November 17, 2004

PRESS RELEASE

FORMER CAPE COD PHYSICIAN SENTENCED ON TAX CHARGES

Boston, MA... A former Centerville physician was sentenced in federal court yesterday in connection with tax offenses involving his failure to file individual income tax returns in 1997, 1998 and 1999 despite earning more than $800,000 in gross income during those years.

United States Attorney Michael J. Sullivan and Joseph A. Galasso, Special Agent in Charge of the U.S. Internal Revenue Service, Criminal Investigation, announced that KENNETH E. SMITH, age 59, formerly of Osterville and Centerville, Massachusetts, and currently of Hilton Head, South Carolina, was sentenced by U.S. Magistrate Judge Lawrence P. Cohen to one year in prison, to be followed by one year of supervised release.

SMITH pleaded guilty on June 15, 2004 to a three-count Information charging him with failing to file individual income tax returns in 1997, 1998 and 1999.

At the earlier plea hearing, the prosecutor told the Court that, had the case proceeded to trial, the evidence would have proven that SMITH was a physician who owned and operated a Cape Cod-based medical practice named Hyannis OB-GYN Associates, P.C. During each of the years from 1997 through 1999, SMITH received income, including income from the operations of Hyannis OB-GYN, that exceeded the minimum amount necessary to trigger a legal obligation on his part to file an individual income tax return with the IRS. The combined amount of SMITH’s gross income over the three-year period exceeded $800,000. Notwithstanding his receipt of that income, SMITH did not file tax returns timely reporting his income, nor did he pay the taxes, an approximate total of $175,000, that were due and owing on the income.

The case was investigated by the U.S. Internal Revenue Service, Criminal Investigation and was prosecuted by Assistant U.S. Attorney Michael J. Pineault in Sullivan’s Economic Crimes Unit.

Press Contact: Samantha Martin, (617) 748-3139