Prepaid Cellphone Dealer Pleads to Tax Evasion

A press release from the U.S. Attorney’s Office:


CHICAGO — A business owner of Chicago based prepaid phone stores pleaded guilty yesterday to federal income tax fraud, admitting that he filed four false tax returns, resulting in a tax loss to the United States of more than $174,093, beginning in 2009.

The defendant, Ken Leon, 47, of Westmont, pleaded guilty to one count of filing a false individual federal income tax return in 2012 at his arraignment in U.S. District Court after he was charged in a single-count information filed late last month.  U.S. District Court Judge Sara L. Ellis set sentencing for June 25, 2015.

Leon was the owner of Ezbuyphones, a prepaid phone business with three Chicago stores, which sold cellphones and accessories and prepaid cell phone minutes and provided electronic bill-paying services.

Beginning no later than 2009 and continuing through 2012, the defendant received from his business significant income that he failed to report to the Internal Revenue Service.

He received income from his business in two ways; he periodically made cash and check deposits from his business into his personal bank accounts and he paid personal expenses from his corporate bank account, such as mortgage payments for his residence and credit card expenditures on travel, clothing, groceries, and restaurants.

In pleading guilty, Leon admitted that he caused a federal tax loss of $174,093 by filing false tax returns for 2009 – 2012.  Leon did not provide accurate information to an accountant who prepared his returns.

Specifically, he reported that he had earned only slightly more than $110,000 for the year 2012, when, in fact, his wages and compensation totaled approximately $347,546.

Leon faces a maximum sentence of three years in prison and a $250,000 fine, and his plea agreement contemplates an advisory United States Sentencing Guidelines range of 12 to 18 months in prison.

Zachary Fardon

Zachary Fardon

The guilty plea was announced by Zachary T. Fardon, United States Attorney for the Northern District of Illinois, Robert J. Holley, Special Agent in Charge of the Chicago Division of the Federal Bureau of Investigation, and Stephen Boyd, Special Agent in Charge of the Internal Revenue Service Criminal Investigation Division in Chicago.

Federal tax law requires that U.S. taxpayers pay taxes on all income earned worldwide and to report certain foreign financial accounts.

The government is being represented by Assistant U.S. Attorney William Ridgway.

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