H. Jacob Lager

Iraq reconstruction legacy: Kickback conspiracies and tax crimes

In Court decisions, Tax Crime on October 12, 2012 at 7:49 am

This past Wednesday, Assistant Attorney General Lanny A. Breuer of the Criminal Division and U.S. Attorney for the Northern District of Alabama Joyce White Vance announced the sentencing of two former Parsons Company employees for their participation in a kickback conspiracy in Iraq and related tax crimes.

According to court documents, Gaines R. Newell Jr and Billy Joe Hunt worked for Parsons in Iraq as program managers to support the U.S. Army Corps of Engineers in its efforts to keep abandoned munitions from insurgents and unfriendly forces.  In their plea agreements, the Defendants admitted to taking over $1 million in kickbacks from certain (shall we say “more friendly”) subcontractors, in return for awarding them valuable munitions clearance program contracts.

Newell and Hunt also admitted to filing false federal income tax returns by not disclosing the kickback income.  If that last part sounds familiar to you – yes, “that’s how they got Capone.”

In what’s becoming a tax crime tradition here at TSF, lets run down what $1 million of illegal income cost our perps:

Billy Joe Hunt (age 57) received:

  • 15 months in prison:
  • 3 years of supervised release;
  • A tax restitution bill for $66,212; and
  • Forfeiture of $236,472.

Gaines R. Newell Jr. (age 53) received:

  • 27 months in prison;
  • 3 years of supervised release;
  • A tax restitution bill for $241,088; and
  • Forfeiture of $861,027 to the U.S. Army Corps of Engineers.

I would ever advise a client to engage in an illegal business activity. BUT, I would advise him to, at the very least, pay his taxes on the income.

Read the official presser here.

Flag image provided by cudmore.

  1. Unfortunate. At least they got caught. I wonder about all those who don’t…

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