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Monday, November 25, 2024

Missouri attorney admits guilt in significant tax evasion case

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U.S. Attorney Teresa A. Moore | US Attorney - Western District of Missouri

U.S. Attorney Teresa A. Moore | US Attorney - Western District of Missouri

An attorney from Independence, Missouri, has admitted to evading the payment of $857,000 in income taxes. John C. Carnes, aged 69, entered a guilty plea before U.S. District Judge Howard F. Sachs on one count of tax evasion.

Carnes acknowledged that he deliberately avoided paying personal income taxes for the years 2012 through 2018. He concealed his earnings within attorney trust accounts and withdrew cash to cover personal and business expenses. Attorney trust accounts are designated for holding clients' or third parties' funds separately from a lawyer's own assets.

The investigation revealed that Carnes maintained two trust fund accounts. From 2016 to 2019, he withdrew $444,527 in cash from one account and took out $144,364 from another between 2013 and 2015. The funds were used for gambling and personal expenditures.

Additionally, Carnes deposited $232,000 in fees from services related to the sale of the former Rockwood Golf Course property in November 2017 and the Missouri City Power Plant project into these accounts.

The IRS reported a total tax loss of $618,949 due to Carnes's actions during the specified years. Unpaid federal income taxes for other periods amounted to $175,590, while unpaid state taxes totaled $62,922. This led to an overall tax loss of $857,462.

From 2009 until 2020, the IRS conducted various investigative activities concerning Carnes's tax liabilities.

Carnes faces up to five years in federal prison without parole under federal statutes. However, his sentence will be determined by the court based on advisory guidelines and statutory factors after a presentence investigation by the United States Probation Office is completed.

Assistant U.S. Attorney Rudolph R. Rhodes IV is prosecuting this case following an investigation by IRS-Criminal Investigation.

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