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Financial Fraud Law

The Quintessential Tax Fraud

 A California businessman, Gary Mach, has pleaded guilty to conspiracy to defraud the Internal Revenue Service in a scheme that undoubtedly will be known as the Quintessential Tax Fraud. 

Mach, who operated Crystal Springs Pool Service (CSPS), admitted that beginning around January 2002 and continuing through December 2010, he failed to report substantial income he earned from his pool servicing business, which he operated throughout Riverside County, California. Mach admitted in his plea agreement that he and others established fictitious trusts that they used to receive income and hold assets in an attempt to conceal the assets and income from the IRS.    
According to court documents, Mach purported to operate a trust called “Quintessential,” and directed that his paychecks be made payable to Quintessential. He also opened a bank account in the name of Quintessential, where he deposited CSPS proceeds. Mach admitted that he did not report to the IRS any of the income he earned from CSPS between 2002 and 2010 and that he used Quintessential to conceal income from the IRS. Mach also admitted that, in furtherance of the conspiracy, he also attempted to impede an IRS summons issued to a bank for business account records. Mach closed his bank account after the bank complied with the IRS summons. 
As stated in the plea agreement, the agreed upon total unreported income for the tax years 2002 through 2010 was $1,410,430 and the total tax due and owing was $270,725.  Mach also agreed that he should be ordered to pay restitution for the amount of total tax due and owing. 
Mach faces a maximum penalty of five years in prison, three years of supervised release and a fine of $250,000 or twice the gain or loss resulting from his offense.