Tobacco shop owner indicted for filing false income-tax returns
URBANA — A man who owned tobacco shops in Champaign and Decatur has been indicted in federal court in connection with filing false income-tax returns and structuring cash transactions to avoid detection by the Internal Revenue Service.
On Wednesday, a federal grand jury indicted Michael S. Fogerson, 50, who listed an address in the 2500 block of Woodridge Place, Champaign, with two counts of filing false income-tax returns and one count of structuring.
Fogerson was the owner of The Smoke Shack tobacco shops in Champaign and Decatur at the time of the incidents, according to a release from the U.S. attorney's office.
If convicted, each count of filing a false income-tax return carries a penalty of up to three years in prison, a $100,000 fine plus the costs of prosecution, and full restitution. For unlawful money structuring, the penalty is up to 10 years in prison.
According to the indictment, Fogerson withheld financial records from his tax preparer for tax years 2009 and 2010.
“As a result, the company’s gross receipts were allegedly underreported by a total of approximately $1.3 million, and ultimately, Fogerson allegedly lowered his individual adjusted gross income for each of the tax years,” said Sharon Paul, a spokeswoman for the U.S. attorney’s office.
Paul said the indictment alleges Fogerson failed to pay about $470,913 in income taxes over the two-year period.
The indictment also charges Fogerson with allegedly structuring cash deposits to different bank accounts under his control 316 times between Jan. 10, 2011, and Dec. 16, 2011.
Paul said financial institutions are required to file Currency Transaction Reporting documents with the IRS on any cash transactions of more than $10,000. Fogerson allegedly made his transactions below that threshold to avoid the filing of those documents and the potential detection of his failure to report all of The Smoke Shack’s gross receipts on his federal income-tax returns.
The indictment seeks a money judgment against Fogerson of $1,735,937, representing the amount of the property involved in or traceable to the alleged structuring offenses.
The case is being prosecuted by Assistant U.S. Attorney Eugene L. Miller.