| FOR IMMEDIATE RELEASE january 10, 2007 WWW.USDOJ.GOV/USAO/CAN |
OAKLAND – United States Attorney Kevin V. Ryan announced today that Jack Easterday, of Alameda, was charged in a superseding information with 62 additional counts, for a total of 109 counts of willful failure to truthfully account for and pay over payroll taxes owed to the government. Mr. Easterday is the owner of numerous nursing home facilities in the East Bay. These charges are the result of an investigation by the Internal Revenue Service - Criminal Investigation.
According to superseding information, filed December 8, 2006, Mr. Easterday, [51], the President of Employee Equity Administration, Inc. , and its subsidiaries and Skilled Logic , Inc. , willfully failed to pay over to the IRS federal taxes withheld from his employees from 1998 and 2005. The information alleges he failed to pay over the payroll taxes owed by the following facilities:
• Alameda Care Center a.k.a Shoreline South Intermediate Care, Inc.
• Fontana Development Corporation a.k.a. Casa Maria Convalescent
• RCC Facility, Inc. a.k.a. Rounseville Care Center
• Brookvue Care Center a.k.a. S.P. Facility, Inc.
• Eden West Convalescent Hospital a.k.a. EWCH, Inc.
• Homewood Care Center a.k.a. S.J. Facility Inc.
• Oakland Care Center a.k.a. Oak Facility, Inc.
• Pleasant View Convalescent Hospital, Inc.
• Sunrise Healthcare Center a.k.a. R.V. Facility, Inc.
• Skilled Logic Systems, Inc.
Although Mr. Easterday accounted for the withheld income by filing returns, he failed to pay over to the IRS the sum of $10,187,523.66 in taxes corresponding to the entities listed above.
Mr. Easterday was initially charged on March 11, 2005, with 47 counts of willfully failing to truthfully account for and pay over to the IRS the income taxes and Social Security taxes that he withheld from his employees. The criminal information filed in 2005 charged Mr. Easterday with failing to pay over taxes of $3,008,311 from the years 1998 to 2002. The superseding information includes additional allegations of Easterday failing to pay taxes for the years 2003 to 2005 in the amount of more than $7 million.
The initial charges resulted in a jury trial in January 2006. Evidence at trial showed that the defendant failed to pay over $18 million in payroll taxes from 1998 to 2005 and that the IRS had attempted to collect the taxes from the defendant for years before the charges were filed. However, the defendant thwarted the efforts of the IRS to collect the taxes by, among other things, paying himself and his wife exorbitant salaries and directors fees, while he was pleading poverty to the IRS collection agents.
On February 9, 2006, an Oakland jury found Mr. Easterday guilty of 47 counts of willful failure to truthfully account for and pay over payroll taxes to the government. On May 31, 2006, the judge reversed the guilty verdict citing a problem with the jury instructions.
Mr. Easterday made his initial appearance on the additional allegations today in federal court in Oakland. The defendant’s next scheduled appearance is at 2:15 p.m. today in San Francisco for a trial setting before U.S. District Court Judge Charles R. Breyer.
The maximum statutory penalty for each count of 26 U.S.C.§ 7202 is 5 years and a fine of $250,000. However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
An information contains only allegations against an individual and, as with all defendants, Mr. Easterday must be presumed innocent unless and until proven guilty.
Jay Weill and Cynthia Stier are the Assistant U.S. Attorneys who are prosecuting the case with the assistance of Kathy Tat. The prosecution is the result of a four year investigation by the Internal Revenue Service - Criminal Investigation.
A copy of this press release may be found on the U.S. Attorney’s Office’s website at www.usdoj.gov/usao/can.
Electronic court filings and further procedural and docket information are available at https://ecf.cand.uscourts.gov/cgi-bin/login.pl.
Judges’ calendars with schedules for upcoming court hearings can be viewed on the court’s website at www.cand.uscourts.gov.
All press inquiries to the U.S. Attorney’s Office should be directed to Luke Macaulay at (415) 436-6757 or by email at Luke.Macaulay@usdoj.gov.