IRS - Internal Revenue Service

11/28/2023 | Press release | Distributed by Public on 11/29/2023 07:17

Cincinnati business owner sentenced to prison for tax evasion and money laundering

Date: November 28, 2023

Contact: [email protected]

CINCINNATI - John Franklin Brock, of Cincinnati, Ohio, was sentenced to one year and one day in prison, and ordered to pay a $40,000 fine after previously pleading guilty to tax evasion and money laundering. Brock pleaded guilty to the aforementioned charges on July 28, 2022.

According to court documents, Brock operated multiple businesses including UT Service, UTS Inc. and Wolverine Wireless Inc. which perform cellular tower construction and decommissioning services; Impact LLC d/b/a Pac-Telephone, a prison inmate communications business; and 6 Bayview Blvd. LLC which performed money transmission services for his prison inmate communications business. Brock operated all of these businesses out of a storefront in Cincinnati.

From January 2016 through at least January 2020, Brock willfully attempted to evade and defeat income and tax due and owing and the assessment of taxes associated with his businesses. Brock purposely created these entities by registering them as corporations or single-member LLCs through which related companies were obligated to report their separate income and losses, in some cases, concealing his ownership and using names of others or aliases. Brock operated several of the companies interchangeably. In an effort to evade the payment of corporate income tax for UT Service and UTS, Brock failed to file corporate tax returns for UT Service and UTS and instead he filed corporate income tax returns for Wolverine reporting minimal to no income. For the 2016 and 2017 corporate tax returns for Wolverine, Brock reported $2 and $0.00 in taxable income, respectively. However, when applying for a small business loan, Brock submitted tax returns for UTS Inc. that showed net income of over a million dollars in 2016 and over $420,000 in 2017.

Additionally, Brock transmitted an application for a money transmission terminal for 6 Bayview Blvd to MoneyGram using the alias name Alan Coleman. In the application, Brock did not disclose his involvement in the business, instead falsely listing himself as the "landlord." When speaking with MoneyGram about the application, Brock represented that the business purchased fish, was based in the port, and would provide money transmission services to fisherman. Brock never disclosed that the transfers were originated by inmates. Had Brock provided this information to MoneyGram, MoneyGram would not have licensed its terminal to Brock. Brock used the money transmission terminal to send and receive interstate money transfers of over $225,000 associated with his prison communication business.

U.S. Attorney Kenneth L. Parker of the Southern District of Ohio and Bryant Jackson, Special Agent in Charge, Internal Revenue Service Criminal Investigation (CI), Cincinnati Field Office announced the sentence handed down by U.S. District Court Judge Douglas R. Cole.

The case was investigated by CI. Assistant U.S. Attorney Ebunoluwa A. Taiwo prosecuted the case.

CI is the criminal investigative arm of the IRS, responsible for conducting financial crime investigations, including tax fraud, narcotics trafficking, money-laundering, public corruption, healthcare fraud, identity theft and more. CI special agents are the only federal law enforcement agents with investigative jurisdiction over violations of the Internal Revenue Code, obtaining a more than a 90 percent federal conviction rate. The agency has 20 field offices located across the U.S. and 12 attaché posts abroad.