Tax Fraud Emergency

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A clock with tax time sticky note and calculator on the desk.

Here’s some important advice: if you owe the Internal Revenue Service (IRS), pay up without delay. In hindsight, Dr. Kevin L. Crandell of Golden, Miss., probably wishes he had not skipped paying his personal income taxes over multiple years. (Nearly $1 million in back taxes has a way of catching up with you.)

Dr. Crandell was an emergency room physician who made a monthly salary of between $30,000 and $40,000. (That’s a huge salary. Seems like he could have set aside some of those dollars to pay Uncle Sam.) Between 2006 and 2012, Crandell accrued approximately $972,493 in tax debt including penalties and interest, because he failed to pay his personal income taxes over several years. (You could say that the doctor had a tax fraud emergency.)

During a three-day jury trial in Oxford, the Government presented evidence that Crandell submitted a false IRS Form 433-A hoping that the IRS would negotiate a payment plan for his outstanding tax liabilities. The form misrepresented that Crandell was unable to pay his taxes because his personal income was lower than his expenses. (Crandell neglected to list his assets and business bank accounts, which he was using for personal expenses. So, it looked like he didn’t have any money to pay his bills.)

In 2010, Crandell hired a tax resolution service to help him fix the delinquent tax problem. (He blamed the tax resolution company for his situation.) Trial evidence proved that Crandell intentionally manipulated his pay stubs to show a decrease in his 2014 annual income before submitting those pay stubs to the tax resolution service. (When you point the finger at someone else, remember that there are three other fingers pointing right back at you.)

Crandell was convicted of tax evasion and is scheduled to be sentenced in June. He faces a maximum sentence of five years in prison, a period of supervised release, restitution, and a fine. (Let’s hope that Dr. Crandell was better at treating his patients than managing his money, but I’m not betting on it.)

Today’s Fraud of the Day comes from a Department of Justice press release, “Emergency Room Doctor Convicted of Tax Evasion,” dated March 4, 2022.

Oxford, Miss. – A federal jury convicted a Mississippi man of tax evasion after a three-day jury trial in Oxford this week before District Judge Sharion Aycock.  According to the indictment and evidence presented at trial, Dr. Kevin L. Crandell of Golden, Mississippi, was an emergency room physician making a monthly salary of approximately $30,000 to $40,000 who stopped paying personal income taxes in 2007. During the years 2006 through 2012, Crandell accrued approximately $972,493 in tax debt, including penalties and interest.

At trial, the Government presented evidence that in 2014 Crandell submitted a false and fraudulent IRS Form 433-A to the Internal Revenue Service in an attempt to negotiate a payment plan for his outstanding tax liabilities. The Form 433-A misrepresented to the IRS that Crandell could not make tax payments because his personal income was lower than his expenses. The Form 433-A also failed to list assets and business bank accounts, which Crandell was using for personal expenses. Though Crandell attempted to blame a tax resolution service he hired in 2010, the evidence at trial showed that Crandell intentionally manipulated his pay stubs to show a decrease in his 2014 annual income before submitting the pay stubs to the tax resolution service.

 

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Larry Benson, Senior Director of Strategic Alliances, LexisNexis Risk Solutions - Government

Larry Benson is responsible for developing strategic partnerships and solutions for the government vertical. His expertise focuses on how government programs are defrauded by criminal groups, and the approaches necessary to prevent them from succeeding.

Mr. Benson has 30 years of experience in sales and business development. Before joining LexisNexis® Risk Solutions, he spent 12 years founding and managing two software technology startups. During the 1990s he spent 10 years as a Regional Director helping to grow a New England-based technology company from 300 employees to 7,000. He started his career with Martin Marietta Aerospace working on laser guided weapons and day/night vision systems.

A sought-after speaker and accomplished writer, Mr. Benson is the principal author of “Fraud of the Day,” a website dedicated to educating government officials about how criminals are defrauding government programs. He has co-authored WTF? Where’s the Fraud? How to Unmask and Stop Identity Fraud’s Drain on Our Government, and Data Personified, How Fraud is Changing the Meaning of Identity.

Benson holds a Bachelor of Science in Physics from Albright College, and earned two graduate degrees – a Master of Business Administration from Florida Institute of Technology, and a Master of Science in Engineering from Lehigh University.