United States Attorney's Office District of Connecticut
Press Release

GRAND JURY RETURNS 48-COUNT INDICTMENT AGAINST HAMDEN TAX PREPARER

Kevin J. O'Connor, United States Attorney for the District of Connecticut, announced today that a federal grand jury sitting in Hartford has returned a 48-count Indictment against JOHN K. CANNON, age 63, of 36 Kelly Road, Hamden, Connecticut, charging him with assisting clients of his tax preparation business with filing materially false federal income tax returns. The Indictment was returned on March 31, 2004, and CANNON was arrested this morning outside of his office without incident. He is expected to be presented this afternoon before United States Magistrate Judge William I. Garfinkel in Bridgeport federal court.

The Indictment alleges that CANNON, who has been self-employed as a tax preparer for 39 years, knowingly prepared 33 federal income tax returns for the years 1999 through 2001 that were materially false. Specifically, the indictment alleges that CANNON claimed numerous deductions on his clients' tax returns knowing that they were not entitled to those deductions. The Indictment also alleges that CANNON corruptly endeavored to obstruct an Internal Revenue Service investigation and audit of several of his clients' tax returns by, among other things, advising his clients to provide false and misleading information to the investigators and by instructing them to create false documents to substantiate fictitious deductions appearing on the returns.

In addition, the Indictment alleges that CANNON filed a false income tax return of his own for the year 2000, which materially understated the amount of income he received in return for preparing more than 1000 income tax returns during that year. Finally, the Indictment alleges that CANNON failed to file an income tax return for the year 2001, despite earning more than $72,435 from his tax preparation business during that year.

"This indictment alleges that Mr. Cannon repeatedly abused his position as a tax-preparer and cheated on his own taxes, as well," U.S. Attorney O'Connor stated. "As we are in the heart of tax season, this case should serve as a timely reminder that we all must file an honest tax return with the IRS and satisfy the tax obligations that we owe to our country. Also, it's important to remember that most tax preparers are law-abiding professionals."

"Taxpayers should exercise the same level of care in hiring a return preparer as they would in selecting a doctor or attorney," Joseph Galasso, Special Agent-in-Charge of the Internal Revenue Service, Criminal Investigation Division in Boston added. "Ultimately, the most important thing to understand is that it is your responsibility as a taxpayer to make sure that the tax return that it filed for you is accurate and correct."

CANNON faces a possible term of imprisonment of up to three years, and a fine of up to $100,000, for each count in which he is charged with preparing a materially false income tax return. He also faces an additional term of imprisonment of up three years, and a fine of up to $5,000, for each count in which he is charged with impeding the investigation being conducted by the Internal Revenue Service. Finally, he faces a possible term of imprisonment of up to one year, and a fine of up to $25,000, if he is convicted of failing to file an income tax return.

U.S. Attorney O'Connor stressed that an indictment is only a charge and not evidence of guilt. The defendant is entitled to a fair trial at which it is the Government's burden to prove guilt beyond a reasonable doubt.

This case is being investigated by the Internal Revenue Service – Criminal Investigation Division. The case is being prosecuted by Supervisory Assistant United States Attorney Ronald S. Apter.

CONTACT:

U.S. ATTORNEY'S OFFICE
Tom Carson
(203) 821-3722
thomas.carson@usdoj.gov