03-21-11 monty ervin indictment

8/7/2019 03-21-11 Monty Ervin Indictment

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FEB 17 2011

CLERKU, S. DISTRICT COURTMIDDLE DIST. OF ALA.

V .

PATRICIA ERVINandMONTY ERVINDefendants

The Gran d Jury charges that:

FILED,IN THE DISTRICT COURT OF THE UNITED STATESFOR THE MIDDLE DISTRICT OF ALABAMASOUTHERN DIVISION

UNITED STATES OF AMERICACR. NO. 1:11-CR-07-MHT[Ct. 1: 31 U.S.C. 5324(a)(3);Ct. 2: 18 U.S.C. 371;Cts. 3-5: 26 U.S.C. 7201 & 18 U.S.C. 2]

SUPERSEDING INDICTMENT

INTRODUCTIONAt times relevant to this Indictment:1. PATRICIA ERV1N and MON TY ERV 1N, defendants herein, were married, and

resided in Dothan, Alabama, within the Middle D istrict of Alabama.2. Between 1997 and 2006, PATRICIA ERV IN and MONTY ER VIN owned and

managed Southern Realty & Property Manageme nt, LLC ("Southern Realty"), a propertymanagement company located at 400 West Washington Street, Dothan, Alabama. SouthernRealty received substantial amounts of rental income each month, including cash payments. Onor about December 31, 2006, PATRICIA ERV1N and MO NTY E RVIN dissolved SouthernRealty. Southern Realty did not file a U.S. Corporation Income Tax Return, Form 1120, for the2005 and 2006 tax years.

3. On or about August 14, 2006, PATRICIA E RV1N and M ONTY ERVIN signed anagreement that created Southern Rental Property Management LLC, a property managementcompany located at 400 West Washington Street, Dothan, Alabama. PATRICIA ERVIN andMONTY ERVIN both owned and managed Southern Rental Property Management LLC.

Case 1:11-cr-00007-MHT -WC Document 21 Filed 02/17/11 Page 1 of 12


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wit, MidSouth Bank in D othan, Alabama. During that time period, PATRICIA ERV 1N m ade,and ca used to be ma de, cash depo sits totaling $39,513 in individual amounts of $10,000 or lessto avoid the filing of a Currency T ransac tion Report:

ParagraphDate of DepositDeposit Amount3. February 3, 2006$9,9704. February 6, 2006$9,8475. February 8, 2006$9,8136. February 10,2006$9,883All in violation of Title 31, United States Code, Section 5324(a)(3) and Title 31, Code of

Federal Regulations, Section 103.22.COUNT TWO(Conspiracy to Defraud the United States)

1. The factual allegations contained in Paragraphs 1 through 7 of the IntroductionSection of this Indictment are realleged and incorporated hereinas if copied verbatim.

2. From on or about N ovember 1, 2000, the exact date being unknown to the GrandJury, and continuing to the date of this Indictment, in the Middle D istrict of Alabam a andelsewhere, defendants PATRICIA ERVIN an d MO NTY ERV1N unlawfully, voluntarily,intentionally, and knowingly did conspire, combine, confederate, and agree together and witheach other, to defraud the U nited States for the purpose of impeding , impa iring, obstructing, anddefeating the lawful government functions of the IRS in the ascertainment, computation,assessment, and collection of federal income taxes.

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MANNER AND MEANS3. To accomplish the objects of this scheme, PATRICIA E RV1N and MON TY

ERV1N used the following manners and means, among others:4. PATRICIA ERV1N and MON TY ERV 1N would and did purchase, hold, and sell

property in the nam es of nominees.5. PATRICIA ERV1N and M ONTY ER V1N would and did cause to be prepared

false notarized wa rranty deed s to facilitate the transfer of property held in the names ofnominees.

6. PATRICIA ERV 1N and MO NTY ER VIN would and did direct rental incomefrom properties they held in the names of nominees to be paid to Southern Realty.

7. PATRICIA ERV1N would and did structure, and assist in structuring, cashdeposits into Southern Realty's bank accounts.

8. PATRICIA ER V1N and M ONTY ERVIN w ould and did take steps to obstruct theIRS in its attempt to assess and collect federal income taxes including sending correspondenceintended to impe de the IRS in its investigation.

OVERT ACTS9. In furtherance of the conspiracy, and to effect the objects thereof, PATRICIA

ERV1N a nd MO NTY E RV1N com mitted the overt acts listed below, among others, within theMiddle District of Alabama, and elsewhere:

10. On or about the dates listed below, PATRICIA ER VIN and M ONTY ERVINpurchased and placed assets in the names of the nom inees:

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OVERTDATEPROPERTYNOMINEENOMINEEACTTRUSTTRUSTEE10-111/02/0075 Fain StreetLife LineJeff Hargett____________ ___________ ___________________Holdings______________

10-212/06/00Colonial Shores, UnitStar BriteJack Rudy109Investment10-32/14/0 1Ambassador Beach,Star BriteJack RudyUnit 228Investment10-42/14/0 1Ambassador Beach,Star BriteJack RudyUnit 230Investment10-56/21/0180 Nomberg RoadNebo HoldingsM.C. Spann10-610/30/02212 Dahlia DriveEarthie FarmsMilissa Scott

_____________ ____________ ____________________Holdings_______________11. On or about June 15, 2001, MON TY ERV IN entered into a managementagreement that directed rental income derived from properties owne d by N ebo Holdings Trust tobe collected by Southern Realty.12. On or about July 3, 2002, MONTY BRYN entered into a management agreementthat directed rental income derived from properties owned by Earthie Farm H oldings Trust to becollected by Southern Realty.

