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PENNSYLVANIA MAN CHARGED WITH CONSPIRACY TO DEFRAUD THE INTERNAL REVENUE SERVICE

 PENNSYLVANIA MAN CHARGED WITH CONSPIRACY TO DEFRAUD
 THE INTERNAL REVENUE SERVICE
 BOSTON, May 6 /PRNewswire/ -- A Paoli, Penn. man was charged today with conspiring with a convicted tax shelter promoter to evade income taxes on more than $400,000 in commission income.
 U.S. Attorney A. John Pappalardo announced that an Information has been filed charging Hugh D. Summers of Paoli, Penn. with conspiracy to defraud the United States by impeding the lawful functions of the Internal Revenue Service. The Information charges that Summers represented companies in the flavorings industry, and was paid on a commission basis. Beginning in January, 1982, Summers instructed his clients to make all commission checks payable to Coastal Development, Ltd., a British Virgin Islands Corporation, rather than to Summers. Summers caused these checks to be deposited into Coastal's bank account in Nassau, Bahamas. Summers controlled Coastal, and caused Coastal to transfer funds back to the United States in the form of sham loans to Summers, or transfers to stock brokerage accounts held in the name of Lodswell and Chatham, Ltd., a Hong Kong corporation controlled by Summers. By executing this scheme, Summers attempted to evade the payment of income taxes on more than $400,000 in commission income.
 The Information charges that Summers conspired with Laban Quimby, a former Lenox, Mass. tax shelter promoter. Quimby was convicted in February, 1988, of conspiracy to defraud the United States in connection with other tax shelter activity.
 This case represents the fourth prosecution of a client of Laban Quimby. Two Phoenix, Arizona businessmen, Raymond Harper and Lawrence Mehren, previously pleaded guilty to conspiracy charges in connection with a $2 million embezzlement, and were recently sentenced to 24 months imprisonment without parole and 27 months imprisonment without parole, respectively. On May 5, 1992, Scottsdale, Arizona Certified Financial Planner Wilson J. Humber was indicted on conspiracy and tax evasion charges in connection with a scheme involving sham insurance policies and sham loans.
 Summers faces up to 5 years imprisonment, and a fine of $250,000. Moreover, Summers is liable for unpaid taxes, penalties and interest.
 This case was investigated by Special Agents of the Internal Revenue Service's Criminal Investigation Division, and is being prosecuted by Assistant U.S Attorney Mark W. Pearlstein of Pappalardo's Economic Crimes Division.
 -0- 5/6/92
 /CONTACT: Press Officer st the U.S. Attorney's Office 223-9445/


TM -- NE007 -- 7048 05/06/92 11:36 EDT
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Publication:PR Newswire
Date:May 6, 1992
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