United States Attorney's Office District of Connecticut
Press Release

CALIFORNIA MAN INDICTED FOR OBSTRUCTION OF THE IRS, MAIL FRAUD AND MAKING FALSE STATEMENTS

Nora R. Dannehy, Acting United States Attorney for the District of Connecticut, today announced that a federal grand jury sitting in New Haven has returned an Indictment charging ROBERT P. PEEBLES, 67, of St. Helena, California, with one count of obstructing and impeding the due administration of the Internal Revenue laws, three counts of mail fraud, and one count of making false statements to the Internal Revenue Service.

The Indictment was returned on August 20, 2008.  PEEBLES was arrested at his home on August 26, 2008, and released on bond later that day.  Today, PEEBLES was arraigned before United States Magistrate Judge Thomas P. Smith in Hartford, at which time the Indictment was unsealed.  Jury selection has been scheduled for November 19, 2008.

The Indictment alleges that, in 1994, PEEBLES became the co-trustee of a trust formed by his aunt, Charlotte Peebles, and had a fiduciary duty to manage the funds in the best interest of the trust.  In September 2000, when his aunt was 96-years-old, PEEBLES caused his aunt’s trust to enter into a so-called private annuity agreement with a new trust formed by PEEBLES.  As part of that private annuity agreement, PEEBLES transferred about $4 million of the approximately $5 million in his aunt’s trust to his own trust in return for a promise to pay his aunt’s trust an initial payment of approximately $25,120, and an annual payment of approximately $327,486.  These payments were based on a life expectancy for Charlotte Peebles of 110.  Six months later, on February 8, 2001, Charlotte Peebles died at the age of 96.

The Indictment alleges that, as executor of his aunt’s estate, PEEBLES retained a lawyer in Connecticut to prepare the federal estate tax return and the Connecticut succession tax return on behalf of his aunt’s estate.  The Indictment alleges that, after that lawyer told PEEBLES that the private annuity would probably have to be reported on the estate’s tax returns, PEEBLES fired the lawyer.

The Indictment further alleges that, after PEEBLES fired the lawyer, he retained an accountant in Connecticut to prepare the federal and state tax returns.  Even though in the course of preparing the returns the accountant asked PEEBLES about the existence of any annuities, including private annuities, and about the existence of any transfers out of the estate, PEEBLES concealed the existence of the private annuity and the fact that he had transferred about $4 million out of his aunt’s trust less than six months before she died.  The federal estate tax return and Connecticut succession tax return were prepared and filed with the IRS and the Connecticut Department of Revenue Services without disclosing the existence of the private annuity agreement, or that approximately $4 million was transferred out of his aunt’s trust six months before she died at the age of 96.  The Indictment alleges that PEEBLES signed the federal and state tax returns at issue and declared under penalty of perjury that he had examined the returns, and that they were true, correct, and complete.

The Indictment further alleges that PEEBLES concealed the transfer of the approximately $4 million from his aunt’s trust to his trust on the Connecticut succession tax return in order to defraud the State of Connecticut out of taxes that would have been due and owing had the transfer of the $4 million been disclosed.

The Indictment also alleges that PEEBLES obstructed the audit of his aunt’s estate in 2003 and 2004 by the IRS and made false statements to IRS auditors during the course of the audit.  It is alleged that PEEBLES falsely stated to IRS officials, among other things:  (a) that he did not disclose the existence of the private annuity to his accountants in Connecticut because he was never asked about it; (b) that he was not asked by his accountants in Connecticut if any transfers had occurred in the three years preceding death from the Charlotte Peebles Trust; and (c) that the reason the private annuity was not included on the Connecticut succession tax return was that it was an “oversight.”

If convicted, PEEBLES faces a maximum term of imprisonment of 23 years and a fine of up to $1,250,000.

Acting U.S. Attorney Dannehy stressed that an indictment is only a charge and is not evidence of guilt.  The defendant is entitled to a fair trial at which it is the Government’s burden to prove guilt beyond a reasonable doubt.

This case is being investigated by the Internal Revenue Service – Criminal Investigation Division.  The case is being prosecuted by Assistant United States Attorney Eric J. Glover.

CONTACT:

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