Thursday, September 02, 1999
Airport operators plead guilty
Tax cheating included assets hidden abroad
BY BEN L. KAUFMAN
The Cincinnati Enquirer
In a case that reached into a Panamanian company and a Cayman Island bank, operators of Middletown's Hook Field airport pleaded guilty Wednesday to cheating on their taxes.
Terrence Hogan, 43, of Hamilton admitted signing a false 1994 tax return as president of Miami Valley Aviation Inc.
His brother, Michael, 53, of Middletown admitted conspiring to impede tax collections and failing to pay his 1995 personal tax.
If U.S. District Judge Sandra S. Beckwith accepts their pleas, other charges will be dropped.
Michael Hogan's plea agreements recommend 36 to 46 months in prison, a $100,000 fine and $12,000 costs for his prosecution.
Justice Department attorneys Nanette Davis and Dana Boente said Michael Hogan's schemes cost the government more than $550,000 in taxes.
Terrence Hogan's plea agreement recommends five years of probation, starting with a year of home detention, during which he is to spend four days a month behind bars. He also is to pay a $30,000 fine, $12,000 prosecution costs and perform 500 hours of community service.
Ms. Davis said the tax loss attributed to Terrence Hogan's cheating from 1990 to 1998 was more than $23,500.
Both brothers waived a pre-sentence report, but Judge Beckwith asked for one, saying she needed it to ascertain whether the guilty pleas and recommended sentences were appropriate.
Terrence Hogan could be sentenced before year's end.
However, the pre-sentence investigation could take longer for Michael Hogan, given his statement of emotional problems, his role in the ownership of Miami Valley Aviation, and his complex efforts to hide assets abroad and frustrate tax collectors.
In addition to their sentences, the Hogans must bring their personal and corporate tax returns up to date and settle questions of back taxes, interest and penalties with the Internal Revenue Service.
IRS agent Tedd Boomershine told the judge that Terrence Hogan cooked the books by ignoring some invoices and channeling the payments to his brother.
As a result, Agent Boomershine said, Miami Valley Aviation's reported $4.5 million income for 1994 was “significantly underreported.”
Prosecutor say it is almost impossible to get records from secretive offshore banks.
However, in Michael Hogan's case, they “received a number of business records from a confidential informant.”
Those records showed that Michael Hogan deposited more than $700,000 of Miami Valley Aviation money in that offshore account, of which at least $500,000 was with drawn in 1997-98.
The Panamanian corporation was a shell, used only to conceal income and create false depreciation deductions, Agent Boomershine said.
The Hogans, both of whom have master's degrees in business administration, are free on bond, with a stern admonition by Judge Beckwith:
She will hammer them with maximum time if they violate their release and that prison term would be in addition to sentences for admitted tax offenses.
In addition to running the airport, Miami Valley Aviation operates charter and cargo services, the government said.
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