Wilmington orthodontist gets prison for fraud

Will begin serving jail sentence in June

News Journal

DAYTON – Dr. Melville Donald Hayes, 65, of Wilmington was sentenced to 15 months in prison, one year of supervised release and was ordered to pay $223,783.43 in restitution to the Internal Revenue Service (IRS) for making a false statement on a collection information statement form with the IRS, according to a news release from the IRS. Hayes previously pleaded guilty to the aforementioned charge on March 18, 2015.

He will begin serving his sentence June 13, according to court documents.

Benjamin C. Glassman, Acting United States Attorney for the Southern District of Ohio, and Kathy A. Enstrom, Special Agent in Charge, Internal Revenue Service Criminal Investigation, Cincinnati Field Office announced the sentence handed down March 11, 2016 by Senior U.S. District Judge Walter H. Rice, the IRS stated.

According to court documents, in July 2009 while the IRS was pursuing collection of Hayes’ unpaid income tax liabilities for the 2005, 2006 and 2007 income tax years, Hayes was asked to complete an IRS Form 433-A, “Collection Information Statement for Wage Earners and Self-Employed Individuals.” Form 433-A is used by IRS for assessing the collectability of unpaid tax liabilities. Form 433-A requires a taxpayer to report all assets and report whether any assets have been transferred for less than full value within the past ten years.

According to the IRS, during 2007 and 2008, Hayes purchased approximately $138,142 in art, jewelry and antiques, including $56,445 in jewelry purchased from Tiffany’s, a Portrait of “Gentleman and Son” purchased for $14,697, a Chippendale sofa purchased from Sotheby’s for $34,000, and a pair of Mahogany back stools purchased for $33,000. The IRS said at the time Hayes signed the Form 433-A under the penalty of perjury, Hayes knew that he had previously gifted those assets to his mother. After Hayes willfully failed to report the transfer of those assets for less than full value on the Form 433-A, the IRS closed its collection case as uncollectable.

Hayes agreed that despite filing for bankruptcy, his total income tax liability for the 2005, 2006, 2007, and 2008 income tax years was at least $223,783.43.

“Hiding assets from the IRS is a crime that will not go unpunished,” said Kathy A. Enstrom, Special Agent in Charge, IRS Criminal Investigation, Cincinnati Field Office. “It is a crime that undermines the integrity of the IRS’ collection process.”

The story made national news last August in a Wall Street Journal business blog story titled “Stories of Weird Bankruptcy: The Trial of the Alabaster Medallion.”

Will begin serving jail sentence in June

News Journal

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