Former Owner Of California Dietary Supplement Company
Pleads Guilty In Federal Tax Fraud Conspiracy
DEBRA W. YANG
United States Attorney
Central District of California
Press Release, March 2, 2004
The former owner of a Marina Del Rey corporation that has marketed dietary supplements to senior citizens pleaded guilty today to conspiring to evade millions of dollars in corporate income taxes during a scheme that overstated the corporation’s claimed business expenses on its federal tax returns.
Almon Glenn Braswell, a 60-year-old Miami Beach resident, pleaded guilty to the felony charge this afternoon in United States District Court in Los Angeles. By pleading guilty, Braswell admitted that he had participated in a scheme to overstate the business expenses incurred by one of his companies, Gero Vita International, Inc. Braswell was the sole shareholder of Gero Vita and a number of affiliated corporations, including G.B. Data Systems, Inc. Although they were not charged in the indictment, Gero Vita and G.B. Data Systems, Inc. were also parties to the plea agreement.
In a plea agreement filed in federal court, Braswell acknowledged that his scheme caused Gero Vita to underpay its taxes by $4,468,460. However, with penalties and interest, Gero Vita now has an outstanding tax liability of $10,455,367. As part of the plea agreement, Braswell has agreed to make full payment to the Internal Revenue Service in the next three weeks.
The corporate income tax evasion was engineered through a false expense scheme. Braswell used his ownership and control of a Bermuda corporation, Deleon Global Trading, Ltd., to create false expenses on Gero Vita’s books and records. The indictment alleges that the fictitious expense scheme was designed to make it appear that Deleon had sold raw materials for nutritional supplements to Gero Vita so that Gero Vita’s tax liabilities could be fraudulently reduced by millions of dollars. Among other things, the indictment alleges that Gero Vita’s accountant, defendant Robert Bruce Miller, created fictitious invoices that charged Gero Vita for “nutritional supplements” and “health care products” that Gero Vita had purportedly purchased from Deleon. In the plea agreement, Braswell admitted that in fact, Deleon did not supply any products to Gero Vita, nor did it conduct any business in Bermuda or elsewhere.
Braswell is scheduled to be sentenced by United States District Judge Margaret M. Morrow on September 13. As part of the plea agreement, Braswell, G.B. Data and Gero Vita agreed to cooperate with the government. If Judge Morrow accepts the agreement, Braswell will be sentenced to 18 months in federal prison, provided that Braswell, G.B. Data and Gero Vita have complied with their cooperation obligations. If Judge Morrow determines that Braswell or the corporations have failed to comply with their cooperation obligations, Braswell could be sentenced to as much as 41 months. If Judge Morrow refuses to accept the plea agreement, Braswell and the government have the option of backing out of certain provisions in the plea agreement.
One provision of the plea agreement requires Braswell, G.B. Data Systems and Gero Vita to waive the attorney-client privilege and to provide the government with documents that they previously had withheld pursuant to the attorney-client relationship.
G.B. Data Systems is now known as JOL Management Company, Inc.
Braswell was indicted by a federal grand jury in late 2002. The indictment also named Miller, a 46-year-old certified public accountant who resides in Canyon Country, California. Because of Miller’s failing health, the government yesterday filed a stipulation dismissing the charges against Miller without prejudice.
The indictment also named William E. Frantz, 65, of Marietta, Georgia, in five counts. Frantz is charged with conspiring with Braswell to evade Braswell’s personal income tax obligations. The indictment alleges that this scheme resulted in an underpayment of Braswell’s income taxes of more than $9 million for the years 1994 through 1997. Frantz is scheduled to go on trial before Judge Morrow on April 27.
Braswell allegedly evaded the payment of personal income taxes by transferring millions of dollars from G.B. Data Systems to a bank account that Frantz’ law firm maintained in Atlanta and to offshore accounts that Braswell controlled. The indictment alleges that Frantz, who acted as Braswell’s personal tax preparer, failed to report the diverted funds as income on Braswell’s tax returns.
This case was investigated by IRS-Criminal Investigation.
This article was posted on March 4, 2004.