Elizabeth D. Kupfer Sentenced to Three Years in Prison for Evading Federal Taxes

ALBUQUERQUE—Elizabeth D. Kupfer, 50, of Rio Rancho, New Mexico, was sentenced this afternoon to 36 months in federal prison, followed by three years of supervised release, for her tax evasion conviction. Mrs. Kupfer also was ordered to pay $288,339 in restitution to the IRS. The restitution is to be paid jointly by Mrs. Kupfer and her husband Joseph C. Kupfer, 49, who also was convicted of tax evasion.

Mrs. Kupfer’s sentence was announced by U.S. Attorney Kenneth J. Gonzales; Dawn Mertz, Special Agent in Charge of the Phoenix Field Office of IRS Criminal Investigation; and Carol K.O. Lee, Special Agent in Charge of the Albuquerque Division of the FBI.

“Paying taxes is an obligation of citizenship, and it is every citizen’s duty to pay them honestly and fully,” said U.S. Attorney Kenneth J. Gonzales. “When people like Elizabeth and Joseph Kupfer intentionally dodge their responsibility to pay taxes, honest Americans end up having to pay more. The sentence imposed on Mrs. Kupfer should serve as a warning that those who seek to avoid their tax responsibilities will be prosecuted and punished to the fullest extent of the law.”

“IRS-Criminal Investigation will continue to investigate those who cheat their fellow citizens by not paying their taxes. In this case, Mrs. Kupfer intentionally concealed over $750,000 of income. Those who are tempted to commit tax evasion should know that the end result will likely be time in a federal prison,” said Dawn Mertz, Special Agent in Charge of the Phoenix Field Office of Internal Revenue Service-Criminal Investigation.

Mr. and Mrs. Kupfer initially were charged in December 2010 in a three-count indictment with evading more than $285,000 in federal taxes by failing to report at least $768,333 in taxable income during tax years 2004 through 2006. In July 2011, an 11-count superseding indictment was filed that added Armando G. Gutierrez, 65, of Corpus Christi, Texas, as a defendant, and also added conspiracy and theft of government property charges against Mr. Kupfer and Mr. Gutierrez and obstruction and money laundering charges against Mr. Gutierrez. Thereafter, the court severed the three tax evasion counts against the Kupfers from the other eight counts in the superseding indictment for purposes of trial.

On August 17, 2012, a federal jury convicted Mr. and Mrs. Kupfer on three tax evasion charges after a five-day trial. The evidence established that, from 2004 through 2006, Mr. Kupfer received income from his business, Kupfer Consulting, and the Kupfers reported income from Kupfer Consulting on their joint personal tax returns. Although Mr. Kupfer received $1,304,421 in revenue from Kupfer Consulting, the Kupfers reported only $502,541 on their federal tax returns and attempted to conceal approximately $768,333 in income by providing incomplete information to their tax preparer. The Kupfers then signed false and fraudulent tax returns, which they submitted to the IRS.

More specifically, the Kupfers claimed $125,969 in taxable income for 2004 but failed to include at least another $140,000 in income, thus evading at least $51,054 in federal taxes. They claimed $170,625 in taxable income for 2005 but failed to include another $170,000 in income, thus evading $64,651 in federal taxes. Finally, they claimed $125,734 in taxable income for 2006 but failed to include at least another $458,333 in income, thus evading $170,470 in federal taxes.

On January 31, 2013, a federal jury found Mr. Kupfer and Mr. Gutierrez guilty of conspiracy and theft of government property charges after an eight-day trial. The jury also convicted Mr. Gutierrez on obstruction of justice and money laundering charges. Sentencing hearings have yet to be set for Mr. Kupfer and Mr. Gutierrez.

This case was investigated by IRS-Criminal Investigation and the Albuquerque Field Office of the FBI, and it is being prosecuted by Assistant U.S. Attorneys Tara C. Neda and Cynthia L. Weisman.