A Chapel Hill and Durham, North Carolina, millionaire businessman was sentenced to prison yesterday for his involvement in a decades-long scheme to evade paying his federal income taxes, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and U.S. Attorney Ripley Rand of the Middle District of North Carolina.
“The sentence imposed on Mr. Tilley demonstrates the department’s commitment to prosecuting and seeking incarceration of and restitution from those who repeatedly evade their tax obligations and impede and obstruct our nation’s tax laws,” said Acting Assistant Attorney General Ciraolo. “No one is above the law and Mr. Tilley will pay a heavy price for his criminal conduct.”
Thomas Tilley, 80, was sentenced by Chief U.S. District Judge William L. Osteen Jr. of the Middle District of North Carolina to serve 32 months in prison to be followed by one year of supervised release, and ordered to pay $7,676,757 in restitution to the Internal Revenue Service (IRS). At the sentencing hearing, Judge Osteen found that Tilley obstructed justice by providing misleading information to probation and the court after pleading guilty and revoked his acceptance of responsibility credit based on this conduct. Tilley pleaded guilty on Nov. 21, 2014, to one count of corruptly endeavoring to impede and obstruct the administration of the Internal Revenue Code, which carries a statutory maximum sentence of 36 months in prison.
“Individuals like Thomas Tilley, who engage in complex schemes to impede the administration of the tax laws in order to enrich themselves and not pay their fair share, should take notice of today’s sentencing,” said Special Agent in Charge Thomas J. Holloman III of IRS-Criminal Investigation (CI). “If you engage in these type of schemes, IRS-Criminal Investigation will be there for the duration to ensure that you are brought to justice.”
According to court documents, beginning in 1993 and continuing through at least 2010, Tilley sent the IRS fraudulent financial instruments in an attempt to fraudulently discharge his tax debt; used nominee and sham trusts to purchase and sell real estate to conceal his assets; and placed false liens on properties to impede the IRS’ collection of his tax debt. Tilley also failed to file federal and state income tax returns for tax years 1994 through 2013, despite earning substantial income and, in 2009, claiming a net worth as high as $30 million and annual income of $822,000 on a financial statement.
Acting Assistant Attorney General Ciraolo commended special agents of IRS-CI, who investigated the case, and Assistant U.S. Attorney Frank J. Chut of the Middle District of North Carolina and Trial Attorney Todd P. Kostyshak of the Tax Division, who prosecuted the case, according to The US Department Of Justice.