A Utah couple that defrauded a Kona manufacturer of bottled water marketed in Japan were sentenced this week in U.S. District Court in Honolulu.
A Utah couple that defrauded a Kona manufacturer of bottled water marketed in Japan were sentenced this week in U.S. District Court in Honolulu.
Chief District Judge J. Michael Seabright sentenced 73-year-old Steve Edwards of St. George, Utah, to up to 36 months in prison, and his 61-year-old wife, Melanie Edwards to up to 30 months in prison for conspiracy to defraud the IRS and conspiracy to commit money laundering. The couple was also sentenced to three years of supervised release, the federal equivalent of probation.
According to U.S. Attorney for the District of Hawaii Kenji M. Price, the Edwardses defrauded Koyo USA Corporation for more than 10 years. They created sham pass-through companies and held those companies out to Koyo as if they were legitimate or actual manufacturers — when, in reality, the companies were only re-sellers, with no employees, that only existed to take money from Koyo.
The Edwardses laundered $3.7 million dollars in fraudulent proceeds and defrauded the IRS by filing false tax returns, submitting false books and records to their accountants, and improperly classifying millions of dollars in distributions to the owners of the pass-through companies as consulting fees.
Such conduct allowed the Edwardses to evade paying $1,471,113 in taxes.
Seabright also ordered the couple to make full restitution to Koyo USA and the IRS.