13. On or about the dates listed below, PATRICIA ER V1N and M ONTY ERVINcaused to be prepared false notarized w arranty deeds to facilitate the transfer of property held inthe names of the nominees:

OVERTDATEPROPERTYNOMINEENOMINEEACTTRUSTTRUSTEE13-12/04/2004Ambassador Beach,Star BriteJack RudyUnit 228Investment-5-Case 1:11-cr-00007-MHT -WC Document 21 Filed 02/17/11 Page 5 of 12


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13-22/04/2004Ambassador Beach,Star BriteJack RudyUnit 230Investment13-312/28/2005212 Dahlia DriveEarthie FarmsMilissa Scott____________ ___________ __________________Holdings______________

13-405/09/2006Colonial Shores, UnitStar BriteJack Rudy109Investment14. On or about the dates listed below, PATRICIA ER V1N and MONTY ERV1Ncaused the sales proceeds of properties they held in the names of the nominees to be depositedinto Southern Realty's bank accounts:OVERT DATE OF PROPERTYNOMINEE TRUSTAMOUNTACT CHECK412/09/04AmbassadorStar Brite Investment$118,095.05_________ __________ Beach, Unit 22814-22/09/04AmbassadorStar Brite Investment$118,259.90_________ ___________ Beach, Unit 23014-311/01/0575 Fain StreetLife Line Holdings$54,761.3114-412/27/05212 Dahlia Drive Earthie Farms Holdings$65,774.9114-55/11/06Colonial Shores,Star Brite Investment$257,833.92Unit 10914-65/17/0680 NombergNebo Holdings$50,314.96_________Road15. On or about the dates and in the amounts listed below, PATRICIA ER VIN andMON TY ER V1N drew funds from Southern Realty's bank accounts to purchase Celadon BeachCondominium, Units 104 and 107:

OVERT ACTDATE OF CHECKAMOUNT512/11/2004$96,745.0015-25/6/2004$5,995.56-6-Case 1:11-cr-00007-MHT -WC Document 21 Filed 02/17/11 Page 6 of 12


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15-3I5/6/2004I$5,730.0616. On or about the dates and in the amounts listed below, PATRICIA E RV1N andMON TY ER VIN drew funds from Southern Realty's bank accounts to purchase Sunrise BeachCondominium, Unit 1805:

OVERT ACTDATE OF CHECKAMOUNT619/30/2005$150,000.0016-29/30/2005$125,000.0016-310/24/2005$75,000.0017. On or about the dates and in the amounts listed below, PATRICIA ER VIN and

MONTY ERVIN drew or caused to be drawn funds from Southern Realty's and SouthernRental's bank accounts to purchase Bella Riva Condominium, Unit 205, in the name of anominee, Island W aves, LLC:

OVERT ACTDATE OF CHECKAMOUNT713/26/2005$50,000.0017-25/16/2005$200,000.0017-35/16/2005$9,980.0017-45/19/2006$257,833.9217-56/21/2006$86,000.0017-67/31/2006$105,000.0017-711/7/2006$97,329.2217-812/11/2006$94,528.6918. From on o r about February 3, 2006 through on or about Fe bruary 10, 2006, as set

forth below, PATRICIA ERVIN structured and assisted in structuring a transaction with

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MidSouth Bank in D othan, Alabama by making and causing to be made ca sh deposits totaling$39,513 in individual amounts of $10,000 or less to avoid the filing of a Currency T ransactionReport:

DATE OF DEPOSITDEPOSIT AMOUNTFebruary 3, 2006$9,970February 6, 2006$9,847February 8, 2006$9,813February 10, 2006$9,88319. On or about April 20, 2006, PATRICIA E RVIN and MON TY E RVIN transferred

title of Sunrise Beach Condominium, Unit 1805, to "PC-Four #1805 Holdings Trust, MilissaScott trustee."

20. On or about August 14, 2006, PATRICIA E RVIN and M ONTY ERVIN signed anagreement forming Southern Rental Property Management LL C.

21. On or about August 18, 2006, PATRICIA E RVIN transferred title of CeladonBeach Condominium, Unit 104, to "Coastal Sail Holdings trust, Milissa Scott trustee."

22. On or about August 18, 2006, PATRICIA E RV1N transferred title of Ce ladonBeach Condominium, Unit 107, to "Blue Gulf Investments trust, Milissa Scott trustee."

