United States Attorney Leura G. Canary Middle District of Alabama

LOCAL BUSINESS OWNER CONVICTED OF CONSPIRACY AND OBSTRUCTING THE FUNCTIONS OF THE INTERNAL REVENUE SERVICE

MONTGOMERY, ALABAMA— Leura G. Canary, United States Attorney for the Middle District of Alabama, announced that on January 12, 2007, a jury convicted Eugene L. Cleckler (“Eugene”), age 69, of Clanton, on both counts of a two-count indictment charging conspiracy, in violation of Title 18, United States Code, Section 371, and obstructing the functions of the Internal Revenue Service, and Title 26, United States Code, Section 7212(a). Kim Cleckler (“Kim”), age 42, was charged in the same indictment and found not guilty.

According to the indictment and other court documents, Eugene and Kim are father and son, and were equal partners in Gene’s Marine Sales (“Gene’s”), a boat dealer in Clanton. Eugene was also the 100% owner of Ezy-Ryder, Inc. (“Ezy”), which was also in the boat business. Because Gene’s was a partnership, the individual partners–Eugene and Kim–paid the taxes on its income.

Beginning in 1996, the IRS began auditing Gene’s, Ezy, Eugene, and Kim for the tax years 1994 and 1995.

Beginning in November 1996, at the direction of Eugene, a Gene’s employee created fictitious documents that purported to show amounts that Gene’s had either paid to or owed to its suppliers. Gene’s presented to the IRS a summary of these false documents, which made it appear as if Gene’s expenses were $525,000 greater that they actually were for 1994 and 1995.

Between May and November 2000, at the direction of Eugene, Gene’s employees created fictitious documents that falsely showed that revenue that had in fact been earned by Gene’s was earned by Ezy. This was advantageous to Eugene and Kim because (a) Ezy’s losses would have offset the revenue, and (b) as a corporation, only Ezy, rather than Kim and Eugene, would have owed any additional taxes. On the other hand, if the IRS concluded that Gene’s had earned the revenue, Gene’s income, and therefore Eugene and Kim’s taxes, would have increased substantially. Eugene caused these fictitious documents to be submitted to the IRS between August 2000 and November 2000.

When he is sentenced this Spring by United States District Judge William K. Watkins, Eugene faces a statutory maximum penalty of 8 years imprisonment, a fine of $500,000 or twice the amount of loss to the IRS, and an order of restitution. Eugene is free on a $25,000 unsecured bond until sentencing which is set for April 10, 2007, at 10:15 a.m..

The case was investigated by the IRS’s Criminal Investigation Division. The case was prosecuted by Assistant U.S. Attorneys Andrew O. Schiff and Christopher A. Snyder.