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Businessman, Former State Senator Charged with Bank Fraud, Tax Crimes

Friday, August 17, 2018 13:42

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Information and plea agreement charge James Doyle with defrauding three banks in “check-kiting” scheme, failing to report more than $1M to IRS

PROVIDENCE, RI – The owner of two Rhode Island durable medical equipment companies has been charged in federal court in Providence with allegedly executing a “check-kiting” scheme which defrauded three banks, and with tax evasion.

Businessman and former State Senator James E. Doyle, II, 46, of Pawtucket, was charged by way of an information with thirty-one counts of bank fraud and one count each of filing a false tax return and failing to file a tax return.

Mr. Doyle resigned as a Rhode Island State Senator in January 2018.

The filing of an information and plea agreement in this matter is announced by United States Attorney Stephen G. Dambruch, Kristina O’Connell, Special Agent in Charge, Internal Revenue Service Criminal Investigation, and Harold H. Shaw, Special Agent in Charge of the FBI Boston Division.

According to court documents, it is alleged that beginning in as early as 2013, and lasting until February 2016, Doyle, as owner of Doyle Respiratory, LLC and Doyle Sleep Solutions, LLC, executed a check-kiting scheme that defrauded three banks.

“Check-kiting” consists of drawing checks on an account in one bank and depositing them in an account in a second bank when neither account has sufficient funds to cover the amounts drawn. Just before the checks are returned for payment to the first bank, the kiter covers them by depositing checks drawn on the account in the second bank. Due to the delay created by the collection of funds by one bank from the other, known as the “float” time, an artificial balance is created.

It is alleged that over three years Doyle created inflated balances in checking accounts at three banks by writing tens of thousands of checks in order to obtain funds which otherwise would not have been available to him. It is alleged that on a single day in February 2016, Doyle deposited thirty-one worthless checks totaling approximately $300,000 into one bank drawn from a checking account at a different bank. There were insufficient funds in the accounts to cover the checks.

According to court documents, Doyle defrauded the banks of between $250,000 and $550,000.

It is also alleged in court documents that in tax year 2015, Doyle and his spouse failed to report to the IRS $326,862 in income received from the check-kiting scheme and his businesses, and that he failed to file a tax return for tax year 2016 in which he received gross income of $255,812.

According to court documents, the tax loss to the IRS for tax years 2013 thru 2016 amounts to $305,426. In total, Doyle and his wife failed to report more than $1 million dollars in income.

An information is merely an allegation and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.

Bank fraud is punishable by statutory penalties of up to thirty years in federal prison, a term of supervised release of up to five years, and a fine of up to $1,000,000. Filing a false tax return is punishable by statutory penalties of up to three years in federal prison, a term of supervised release of up to one year, and a fine of up to $250,000 or twice the pecuniary gain or loss. Failure to file a tax return is punishable by statutory penalties of up to one year in federal prison, a term of supervised release of up to one year and a fine of up to $100,000.

The matter was investigated by Internal Revenue Service Criminal Investigation and the Federal Bureau of Investigation.

The case is being prosecuted by Assistant U.S. Attorney Dulce Donovan.

Source: http://criminal-justice-online-courses.blogspot.com/2018/08/businessman-former-state-senator.html

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