Vallejo Man Charged With Mail Fraud In Tax Evasion Scheme

SACRAMENTO, Calif. — United States Attorney Benjamin B. Wagner announced that a federal grand jury returned a superseding indictment today against Duane Allen Eddings, 49, of Vallejo, charging him with mail fraud, based on false statements made in a bankruptcy case he filed in 2008, and tax evasion, for his evasion of taxes on the income from his Ponzi scheme.

According to court documents, on February 26, 2009, Eddings and Robert Cephas Brown Jr., 55, also of Vallejo, were indicted on charges related to a Ponzi scheme based out of Vallejo that defrauded hundreds of people out of more than $17 million. The indictment charged Eddings and Brown with mail fraud, wire fraud, and money laundering. Brown pleaded guilty on April 6, 2011 and is scheduled to be sentenced on August 2, 2011.

According to the superseding indictment, Eddings made false statements and omissions on a bankruptcy petition that included failing to list nine bank accounts, falsely claiming that his income for 2006 and 2007 was only $17,880 per year, when in fact, his income was at least $1,296,739 and $43,945 respectively, failing to disclose ownership or transfer of a painting he purchased for $38,402, and an item he purchased from Precision Watch Co. for $53,425, and falsely listing a debt that did not exist of $2.5 million to co-defendant Brown. Based on this information, on January 5, 2009, Eddings obtained an order from the bankruptcy court generally discharging his debts. The superseding indictment also alleges that Eddings failed to list his income from the Ponzi scheme when filing his tax returns to the IRS, evading taxes on income of more than $1.5 million.

This case is the product of an extensive investigation by the United States Postal Inspection Service and the Internal Revenue Service Criminal Investigation. Assistant United States Attorneys Matthew Stegman and Michael Anderson are prosecuting the case.

If convicted, Eddings faces a maximum statutory penalty of 20 years in prison for either mail fraud or wire fraud and a fine of up to $250,000. He faces10 years in prison for money laundering and a fine of up to $250,000 or twice the value of the money laundered, whichever is greater, and the maximum sentence for tax evasion is five years in prison and a fine of up to $250,000. The actual sentence, however, will be determined at the discretion of the court after consideration of the Federal Sentencing Guidelines, which take into account a number of variables and any applicable statutory sentencing factors.

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Posted by on May 30 2011. Filed under Mail Fraud, Ponzi Scheme, Tax Fraud. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry

1 Comment for “Vallejo Man Charged With Mail Fraud In Tax Evasion Scheme”

  1. While I agree with the basics in Vallejo Man Charged With Mail Fraud In Tax Evasion Scheme | Wall Street Swindler , I think the buoyant sentiment around today is a result of a false set of circumstances. The demand for consumer finance is still weak and there is no improvement in the housing market. The developed nations are surviving on their politicians ability to just borrow and spend into their countries which is unsustainable. Regards, Arminda Gerson.

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