February 7, 12

NEWS / Californian Sentenced to Five Years in Prison for Evading More Than $150,000 in Taxes

William H. Nurick, of Camarillo, Cal., was sentenced to 60 months in prison and ordered to pay $286,443 in restitution by U.S. District Judge Dale S. Fischer in Los Angeles, the Justice Department and Internal Revenue Service (IRS) announced today. On September 14, 2011, Nurick was convicted of evading the payment of more than $150,000 in taxes following a five-day jury trial.

Nurick’s conviction arises from his involvement with the Genesis Fund. According to evidence presented at trial and summarized in the government’s sentencing memorandum, the Genesis Fund was an investment fund that operated from approximately 1994 through 2002. Genesis Fund literature described foreign currency trading as the principal activity of the fund. The evidence at trial proved that Nurick received approximately $1.1 million in distributions from the Genesis Fund between 1995 and 2002. During this time, he used eight different entities to conceal his control over bank accounts, vehicles, and real property.

The evidence at trial further demonstrated that in May 2000, Nurick filed an amended 1995 individual income tax return admitting he owed $106,542 related to his investment in the Genesis Fund. Thereafter, Nurick deliberately and systematically attempted to conceal assets between May 2000 and April 2001 in order to evade payment of the balance owed to the IRS for his 1995 income taxes. Following a notice of balance due from the IRS, Nurick transferred approximately $133,000 from an offshore bank account that he controlled to a witness’s offshore bank account. Nurick also submitted a false “Offer in Compromise” to the IRS, offering to pay less than one tenth of his outstanding debt. Nurick’s Offer in Compromise, signed under penalties of perjury, falsely understated his net worth and income, and failed to indicate a bank account in Costa Rica with a balance in excess of $200,000, which consisted primarily of distributions he had received from the Genesis Fund. Nurick also falsely claimed on this document that he would receive no further distributions from the Genesis Fund, when in fact, he received over $350,000 from it through distributions to multiple entities that he controlled.

Of the nine defendants originally charged in this case, eight defendants pleaded guilty to charges including tax fraud, obstruction of justice, and securities violations. Judge Fischer sentenced many of the defendants to significant prison terms and ordered restitution payments totaling millions of dollars. The last of the eight guilty pleas was entered in court on December 12, 2011, by defendant Marlyn D. Hinders. Hinders was a fugitive until June 2011 when he was deported from Mexico and arrested by the United States Marshal’s Service. After a detention hearing in July 2011, Judge Fischer ordered Hinders held without bond pending trial. Hinders, formerly a resident of Colorado, pleaded guilty to tax fraud and is scheduled to be sentenced on April 2, 2012.

This complex fraud case was investigated by special agents of the IRS - Criminal Investigation in Laguna Niguel and prosecuted by Trial Attorneys Lori A. Hendrickson, Matthew J. Kluge, Ellen M. Quattrucci, and Danny N. Roetzel of the Justice Department’s Tax Division, with the assistance of the United States Attorney’s Office in Los Angeles.

http://www.justice.gov/opa/pr/2012/February/12-tax-169.html

Tags: document, criminal investigation,