HARTFORD, Conn. (WTNH) — An Old Saybrook man pleaded not guilty on Friday to tax evasion and filing a false tax return.
David Adams, 55, was arrested on April 14 and indicted on May 3.
The indictment alleges Adams sold an online floral business in 2002, which accounted for a significant portion of $6,269,960 in taxable income he claimed on his 2002 tax return. Officials say Adams represented to the IRS that he was enclosing payment of $1,250,000, no such payment was enclosed and such tax was still outstanding as of June 2011.
The indictment further alleges that Adams sold his partnership interest in another online floral business and received $4,708,419.20 wired into his personal bank account as part of the net proceeds owed to him as a result of the sale. Officials say although he knew that he owed substantial taxes on that amount, he engaged in a number of acts to hide and try to hide this income in order to evade the assessment of a tax. They say Adams:
- hired an accountant to prepare his 2011 taxes and then failed to give the accountant complete, accurate information by failing to disclose the $4,708,419.20 in income ADAMS received in 2011
- provided the accountant with false information about Adams’s estimated tax payments for the year, telling the accountant that he had paid $220,000 when in fact, Adams knew he had only paid $100,000 in estimated taxes for 2011
- caused the accountant to prepare his 2011 tax return with false and fraudulent information
Adams faces up to eight years in prison total.
Officials say he owes approximately $4.6 million in back taxes, interest, and penalties.