Marcos Daniel Jiménez, United States Attorney for the Southern District of Florida, and Brian Wimpling, Special Agent in Charge, Internal Revenue Service, Criminal Investigation Division, announced that a Federal Grand Jury sitting in Miami, Florida, today returned a four-count Indictment charging defendants, John Taylor, Myra Taylor, and Elvira Smith, with conspiracy to defraud the United States, and in particular, the Internal Revenue Service, by obstructing and impeding its efforts to assess and collect federal income taxes. Defendants, John Taylor and Myra Taylor, also were charged with three counts of filing false personal income tax returns for the years 1996, 1997, and 1998.

According to the Indictment, John Taylor and his wife, Myra Taylor, owned and controlled, and with the assistance of Myra Taylor's sister, Elvira Smith, operated a group of schools, including Vankara Technical Institute and Vankara Educational Center, Inc., along with a day care center known as Vankara: A Learning Exchange ("Vankara" or "the Vankara Schools"). The Vankara Schools, which received most of their income from federal, state, and local funding programs, were located primarily in Opa Locka, Florida. The Indictment alleges that the defendants engaged in a fraudulent scheme to evade the payment of federal income taxes on Vankara money that they took in addition to their reported Vankara salaries, and on Vankara money that they paid directly to third parties for their personal benefit, and further alleges that John Taylor and Myra Taylor filed joint United States Individual Income Tax Returns, Form 1040, for the calendar years 1996 through 1998 that substantially understated their adjusted gross income by failing to report the additional money and benefits they were taking from Vankara.

In particular, the Indictment charges that the Taylors used substantial amounts of Vankara money for personal expenditures such as mortgage payments, foreclosure redemptions, and taxes on personally owned real estate, residential utility bills, home repairs and renovations, car purchases, and college tuition and school-related expenses for their children. To conceal this income, the defendants made these payments with Vankara corporate checks and with official bank checks purchased with Vankara corporate checks. It is further alleged that John Taylor took large amounts of cash from Vankara which were not reported as income. Most of this money came from the cashing of Vankara corporate checks written to cash.

The Indictment also alleges that during 2000, after Vankara had been served with Grand Jury subpoenas calling for records in connection with this investigation, the defendants caused the preparation and untimely filing of false corporate tax returns for Vankara for the calendar years 1994 through 1997. In particular, it is charged that the defendants provided, false, misleading, and incomplete information and documentation to the accountant hired to prepare these returns, and as a result, these Vankara corporate tax returns substantially overstated the loans from stockholders owed by Vankara to defendants John Taylor and Myra Taylor.

If convicted on the conspiracy count, each of the three defendants faces a maximum statutory term of five(5) years in prison. If convicted on the three counts for filing false income tax returns, John Taylor and Myra Taylor each face a maximum statutory term of three (3) years in prison on each such count. The defendants face substantial fines and tax obligations, if convicted on the charged counts.

Mr. Jiménez commended the investigative efforts of the Internal Revenue Service, Criminal Investigation Division. The case is being prosecuted by Senior Litigation Counsel Edward N. Stamm and Assistant United States Attorney Joan Silverstein.