A married couple, that owned a chiropractic business in Allentown, Pennsylvania for 15 years, received stiff prison sentences when they were found guilty of defrauding the federal government of more than $1.4 million.
Paul, 55, was sentenced to 6 years and 6 months in prison followed by 3 years of supervised release. Barbara, also 55, was sentenced
to 5 years and 3 months in prison followed by 3 years of supervised release.
Paul testified that, upon the advice of others, he became convinced that IRS agents had no power to compel him to pay taxes and that he
had discovered a tax regulation that stated that chiropractors are exempt from tax because they do not engage in a trade.
Reports state that the defendants operated a web of shell corporations and used offshore tax havens to conceal their income.
Additionally, Paul submitted $1.3 million in phony checks labeled as “Prepaid Foreign Bills of Exchange” to the IRS in an attempt to settle his tax debts.
In December, 2011, each was convicted of one count of conspiracy to defraud the government, five counts of tax evasion, and two counts of
filing false income tax returns.
Both have been in custody since their convictions last year and were ordered to pay $1.4 million in restitution to the IRS.
Since their convictions in December, their lawyers and family members have closed their clinic, sold their business equipment, cars and other personal belongings and have put their residence on the market in an effort to repay the IRS.