Lawrence Physician, Author Indicted on Tax Evasion Charges

KANSAS CITY—Physician Mary C. Vernon, 60, Lawrence, Kansas, is charged with five counts of tax evasion and one count of making a false statement to a bank in order to obtain a loan, U.S. Attorney Barry Grissom said today. The crimes are alleged to have occurred during 2003 through 2010 in Douglas County, Kansas.

The indictment alleges that Vernon co-authored a book with Dr. Robert Atkins and others published in 2004 titled “Atkins Diabetes Revolution.” In 2003 and 2004, she provided consulting services to Atkins Nutritionals Inc. (ANI), a business founded by Dr. Atkins that specialized in weight loss programs and products. She earned approximately $588,686 for services to ANI. After Dr. Atkins’ death, she was hired to promote his nutritional theories. From 2005 to 2008 she was paid approximately $190,000 for those services.

From 1999 through 2007 Vernon was subject to Internal Revenue Service efforts to collect taxes, interest, and penalties that she failed to pay for the years 1991 through 2005. The IRS collected approximately $2 million in taxes, interest, and penalties from Vernon through levies and seizures.

In September 2009 she and the person she lived with applied for a loan to refinance the home they shared in Lawrence, Kansas. Vernon provided the lender, UNB Bank, with documents purported to be copies of pages from federal income tax returns for herself and her partner in 2006 and 2007. In fact, she had filed no tax returns in 2006 and 2007.

If convicted, she faces a maximum penalty of five years and a fine up to $250,000 on each count of tax evasion, and a maximum penalty of 30 years and a fine up to $1 million on the charge of making a false statement to a bank. The Internal Revenue Service investigated. Matthew J. Kluge, Trial Attorney with the U.S. Department of Justice, Tax Division, and Assistant U.S. Attorney Chris Oakley are prosecuting.

Other Indictments

James New, 46, Ottawa, Kansas; Jessica Blackstone, 27, Williamsburg, Kansas; and Nicholas Griffin, 33, Ottawa, Kansas, are charged with one count of conspiracy to possess with intent to distribute methamphetamine. In addition, New and Griffin are charged with one count of possession with intent to distribute methamphetamine; and New is charged with two counts of unlawful possession of firearms after felony convictions. The crimes are alleged to have occurred at various times from December 2010 to March 2012 in Franklin County, Kansas.

Upon conviction, the crimes carry the following penalties:

Conspiracy to possess with intent to distribute methamphetamine: Not less than 10 years and not more than life and a fine up to $4 million.

Possession with intent to distribute methamphetamine: Not less than five years and not more than 40 years and a fine up to $2 million.

Unlawful possession of firearms after felony convictions: A maximum penalty of 10 years and a fine up to $250,000.

The Franklin County Drug Enforcement Unit investigated. Assistant U.S. Attorney Sheri McCracken is prosecuting.

Bryan Phelps, 33, Amarillo, Texas; Chastity Phelps, 31; Edward Ameral, 64; and Ramon David Torres, 32, are charged with one count of conspiracy to possess with intent to distribute more than 100 kilograms of marijuana and one count of possession with intent to distribute marijuana. The crimes are alleged to have occurred from January 2008 to November 21, 2012, in Kansas.

If convicted, they face a penalty of not less than five years and not more than 40 years and a fine up to $4 million on the conspiracy charge and a maximum penalty of five years and a fine up to $250,000 on the other count. The Drug Enforcement Administration investigated. Assistant U.S. Attorney Sheri McCracken is prosecuting.

Jose Balderrama-Villalba, 43, a citizen of Mexico, is charged with unlawfully re-entering the United States after being deported. He was found December 10, 2012, in Sedgwick County, Kansas.

If convicted, he faces a maximum penalty of two years in federal prison without parole and a fine up to $250,000. Immigration and Customs Enforcement’s Enforcement and Removal Operations investigated. Assistant U.S. Attorney Blair Watson is prosecuting.

Carlos Castillo-Olvera, 35, a citizen of Mexico, and Gildardo Munoz-Ronquillo, 42, a citizen of Mexico, are charged with three counts of counterfeiting immigration documents and three counts of aggravated identity theft. In addition, Castillo-Olvera is charged with one count of unlawful possession of a firearm and one count of unlawful possession of ammunition. The crimes are alleged to have occurred at various times in 2012 in Sedgwick County, Kansas.

Upon conviction, the crimes carry the following penalties:

Counterfeiting immigration documents: A maximum penalty of 10 years without parole and a fine up to $250,000 on each count.

Aggravated identity theft: A mandatory two years to run consecutively to any underlying sentence on each count.

Unlawful possession of a firearm, and unlawful possession of ammunition: A maximum penalty of 10 years without parole and a fine up to $250,000.

Immigration and Customs Enforcement’s Homeland Security Investigations investigated. Assistant U.S. Attorney Brent Anderson is prosecuting.

David E. Wright, 38, is charged with two counts of assaulting a corrections officer for the federal Bureau of Prisons. The crimes are alleged to have occurred September 18, 2011

If convicted, he faces a maximum penalty of eight years in federal prison and a fine up to $250,000 on each count. The FBI investigated. Assistant U.S. Attorney David Zabel is prosecuting.

Samuel L. Johnson, 36, is charged with escaping from custody in the Grossman Community Corrections Center in Leavenworth, Kansas. The crime is alleged to have occurred December 5, 2012.

If convicted, he faces a maximum penalty of five years in federal prison and a fine up to $250,000. The U.S. Marshals Service investigated. Assistant U.S. Attorney Tris Hunt is prosecuting.

In all cases, defendants are presumed innocent until and unless proven guilty. The indictments merely contain allegations of criminal conduct.