23. On or about Decem ber 31, 2006, PATRICIA ERV 1N and MON TY ERVIN signeda document dissolving Southern Realty.

24. On or about April 11, 2007, PATRICIA E RVIN and MON TY E RVIN titled BellaRiva Condominium, Unit 205, in the name of a nominee, "Island Waves, LLC."

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25.On or about November 14, 2007, MONTY ERVIN attempted to pay tax liabilitiesto the IRS with a fictitious instrument in the amount of $1 million dollars and titled "Bond withPromissory Note for Offset for the Discharge of Claim Num ber 7105 5678 7180 3304 4764."

26. On or about September 29, 2008, MON TY ER VIN sent correspondence to theIRS in which he w arned the spe cial agent that the special agent may be in violation of federal lawfor criminally investigating defendants M ONTY ERV1N and P ATRICIA ERV IN.

27. On or about February 12,2009, MONTY ERV1N sent correspondence to the IRSin which he threatene d a special agent w ith "jail time," a "mon ey penalty" and "d ismissal fromservice" for speaking w ith MONT Y ERVIN'S friends, relatives, acquaintances, or anyone withwhom M ONTY ERVIN ever did business.

28. From D ecember 2008 through May 2009, the exact dates being unknown to theGrand Jury, PATRICIA ER VIN and M ONTY ERV1N required tenants to pay rent with silverinstead of United States currency.

All in violation of Title 18, United States C ode, Section 37 1.COUNT THREE(Tax Evasion)

The factual allegations contained in Paragraphs 1 through 7 of the Introduc tionSection of this Indictment are realleged and incorporated herein as if copied verbatim.

2.During the calendar year 2004, defendants PATRICIA ERV 1N and MONTYERV1N had and received taxable income; that upon said taxable income there w as owing to theUnited States of A merica an income tax; that w ell-knowing and believing the foregoing facts,defendants PATRICIA ERV1N an d MON TY ERV1N , on or about April 15, 2005, did willfullyattempt to evade and defeat the income tax due and ow ing by them to the United States of

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America for calendar year 2004 by failing to make an income tax return on or before April 15,2005, as required by law, to any proper officer of the Internal Rev enue Se rvice, by failing to payto the Internal Revenue Service the income taxes due a nd owing by them , and by, among otherthings, comm itting the following acts:

A. Directing third-parties to make payments to nominees;B. Placing income and assets into the names of nominees.

All in violation of Title 26, United States C ode, Section 7201 and T itle 18, United StatesCode, Section 2.

COUNT FOUR(Tax Evasion)The factual allegations contained in P aragraphs 1 through 7 of the Introduction

Section of this Indictment are realleged and incorporated herein as if copied verbatim.2.During the calendar year 2005, defendants PATRICIA ERV IIN and MON TYERVIN had and received taxable income; that upon said taxable income there was ow ing to the

United States of A merica an income tax; that w ell-knowing and believing the foregoing facts,defendants PATRICIA ERVIN and M ONTY ERV1N, on or about April 15, 2006, did willfullyattempt to evade and defeat the income tax due and ow ing by them to the United States ofAmerica for calendar year 2005 by failing to m ake an income tax return on or before April 15,2006, as required by law, to any proper officer of the Internal Reve nue Service , by failing to payto the Internal Revenue Service the income taxes due an d owing by them, and by, among otherthings, committing the following acts:

A. Directing third-parties to m ake paym ents to nom inees;B. Placing income and assets into the names of nominees.

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All in violation of Title 26, United States C ode, Section 720 1 and T itle 18, United StatesCode, Section 2.

COUNT FIVE(Tax Evasion)

1. The factual allegations contained in Paragraphs 1 through 7 of the IntroductionSection of this Indictment are realleged and incorporated herein as if copied verbatim.

2. During the calendar year 2006, defendants PATRICIA ERV IN and MO NTYERV1N had and received taxable income; that upon said taxable income there wa s owing to theUnited States of A merica an income tax; that w ell-knowing and believing the foregoing facts,defendan ts PATRICIA ER V1N and M ONT Y ERV 1N, on or about April 17, 2007, did willfullyattempt to evade and defeat the income tax due and ow ing by them to the United States ofAmerica for calendar year 2006 by failing to m ake an income tax return on or before April 17,2007, as required by law, to any proper officer of the Internal Reve nue Service , by failing to payto the Internal Revenue Service the income taxes due an d owing by them, and by, among otherthings, committing the following acts:

A. Directing third-parties to m ake paym ents to nom inees;B. Placing income and assets into the names of nominees.

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All in violation of Title 26, United States C ode, Section 7201 and T itle 18, United StatesCode, Section 2.

A TRUE BILL:

VBrent WoodallAssistant United States Attorney

Michael BotelerJustin K. GelfandTrial AttorneysUnited States De partment of JusticeTax Division

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03-21-11 monty ervin indictment

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