Richard A. Frey - Page 3

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          Petitioner herein was the defendant in the criminal case of                 
          United States v. Frey, docket No. 95CR00035-J, which was tried in           
          the U.S. District Court for the Western District of Kentucky.               
               Petitioner was indicted on April 5, 1995, with respect to              
          the criminal matter.  The indictment charged that petitioner, who           
          was employed as the Director of Corrections for the Jefferson               
          County Department of Corrections, received bribes in exchange for           
          assisting a corporation in obtaining certain contracts.  In                 
          addition, the indictment charged that petitioner knowingly and              
          willfully attempted to evade Federal income tax for 1990, 1991,             
          1992, and 1993 by filing false and fraudulent joint returns in              
          violation of section 7201.  Petitioner was charged with                     
          underreporting income, on behalf of himself and his spouse, in              
          the amounts of $44,000, $48,000, $44,000, and $52,989 for tax               
          years 1990, 1991, 1992, and 1993, respectively.  It was                     
          petitioner's position that these amounts were received by him               
          during the years in issue as nontaxable loans.  Petitioner was              
          found guilty of conspiracy to commit extortion, mail fraud, money           
          laundering, and tax evasion.                                                
               Respondent asserts that petitioner's conviction of tax                 
          evasion under section 7201 collaterally estops him from rebutting           
          the determination that he is liable for civil fraud penalties               
          under section 6663 for the same years.  Respondent further                  
          maintains that the deficiencies in income tax and the penalties             





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