WILMINGTON, NC (WWAY) — A Wilmington seafood distributor pleaded guilty today to federal tax evasion, according to the US Justice Department and the IRS.
Prosecutors say Jeffrey Wayne Scott, 48, admitted to one count of willfully attempting to evade his personal income tax. He faces up to five years in prison and a maximum $250,000 fine. A grand jury indicted him last year for five counts of personal income tax evasion and one count of filing a false corporate tax return.
“Today is a difficult day for Jeff Scott and his family,” Scott’s attorney Edwin West III said in an e-mailed statement. “There are two sides to every story, but Jeff looks forward to putting this behind him. He has filed amended tax returns and he has paid the taxes his accountant determined he owed the IRS.
“The Scotts are very grateful for the love and support of their family, friends, customers and business associates. Greenville Loop Seafood is open for business and looks forward to a successful summer season.”
According to court documents and proceedings, Scott has owned and operated Greenville Loop Seafood, a seafood distribution company in Wilmington, since 1995. For tax years 2006 through 2010, investigators say Scott and his wife filed joint individual income tax returns. Scott provided his return preparer with handwritten summaries of gross receipts and categorized expense items for the wholesale and retail fish distribution businesses as well as tax documents provided by financial institutions. Scott, under penalty of perjury, reported that his taxable income for these five years ranged between $23,934 and $92,999, and paid only $91,800 in federal income taxes for this time period. During these five years, however, the Scotts spent far in excess of this reported taxable income on personal expenditures.
According to court documents and court proceedings, between 2006 and 2010, the Scotts paid for nearly all of their living expenses with checks from GLS. This included, among other things, utilities, insurance premiums, landscaping, home improvements, school fees and a country club membership. They also purchased five vehicles totaling more than $200,000, a $100,000 boat and a $2.1 million waterfront home. Scott also made a monthly transfer of $10,000 from GLS’ business account into a personal brokerage account. After the purchase of their home in June 2009, Scott stopped transferring funds to the brokerage account, but instead used funds from GLS’ business account to pay the mortgage and related expenses. Through a bank deposit and expenditure analysis, the IRS calculated that Scott failed to report taxable income for these five years in excess of $1,151,642 and owed at least $390,678 in additional taxes. For the 2007 tax year, Scott failed to report $328,754 in taxable income with an additional tax due and owing of $113,967.
According to court documents and court proceedings, when first contacted by IRS-Criminal Investigation agents in June 2011, Scott falsely stated that he was letting friends stay in his second home rent free. Furthermore, despite being aware that he was under criminal investigation, in November 2012, Scott filed a false 2011 GLS corporate income tax return claiming the painting of his personal residence, repair work by a plumber at his personal residence, and health bills related to his family dog as business expenses.