Old Saybrook business owner pleads guilty to tax crimes prior to trial
Old Saybrook businessman David Adams pleaded guilty to six tax-related crimes Tuesday as he was scheduled to go on trial in U.S. District Court in Hartford.
Adams, 56, of 5 Scott Road, East Lyme, who is free on a $500,000 bond, faces a maximum sentence of more than 20 years in prison when he is sentenced Jan. 11, 2018, by U.S. District Juge Vanessa L. Bryant. As of October 2016, he owed more than $4.7 million in back taxes, interest and penalties for tax years 2002, 2006, 2007, 2008, 2009, 2011, and 2012, according to the government, and interest and penalties have continued to accrue since that time.
Adams is the founder of Flowers USA and another online floral business, both of which he has sold. He is a principal of Saybrook Realty Partners, which has an interest in the Saybrook Junction plaza near the town's train station.
On December 6, 2016, a grand jury returned a superseding indictment charging Adams with two counts of tax evasion, three counts of making and subscribing a false tax return, and one count of attempting to interfere with the administration of the IRS laws.
"Over the weekend, after thinking about it, he decided it was in his best interest to plead guilty to the indictment, expecially given the fact that we couldn't reach any plea agreement with the government," said his attorney, Drzislav "Dado" Coric, whose firm is in New London.
Once Adams entered his guilty plea, U.S. Assistant Attorney Susan L. Wines moved to remand Adams into custody for the second time in two weeks, Coric said. U.S. Magisrate Robert A. Richardson denied the government's motion after Coric said he argued that incarcerating Adams would be punitive, since he is not a flight risk due to his strong community and family ties and the fact that he's not a flight risk or posing a danger to any person or the community.
Adams filed a tax return for 2009 claiming he paid $550,000 in estimated tax payments when in fact he paid only $425,000, according to the government.
In 2011 and 2012, he failed to tell the accountant who prepared his tax return that he received $4.7 million for selling one of his businesses and that he paid more in estimated taxes than he actually had. That same year, he allegedly told an Internal Revenue Service officer who was trying to collect back taxes that his efforts to obtain money to pay his back taxes had not been "panning out."
In 2012, the government said Adams failed to declare the $4.7 million he received and falsely stated he paid $220,000 in estimated taxes, when in fact, he had only paid $100,000.
In 2013, the government alleges Adams failed to tell the accountant he received $1.3 million during the year and filed a false tax return stating he had $0 taxable income.
The government said that in 1982, 1984, and continuing from 1996 through 2016, he undertook a course of conduct to inhibit the IRS's efforts to collect back taxes from him.
"In total, Adams engaged in a more than 16-year effort to inhibit the IRS's efforts to collect back taxes from him," according to the government.
Adams' prior convictions for willful failure to file tax returns for tax years 1984 and 1985 will be considered at the sentencing, along with several other factors.
Each tax evasion offense carries a maximum term of imprisonment of five years, each count of filing a false tax return carries a maximum term of imprisonment three years, and the interference charge carries a maximum term of imprisonment of three years.
The case was investigated by the Internal Revenue Service – Criminal Investigation Division. The case is being prosecuted by Assistant U.S. Attorneys Wines and Jennifer R. Laraia. Coric and attorney William T. Koch Jr. represented Adams.
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