News
Tax
Mar. 1, 2002
False Tax Filings Put Couple Into Custody
LOS ANGELES - A Newport Coast couple has been sentenced to prison for conspiring to file false tax returns and falsely claim $1.8 million in expenses related to their Santa Ana business, Mexmil.
LOS ANGELES - A Newport Coast couple has been sentenced to prison for conspiring to file false tax returns and falsely claim $1.8 million in expenses related to their Santa Ana business, Mexmil.
Eileen J. O'Connor, assistant attorney general for the Department of Justice's Tax Division, said Michael R. Molus must serve a year and one day in prison before he goes on supervised release for three years. Carol A. Molus was sentenced to three months in a halfway house followed by three months of home confinement and three years of supervised release.
"Business owners who evade taxes by claiming fictitious business expenses not only must pay their debt to the IRS with interest and penalties, they also may pay their debt to society by spending time in prison," O'Connor said.
The pair also must pay more than $900,000 in fines and back taxes to the Internal Revenue Service.
In December 2001, Michael and Carol Molus pleaded guilty to conspiracy to file false federal individual income tax returns for the years 1991 through 1994. According to the indictment, the charges arose from the defendants' operation of the Mexmil Company, which manufactures aircraft fuselage insulation blankets in Mexicali, Mexico, to be sold to aircraft manufacturer Boeing.
The indictment alleged that from 1991 to 1994, $1.8 million of Mexmil funds were falsely reported as business expenses. The money actually was split by the Moluses and their employees for their personal use, including the purchase and decoration of a vacation home in Florida and the purchase of merchandise at Neiman Marcus, according to the indictment.
Eileen J. O'Connor, assistant attorney general for the Department of Justice's Tax Division, said Michael R. Molus must serve a year and one day in prison before he goes on supervised release for three years. Carol A. Molus was sentenced to three months in a halfway house followed by three months of home confinement and three years of supervised release.
"Business owners who evade taxes by claiming fictitious business expenses not only must pay their debt to the IRS with interest and penalties, they also may pay their debt to society by spending time in prison," O'Connor said.
The pair also must pay more than $900,000 in fines and back taxes to the Internal Revenue Service.
In December 2001, Michael and Carol Molus pleaded guilty to conspiracy to file false federal individual income tax returns for the years 1991 through 1994. According to the indictment, the charges arose from the defendants' operation of the Mexmil Company, which manufactures aircraft fuselage insulation blankets in Mexicali, Mexico, to be sold to aircraft manufacturer Boeing.
The indictment alleged that from 1991 to 1994, $1.8 million of Mexmil funds were falsely reported as business expenses. The money actually was split by the Moluses and their employees for their personal use, including the purchase and decoration of a vacation home in Florida and the purchase of merchandise at Neiman Marcus, according to the indictment.
- From Staff Reports
#337602
Staff Writer
Daily Journal Staff Writer
For reprint rights or to order a copy of your photo:
Email
Jeremy_Ellis@dailyjournal.com
for prices.
Direct dial: 213-229-5424
Send a letter to the editor:
Email: letters@dailyjournal.com