CRIMINAL CHARGE PURSUED AGAINST OHIO TAX PREPARER FOR VIOLATING COURT INJUNCTION

Court Had Ordered Him To Stop Preparing Tax Returns For Clients

WASHINGTON, D.C.-Eileen J. O’Connor, Assistant Attorney General for the Tax Division, United States Department of Justice, and Gregory G. Lockhart, United States Attorney for the Southern District of Ohio, announced today the government has requested a court order requiring Robert C. Welti to show cause regarding why he should not be held in criminal contempt of court.

The government’s motion alleges that Mr. Welti violated a preliminary injunction order entered against him by the United States District Court in Cincinnati, Ohio. The injunction order, entered February 14, 2003, prohibited Mr. Welti from preparing or helping to prepare federal income tax returns or other documents to be filed with the IRS, from making false and fraudulent statements regarding the reporting of income, and from engaging in other similar conduct substantially interfering with the proper administration and enforcement of the internal revenue laws. Evidence offered in support of the government’s request for the injunctions established that Mr. Welti had prepared fraudulent returns that understated income and tax based on sham trusts developed by the Aegis Company. On September 25, 2003, the court issued a permanent injunction barring Mr. Welti from preparing tax returns or representing clients.

The government’s motion alleges that after the injunction order was entered, Mr. Welti continued to prepare income tax returns and income tax extension forms for his clients to submit to the IRS. The motion also alleges Mr. Welti submitted letters to the IRS challenging its authority to conduct audits and collect taxes, and prepared letters making similar claims for his clients to submit to the IRS.

Mr. Welti is the third tax return preparer this month against whom the Tax Division has sought criminal sanctions for violating an injunction. The injunctions in this case were obtained by attorneys from the Department of Justice’s Tax Division, following an investigation conducted by the Internal Revenue Service’s Small Business/Self Employed Division. Information about the preliminary injunction Mr. Welti allegedly violated may be found at http://www.usdoj.gov/tax/txdv03094.htm. Information about the permanent injunction may be found at http://www.usdoj.gov/tax/txdv03525.htm

If convicted, the punishment for contempt of court (18 U.S.C. § 401) is a fine or imprisonment, or both, at the discretion of the court.

The conduct described in the Government’s motion is only an allegation. In the American justice system, a person is presumed innocent until he or she is proven guilty in a court of law.

Additional information about the Justice Department’s Tax Division and its enforcement efforts may be found at www.usdoj.gov/tax <http://www.usdoj.gov/tax>.

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