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Internet Pharmacy Website Affiliate Pleads Guilty to Filing False Tax Return

According to the DOJ Press Release, Internet Pharmacy Website Affiliate Pleads Guilty to Filing False Tax Return, Pamela B. Reid pleaded guilty to one count of filing a false individual income tax return for the 2006 tax year, the Justice Department and Internal Revenue Service (IRS) announced. Reid was charged in the District of Minnesota by an information filed on Sept. 27, 2013.

According to the plea agreement, Reid worked as a website affiliate for an internet pharmacy organization from 2006 through 2012. As a website affiliate, Reid maintained websites based on templates provided from the internet pharmacy organization. These websites allowed U.S. customers to purchase prescription drugs from their personal computer. Reid was paid a percentage of the profit on each prescription sold through one of her websites and received her compensation by international wire from non-U.S. bank accounts under the control of the internet pharmacy organization.

Reid pleaded guilty to filing a false individual income tax return that failed to report any business income for the year 2006. According to the plea agreement, Reid admitted that in 2006 she had unreported gross receipts of at least $306,081.88 and additional federal income tax due and owing of at least $100,908. As part of her guilty plea, Reid also admitted that she failed to report business income from her internet pharmacy organization affiliated websites on her individual income tax returns from 2007 through 2010. The total federal income tax Reid did not report or pay for 2006 through 2010 was $270,397.

“In today’s economic environment, it’s more important than ever that the American people feel confident that everyone is playing by the rules and paying the taxes they owe,” said Kelly R. Jackson, IRS – Criminal Investigation Special Agent in Charge of the St. Paul Field Office. “Those Americans who file accurate, honest and timely returns can be assured that the government will hold accountable those who don’t. The IRS Criminal Investigation Division, together with the Department of Justice, will investigate and prosecute those who violate our tax system.”

Reid faces a potential maximum penalty of three years in prison and a potential maximum fine of $250,000 or twice the gross gain of the offense. Reid has also agreed to pay restitution to the IRS in the amount of $376,438.87. Sentencing will be scheduled at a later date.

Kathryn Keneally, Assistant Attorney General for the Department’s Tax Division, thanked Special Agents of IRS – Criminal Investigation, who investigated the case, and Tax Division Trial Attorney Dennis R. Kihm, who prosecuted the case.

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Meet Paul Raymond

Meet Paul Raymond

Mr. Raymond is a sought after speaker in tax controversy law by many attorney, accountant, and business groups and at the request of the Internal Revenue Service, has presented programs at the IRS Nationwide Tax Forum, attended by tax professionals throughout the United States.

Additionally, he continues to be an active member in the Section of Taxation, American Bar Association, where he was the Past Chair of the Employment Taxes Committee.

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