federal Law Enforcement Training Center where I studied criminal law, financial crimes, tax law and the execution of search warrants. I receive updates on current criminal tax law and investigative techniques on a yearly basis. 2. I make this affidavit based upon my personal knowledge, from information obtained during my investigation, and from my training and experience. This affidavit is submitted in support of an arrest warrant for Karl Christian Brenneman (herein BRENNEMAN). 3. For the reasons contained herein, I have probable cause to believe that there is evidence of a violation of26 U.S.C (Willful failure to pay taxes), by BRENNEMAN. 4. The attached criminal information will be filed on April 5, 2013 in the District of Oregon charging BRENNEMAN with three counts of Failure to Pay under 26 U.S.C Applicable Statutes 5. Title 26, United States Code, Section 7203, provides that any person who is required to pay a tax and willfully fails to pay such tax, at the time required by law, shall be guilty of a misdemeanor and be fined not more than $25,000 or imprisoned not more than I year, or both. Factual Basis for Arrest Warrant 6. On or about April 7, 20 I 0, I spoke to Bryan Howe, the owner of Sente, Inc. Howe indicated that while BRENNEMAN had been employed by Howe, from 2006 through 2009, BRENNEMAN had earned nearly $600,000 in wages and had not had federal income taxes withheld from AFFIDAVIT OF DAVID SlAFSKY 1

5 Case 3:13-cr JO Document 1 Filed 04/05/13 Page 5 of 7 Page ID#: 5 his pay during the same period. Howe stated BRENNEMAN had claimed nine exemptions on his Form W-4, which exempted him from having taxes withheld. Howe provided several documents including BRENNEMAN's payroll records and Forms W-2 for 2007 and I later caused a query of the Internal Revenue Service, Integrated Data Retrieval System, and found that BRENNEMAN had filed tax returns, under the Married Filing Separate filing status for each of the years 2007,2008 and Each of these years had an outstanding balance due, totaling $185, According to a query of the Integrated Data Retrieval System, BRENNEMAN has made three payments on his outstanding balance: $ on December 22,2008, $ on January 27, 2009, and $ on April27, No payments have posted to BRENNEMAN's account since April 27, I then requested copies of BRENNEMAN's tax returns for and found that attached to the tax returns were copies of Forms W-2 showing no withholding for payment of federal income tax during this period. These tax returns were designated as "self prepared" and showed the following tax due amounts: a $67, b $59, c $13, On or about September 13,2010, I interviewed BRENNEMAN pursuant to my investigation. During the interview, BRENNEMAN stated he had no tax withheld from his earnings at Sente, Inc. so that he could repay $192, in court ordered restitution from a 2006 felony mail fraud conviction. BRENNEMAN provided no reason as to why his taxes had not been paid and stated he would "eventually" pay his taxes. 10. Additionally, during this investigation, I conducted a bank deposits analysis ofthe US Bank account held jointly by BRENNEMAN and his wife and retained documentation from Automatic Data Processing, the payroll processor for Sente, Inc., relative to BRENNEMAN's wages. This analysis and documentation confirmed that, from January I, 2007 through July 9, 2009, BRENNEMAN received 66 checks from Sente, Inc. totaling $503,355.01, and from which no withholding was made for the payment of federal income tax. AFFIDAVIT OF DAVID SLAFSKY 2

6 Case 3:13-cr JO Document 1 Filed 04/05/13 Page 6 of 7 Page ID#: I also know that on or about February 19, 2008, Ellisa Brenneman opened a Scottrade trading account held exclusively in her name. Until January 11, 20 I 0, after the filing of both BRENNEMAN's 2007 and 2008 tax return, the only source of deposits to this account was the US Bank account held jointly by BRENNEMAN and his wife. The US Bank account was funded almost exclusively by the deposits of BRENNEMAN's Sente, Inc. payroll checks. I2. I believe BRENNEMAN was aware of his tax liability and his requirement to pay that liability for several reasons: a. BRENNEMAN and his wife, Ellisa, filed a 2006 income tax return under the Married Filing Jointly status. Filed with this return was a Form W-2 from Sente, Inc. which showed no withholding to pay federal income tax. The 2006 tax return showed a tax due amount of $2,8Il.OO, which was paid in full. b. BRENNEMAN filed tax returns for the years 2006 through Each tax return showed a tax due and was designated as self prepared. c. On or about August 9, 2007 during a meeting with his Probation Officer, Eileen Groshong, BRENNEMAN stated he would be paying his taxes at the end of the year in a lump sum. d. On or about October I6, 2008, BRENNEMAN filed an Oregon Form 40, under the Married Filing Separate filing status. A check for $19,500 was written to the Oregon Department of Revenue for payment of the tax due amount. 13. I further believe that BRENNEMAN had the means to pay all or part of his tax liability and failed to do so: a. BRENNEMAN's 2007 tax return was filed with the IRS on October I6, 2008 and showed a tax due amount of$67, On November I, 2008, the balance ofthe Scottrade account held in Ellisa Brenneman's name was $107, b. BRENNEMAN's 2008 tax return was filed with the IRS on October I5, 2009 and showed a tax due amount of$59, On November I, 2009, the balance of the Scottrade account was $89, c. On either occasion, BRENNEMAN had access to funds in the Scottrade account, which originally came from his untaxed income, and which were not used to pay his tax liability. AFFIDAVIT OF DAVID SLAFSKY 3

7 Case 3:13-cr JO Document 1 Filed 04/05/13 Page 7 of 7 Page ID#: I know that BRENNEMAN'S wife, Ellisa, is a Canadian citizen. I also know that, during the pendency of the prior investigation into mail fraud violations involving BRENNEMAN, he retained the services ofhoevet, Boise & Olson, P.C., a Portland, Oregon based law firm. When notified by his attorney that he had been indicted for mail fraud, BRENNEMAN was in Vancouver, BC, and indicated to his attorney that he did not intend to return to the United States. 15. I also know that BRENNEMAN and his wife, Ellisa, left Oregon after abruptly closing their company, firing their employees, and retaining payment from clients who had not, as yet, received services. 16. From on or about November 2013 through April 1, 2013, I was not able to locate Elissa or BRENNEMAN. 17. On or about April 1, 2013, IRS-CI identified a mailbox at 1319 Military Cutoff Road, Suite CC, Wilmington, North Carolina, related to Ellisa in an Accurint report. I contacted IRS-CI Special Agent Michael Giankoulous in Wilmington, North Carolina who made contact with the manager of the location where the mailbox was located. The manager stated to Agent Giankoulous that either BRENNEMAN or Ellisa was picking up mail on an almost daily basis. The manager offered to place a phone call to Elissa and BRENNEMAN to attempt to determine their current address. The manager told Agent Kiankoulous that she spoke to Elissa who stated that she was currently in Canada, that Karl BRENNEMAN would be joining her in Canada, and that they would be closing down the mailbox as they did not want Karl BRENNEMAN's mother picking up the mail for them. She provided a Canadian mailing address and a credit card for final payment. 18. Based on the foregoing information, I have probable cause to believe that violations of U.S.C (Willful failure to pay taxes) have been committed by Karl Christian BRENNEMA and that BRENNEMAN has the means and propensity to flee. Subscribed to before me this S day of April, The Honorable Ancer L.Ha~~ United States District Court Judge AFFIDAVIT OF DAVID SLAFSKY 4