Mother & daughter sentenced for income tax evasion of more than $3.7 million

COLUMBUS, OH (STL.News) Theresa R, Gregory, 67, of Mount Vernon, Ohio, was sentenced to 36 months of imprisonment for evading the assessment and payment of incomes taxes due to the Internal Revenue Service (IRS). Gregory pleaded guilty to the aforementioned charges on Aug. 28, 2020.

Tera L. Gore, 44, of Croton, Ohio was sentenced to six months of imprisonment to be followed by 12 months of home confinement on the same charges.  Gore also pleaded guilty on Aug. 28, 2020.

As part of their sentences, Gregory and Gore were ordered to pay $3.3 million in restitution.  Gregory was also ordered to pay a $20,000 fine.

According to court documents, between January 2008 and December 2017, Theresa Gregory and her daughter, Tera Gore, evaded the assessment and payment of income taxes owed to the IRS by Gregory.  As Gregory earned millions of dollars annually, Gregory and Gore worked together to hide Gregory’s income and assets.  They also falsified documents to help Gregory purchase a second home in Florida, including a bank statement that claimed a bank account held nearly $2 million more than it actually held.

Since the 1990’s, Gregory has earned income from multi-level marketing companies.  As a distributor, Gregory earned commissions and bonuses based on the volume of products she sold, as well as the volume of products sold by other individual’s she recruited to be part of her distributor network.  By 2012, Gregory’s annual income exceeded $900,000.  In each subsequent year, Gregory’s annual income exceeded $1 million, and in at least one year exceeded $4.5 million.  Between January 2009 through December 2017, Gregory earned approximately $17,498,680.55 in gross income from the multi­ level marketing companies.

Despite this substantial amount of income, according to IRS records, Gregory failed to voluntarily file personal income tax returns and has paid no personal income taxes (other than Form W-2 withholdings) for over 20 years, even though she had an annual obligation to do so.  Dating back to at least 1993, Gregory has been the subject of several IRS civil examination and collection proceedings.  During this period, in furtherance of its examination and collection efforts, the IRS conducted audits, filed substitutes for return, and filed tax liens.  The IRS also notified Gregory of her ongoing obligation to file tax returns for more recent years . Gore knew that Gregory owed a substantial amount of money for her personal taxes.

Gregory and Gore worked together to conceal Gregory’s income and assets from the IRS.  Gregory and Gore systematically moved assets, including businesses and bank accounts, out of Gregory’s name and into Gore’s name.  Gregory and Gore directed income owed to Gregory to entities and accounts nominally in the control of Gore.  Gregory and Gore took these steps so that IRS records would not link the income or assets to Gregory and did so with the intent to evade the payment and assessment of taxes.

Gregory retained personal control of the funds received from the multi-level marketing companies.  She spent the funds on lavish personal expenses, including home furnishings and home improvements, at high-end retailers such as Louis Vuitton, Jimmy Choo, Saks Fifth Avenue and Nordstrom, on cruises, horse dealers, quarter horse events, custom horse show clothing, gifts for Gore and other family members, mortgage payments on a house in Florida and at various automotive dealerships.

Gore benefitted from her criminal actions through gifts from Gregory.  Gore had bank cards for the bank accounts in her name, and she used them for a substantial amount of personal expenses for herself and her family.  Gregory also authorized the use of funds to purchase and subsidize a feed store, and to purchase and subsidize the operation of an equestrian training center and wedding venue that Gore operated.  Gregory also authorized the use of funds to pay a private tutor and horse trainers for Gore’s daughter, and for other individuals who provided personal services to Gore.

Gregory and Gore also worked together to alter, falsify, forge, and fabricate financial and other business documents relative to Gregory’s purchase of a second home in Grand Island, Florida, for $1,115,000.  Gregory financed a portion of the purchase with a seller-backed mortgage to avoid any requirement to disclose tax returns in making the purchase, and in furtherance of her scheme to evade taxes.  Gregory provided documents to the real estate agent, representing that she had sufficient funds to buy the house.  The documents included a business bank account statement representing that the account contained $1,900,003.21.  In truth, the bank account contained only $3.21.  Gregory and Gore worked together to alter, falsify, forge and fabricate the documents and provide them to the real estate agent.  Following the false representations, Gregory closed on the purchase of the house.

The combined total tax loss for the 1998 through 2006, 2008, and 2014 through 2017 income tax years was $3,759,889.11.

“Theresa Gregory earned millions of dollars of income, but she did not file an income tax return for over 20 years,” said Bryant Jackson, Special Agent in Charge, IRS Criminal Investigation, Cincinnati Field Office. “Gregory and Gore went to great lengths to hide funds from the IRS and evade paying their fair share of taxes.”

David M. DeVillers, United States Attorney for the Southern District of Ohio and Bryant Jackson, Special Agent in Charge, Internal Revenue Service Criminal Investigation, Cincinnati Field Office, announced the sentenced handed down by Chief U.S. District Judge Algenon L. Marbley.

This case is being prosecuted by Assistant United States Attorney Peter K. Glenn-Applegate and was investigated by special agents of IRS-Criminal Investigation.

SOURCE: USDOJ.Today

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