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Banker's list is like found money for IRS Roster of tax evaders yields 4th conviction Thursday, December 13, 2001 By Torsten Ove, Post-Gazette Staff Writer
When the FBI arrested John M. Mathewson of Texas for laundering money in a cable-piracy scheme in 1996, he agreed to cooperate with agents and immediately turned over the encrypted computer records of Guardian Bank & Trust, the bank he owned on the island of Grand Cayman.
For the first time, federal agents had access to the internal dealings of an offshore bank and its list of 1,500 wealthy tax cheats.
The Criminal Investigation Division of the IRS has been going after them ever since.
Yesterday in federal court, another of Mathewson's customers went down.
Richard E. McCoy, a plastic raw materials broker from Squirrel Hill, waived indictment and pleaded guilty to charges of filing false income tax returns as part of a scheme to conceal more than $900,000 in income from the IRS by tucking it away at Guardian. McCoy was released on bond that required him to turn over his passport.
According to the criminal charge, McCoy, 58, falsified tax returns for 1993 and 1994 while running two corporations, Polymer Industries and Polymer International, out of his home on Albemarle Avenue.
According to a report prepared by the IRS, McCoy opened sham corporations at Mathewson's bank, diverted his business income checks to them to avoid paying taxes and didn't tell his tax preparer what he was doing. Because the gross income for his businesses was prepared on the basis of his deposits to business accounts in the United States, his concealment of income caused his business income to be underreported.
In 1993, he hid $37,827 in business receipts and another $818,748 in 1994. From 1992 through 1994, McCoy did not report a total of $909,687. The total tax loss was $398,529.
According to Mathewson's grand jury testimony, McCoy established an account at Guardian in the early 1990s in the name of Polymer Industries. Like many of the bank's customers, he then paid $3,300 to open another account under the name Klystron Inc., a sham corporation into which he transferred money paid to him by his clients.
McCoy took an extra step to cover his tracks. He paid a trust company $30,000 to establish a sham corporation in the Netherlands, known as Eversholt B.V., to set up loan payments back to his Polymer Industries checking account in the United States.
Guardian prepared the phony loan documentation and then wired McCoy's unreported income and interest from the foreign accounts to Polymer. After receiving back his own money, McCoy paid the phony Eversholt loan with interest payment checks in the amount of $57,600, which he deducted from his 1994 income tax returns.
McCoy also concealed the existence of his foreign accounts from his tax preparer and then falsely answered "no" to the foreign accounts question on his 1994 tax return.
McCoy and his wife, Joyce, wrote checks on the Polymer account and deposited them into their Dollar Bank account in Pittsburgh, using the money to pay the mortgage on their home, their rental property on Avondale Street and their condominium at Hidden Valley Ski Resort in Somerset.
The couple also used $100,000 in offshore funds to pay for charges on their Visa credit card from 1993 to early 1995, including a $16,890 diamond Joyce McCoy bought in 1994.
McCoy, who will be sentenced Feb. 28, is the fourth of Mathewson's clients to be prosecuted in the Western District of Pennsylvania.
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