Bloomfield Hills Man Sentenced for Tax Offenses
|U.S. Attorney’s Office November 01, 2013|
A Bloomfield Hills resident was sentenced yesterday to 27 months’ imprisonment for impeding the administration of the IRS laws and presenting false documents to the IRS, announced United States Attorney Barbara L. McQuade.
McQuade was joined in the announcement by Carolyn Weber, Acting Special Agent in Charge of the Internal Revenue Service, Criminal Investigation.
Ernest Adam Csolkovits, 57, of Bloomfield Hills, Michigan, was sentenced by United States District Judge Julian Able Cook.
According to court records Csolkovits’ operated a multi-level marketing company called W.H.I.C. USA Inc. based in Northville, Michigan. Csolkovits solicited money from individuals, typically retired and elderly, for what he called commissaries to sell products that his company, W.H.I.C. USA, would produce. One such product was an all- natural rodenticide called E.R.A.S.E., which Csolkovits promised to have approved by the EPA and then market and produce. Csolkovits obtained more than $2 million from individuals during the period of June 2000 through the end of 2003. Csolkovits, however, spent much of the money for personal expenditures but filed no corporate or individual tax returns. Eventually, when he and his company were audited by the IRS, he falsely informed the IRS that the substantial cash he had taken out of his corporate account was to pay royalties to a parent company in the Bahamas, called W.H.I.C. International. He also provided the IRS with a purported exclusive license agreement between his company and the Bahamian company and a substantial number of receipts purportedly evidencing the cash royalty payments made pursuant to the exclusive license agreement. The evidence revealed, however, that the Bahamian company was merely a shell company that Csolkovits had formed himself and that the license agreement and receipts were phony.
“Not only did Mr. Csolkovits lie to the IRS, he lied to his investors in this elaborate, multi-level marketing scheme,” stated Carolyn Weber, Acting Special Agent in Charge. “He had no intention of using the money as he promised his investors he would. Instead Mr. Csolkovits used the funds for his own personal benefit. The IRS will continue to pursue those who circumvent the United States tax system and seek justice for the victims of those who unscrupulously take advantage of others.”
The investigation of this case was conducted by special agents of the FBI and IRS-Criminal Investigation and prosecuted by Assistant U.S. Attorney Ross MacKenzie.