CONTACT: Paul O'Brien
United States Attorney
William M. Cohen
Assistant U.S. Attorney
Michael Boteler
Trial Attorney
U.S. Department of Justice, Tax Division
Texas Resident Pleads Guilty to Tax Conspiracy
Nashville , TN – August 16, 2007 – Paul O'Brien, United States Attorney for the Middle District of Tennessee, announced that Michael Ray, of Pearland, Texas, pled guilty on August 13, 2007, before U.S. District Judge Aleta A. Trauger, to conspiracy to defraud the United States. Ray is scheduled to be sentenced on December 17, 2007.
According to the factual statement given at the time of Ray’s plea, Ray operated Tender Loving Nurses (TLN), a Houston, Texas based partnership which sold nursing services to hospitals. In 2000, Ray contacted Susan Sperl, his tax return preparer located in Kingston Springs, Tennessee, to discuss ways to reduce his tax liability. Sperl met with Ray, and told him he could write checks to her for accounting services. Sperl said she would then loan the funds back to him. Sperl said this would give Ray what would appear to be a legitimate tax deduction. Sperl was to receive a fee for her services. Ray knew it was wrong to participate in this arrangement, but decided to proceed because he did not think the IRS could prove the arrangement was illegal.
On November 20, 2000, Ray wrote a check on TLN’s bank account payable to Susan Sperl in the amount of $140,000. Following Sperl’s instructions, he wrote “Legal & Accounting Fees” in the memo portion of the check to disguise the check as a legitimate business expense. Ray then accompanied Sperl to a bank. Sperl used the TLN check to purchase a $140,000 cashier’s check payable to TLN, with a notation “Susan Sperl Bank Loan” in the memo portion of the check. Sperl gave the cashier’s check to Ray.
On November 22, 2000, Ray wrote a TLN check in the amount of $100,000 payable to Susan’s Tax, Sperl’s company. Following Sperl’s instructions, Ray wrote “Accounting/Legal Fees” in the memo portion of the check. Sperl took this check and deposited it into her bank account. On the same date, Sperl gave Ray three sequentially numbered checks, each in the amount of $33,000, made payable to TLN. The checks were written as “Investment Loan #1,” “Invest Loan #2,” and “Invest Loan #3,” respectively, thus making it appear that Sperl had loaned money to TLN. Sperl also provided Ray an invoice from Susan’s Tax in the amount of $100,000 for tax preparation services even though such services had not been performed.
Ray filed a partnership return for TLN for calendar year 2000 which claimed a retirement plan deduction in the amount of $240,000. Ray also filed a personal income tax return for calendar year 2000 that under-reported the income he received from TLN by $120,000. The false deduction also caused Ray’s partner’s income from the TLN partnership to be under-reported by the same amount. The actions of Ray and Sperl created a tax loss to the government of approximately $83,339.
Susan Sperl has been indicted and is awaiting trial. An indictment is no evidence of guilt, and Sperl is presumed innocent.
This investigation was conducted by IRS Criminal Investigation. Assistant U.S. Attorney William M. Cohen and Michael Boteler of the U.S. Department of Justice, Tax Division, represented the United States in this case.