NEWS RELEASE
UNITED STATES ATTORNEY'S OFFICE
WESTERN DISTRICT OF VIRGINIA
John L. Brownlee
United States Attorney
Patricia A. Grisetti
Media Contact
Thomas B. Mason Building
105 Franklin Rd., S.W.
Roanoke, Virginia 24011
(540) 857-2250
FAX (540) 857-2180
June 3, 2003
Clinchco Man Sentenced to 24 Months in Tax Refund Scheme
United States Attorney John L. Brownlee announced today that KIM A. PRATER, 41, formerly of Clinchco, was sentenced in United States District Court in Abingdon, to serve 24 months in prison, followed by three years of supervised release. In addition, PRATER was ordered to pay more than $27,000 in restitution and $1,000 in special assessments for his role in a scheme to generate false income tax refunds.
PRATER was convicted June 27, 2001, after a three-day jury trial, of ten counts of filing false claims for tax refunds during 1997 and 1998. According to evidence presented during the trial and in court proceedings, PRATER and accountant DONALD R. HILL, 60, Abingdon, conspired to prepare false W-2 forms and false tax returns to claim tax refunds for PRATER and individuals identified as employees of PRATER's restaurant businesses. PRATER, who owned and operated the Union Station restaurants in Clintwood and Clinchco, and Bushwacker's/Club 83 in Haysi during 1996 and 1997, and HILL, a UVA-Wise assistant accounting professor, caused the filing of as many as 20 tax returns claiming refunds of false tax withholdings and falsely claiming the earned income credit, which substantially increased the amount of the refunds claimed. Refunds obtained from the IRS and from banks via the rapid refund program were split by PRATER, HILL, and the individual employees. More than $70,000 in false refund claims were submitted resulting in refund payments of more than $39,000.
HILL pled guilty May 16 to conspiracy for his role in the scheme and faces a statutory maximum sentence of five years in prison, a fine of up to $250,000, and payment of restitution when he is sentenced August 5.
The investigation of the case was conducted by Bristol Office of the Internal Revenue Service's Criminal Investigation Division. Assistant United States Attorney Rick Mountcastle and Department of Justice Tax Division Attorney Gregory Tortella were the prosecutors. For further information, please contact AUSA Mountcastle at 276-628-4161.