Beaverton, Oregon Resident Sentenced on Federal Income Tax Evasion Charge

PORTLAND, OR—Lili A. Brown, 46, of Beaverton, Oregon, was sentenced today by U. S. District Judge Garr M. King to four months in prison, to be followed by four months of home detention and 36 months of supervised release. In January 2007 Brown pled guilty to one count of evasion of payment of taxes by aiding and abetting. She is required to pay $130,871 in restitution to the Internal Revenue Service. (IRS) Judge King ordered the defendant to surrender to the Bureau of Prisons on January 15, 2010.

As part of her plea, Brown agreed that the tax loss to the government—$130,871—was the amount of tax due to the IRS according to tax returns filed by her husband, Johnny “Mickey” Brown for the years 1993 through 1995. She admitted she knew that her husband had an outstanding tax liability even as she helped him by acting as a nominee owner of various assets. The Browns were married in 1996 and worked together thorough 2003 in Tigard, Oregon operating a Kirby vacuum distributorship business.

Brown admitted that she allowed her name to be used on deeds to property in Oregon purchased by Johnny Brown as if she were the purchaser. When the properties were sold, the sales proceeds were paid to Lili Brown who then provided the money to Johnny Brown. Her purpose was to help Johnny Brown conceal from the IRS certain assets from which the IRS might collect the taxes owed. The government noted that Lili Brown also acted as a nominee owner of bank accounts, vehicles and in loan transactions, all at the direction of Johnny Brown.

According to the government’s sentencing memorandum, the defendant admitted that hundreds of thousands of dollars reported on Forms 1099 as income to her was actually her husband’s income, and that she was merely a conduit for the funds. She also admitted she was not filing tax returns, joint or otherwise, for the same time period, believing she had no income.

Brown’s husband is charged in a third superseding indictment returned in January 2009, with evasion of payment of taxes, wire fraud, false statements to a financial institution, mail fraud, and bank fraud. He is scheduled for trial on December 1, 2009.

The case was investigated jointly by the Internal Revenue Service – Criminal Investigation and by the Federal Bureau of Investigation. The case was prosecuted by Assistant U.S. Attorney Lance Caldwell.