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Home > Blogs > Dayton Courts: Legal and crime news > Archives > 2012 > January > 05 > Entry
North Carolina man ordered to pay restitution to IRS for Dayton-based swindle
DAYTON — A North Carolina man who invested in real estate in the Dayton area was placed on five years probation Thursday and ordered to pay $85,600 in restitution to the Internal Revenue Service.
John Michael Robbins, 44, of Charlotte, appeared before U.S. District Judge Timothy S. Black at the Dayton federal building. Black also ordered Robbins to complete 200 hours of community service.
Robbins pleaded guilty Sept. 15 to one count of willfully filing a fraudulent federal tax return.
Between 2003 and 2007, Robbins had a real estate business and purchased Dayton-area properties, rehabilitated them, then sold them, according to court documents.
Robbins and other un-indicted business partners found buyers for these properties and provided the down payment funds for the buyers. Robbins and others had the buyers sign independent contractor agreements stating that the buyers had performed some of the rehabilitative work on the properties, and therefore legitimately earned the down payment funds, according to court documents.
In 2005 and 2006, Robbins and others prepared false Forms 1099 for those buyers, even though Robbins knew the buyers never performed work on the properties. Ultimately, Robbins was reimbursed the down payment funds that he provided during the closings of these properties, according to court documents.
During 2005 and 2006, Robbins claimed the independent contractor amounts (the amounts from the false Forms 1099’s) as a business expense on the Schedule C (Profit of Loss from Business) of his Individual Income tax returns, even though Robbins had already been reimbursed for these amounts, according to court documents.
For the 2005 and 2006 income tax years, Robbins claimed false business expenses in the amount of $277,662.99; therefore causing a total tax loss to the IRS of $85,606.
“Tax violations have been erroneously referred to as victimless crimes, but it’s the honest law abiding citizen who is harmed when someone tries to manipulate our nation’s tax system,” said Darryl Williams, Special Agent in Charge, IRS, Criminal Investigation, Cincinnati Field Office.
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