FEB 17 2011
CLERK
U, S. DISTRICT COURT
MIDDLE DIST. OF ALA.
V.
PATRICIA ERVIN
and
MONTY ERVIN
Defendants
The Grand Jury charges that:
FILED,
IN THE DISTRICT COURT OF THE UNITED STATES
FOR THE MIDDLE DISTRICT OF ALABAMA
SOUTHERN DIVISION
UNITED STATES OF AMERICA
CR. 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
INTRODUCTION
At times relevant to this Indictment:
1.
PATRICIA ERV1N and MONTY ERV1N, defendants herein, were married, and
resided in Dothan, Alabama, within the Middle District of Alabama.
2.
Between 1997 and 2006, PATRICIA ERVIN and MONTY ERVIN owned and
managed Southern Realty & Property Management, LLC ("Southern Realty"), a property
management company located at 400 West Washington Street, Dothan, Alabama. Southern
Realty received substantial amounts of rental income each month, including cash payments. On
or about December 31, 2006, PATRICIA ERV1N and MONTY ERVIN dissolved Southern
Realty. Southern Realty did not file a U.S. Corporation Income Tax Return, Form 1120, for the
2005 and 2006 tax years.
3.
On or about August 14, 2006, PATRICIA ERV1N and MONTY ERVIN signed an
agreement that created Southern Rental Property Management LLC, a property management
company located at 400 West Washington Street, Dothan, Alabama. PATRICIA ERVIN and
MONTY 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
4.
On or about November 6, 2006, PATRICIA ERVIN and MONTY ERVIN
organized Island Waves, LLC, in New Mexico. PATRICIA ERVIN and MONTY ERVIN were
the managing members of Island Waves, LLC.
5.
PATRICIA ERVIN and MONTY ERV1N have not filed a U.S. Individual Income
Tax Return, IRS Form 1040, from 2000 through 2008.
6.
Title 31, United States Code, Section
5313
and the regulations promulgated
thereunder require any financial institution that engages in a currency transaction (e.g., a deposit
or withdrawal) in excess of $10,000 with a customer to report the transaction to the United States
Department of the Treasury by filing a Currency Transaction Report ("CTR"). Structuring cash
deposits to avoid triggering the filing of a CTR by a financial institution is prohibited by Title 31,
United States Code, Section
5324(a).
7.
The Internal Revenue Service ("IRS") was an agency of the United States
Department of the Treasury responsible for enforcing and administering the tax laws of the
United States and collecting taxes owed to the United States.
COUNT ONE
(Structuring Transactions to Avoid Reporting Requirements)
1.
The factual allegations contained in Paragraphs 1 through 7 of the Introduction
Section of this Indictment are realleged and incorporated herein as if copied verbatim.
2.
From on or about February 3,2006 through on or about February 10, 2006, as set
forth below, in Houston County, in the Middle District of Alabama, defendant PATRICIA
ERVIN did knowingly and for the purpose of evading the reporting requirements of Section
5313(a) of Title 31, United States Code, and the regulations promulgated thereunder, structure,
assist in structuring, and attempt to structure a transaction with a domestic financial institution, to
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wit, MidSouth Bank in Dothan, Alabama. During that time period, PATRICIA ERV1N made,
and caused to be made, cash deposits totaling $39,513 in individual amounts of $10,000 or less
to avoid the filing of a Currency Transaction Report:
Paragraph
Date of Deposit
Deposit Amount
3.
February 3, 2006
$9,970
4.
February 6, 2006
$9,847
5.
February 8, 2006
$9,813
6.
February 10,2006
$9,883
All 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 Introduction
Section of this Indictment are realleged and incorporated hereinas if copied verbatim.
2.
From on or about November 1, 2000, the exact date being unknown to the Grand
Jury, and continuing to the date of this Indictment, in the Middle District of Alabama and
elsewhere, defendants PATRICIA ERVIN and MONTY ERV1N unlawfully, voluntarily,
intentionally, and knowingly did conspire, combine, confederate, and agree together and with
each other, to defraud the United States for the purpose of impeding, impairing, obstructing, and
defeating the lawful government functions of the IRS in the ascertainment, computation,
assessment, and collection of federal income taxes.
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MANNER AND MEANS
3.
To accomplish the objects of this scheme, PATRICIA ERV1N and MONTY
ERV1N used the following manners and means, among others:
4.
PATRICIA ERV1N and MONTY ERV1N would and did purchase, hold, and sell
property in the names of nominees.
5.
PATRICIA ERV1N and MONTY ERV1N would and did cause to be prepared
false notarized warranty deeds to facilitate the transfer of property held in the names of
nominees.
6.
PATRICIA ERV1N and MONTY ERVIN would and did direct rental income
from 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, cash
deposits into Southern Realty's bank accounts.
8.
PATRICIA ERV1N and MONTY ERVIN would and did take steps to obstruct the
IRS in its attempt to assess and collect federal income taxes including sending correspondence
intended to impede the IRS in its investigation.
OVERT ACTS
9.
In furtherance of the conspiracy, and to effect the objects thereof, PATRICIA
ERV1N and MONTY ERV1N committed the overt acts listed below, among others, within the
Middle District of Alabama, and elsewhere:
10.
On or about the dates listed below, PATRICIA ERVIN and MONTY ERVIN
purchased and placed assets in the names of the nominees:
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Case 1:11-cr-00007-MHT -WC Document 21 Filed 02/17/11 Page 4 of 12
OVERT
DATE
PROPERTY
NOMINEE
NOMINEE
ACT
TRUST
TRUSTEE
10-1
11/02/00
75
Fain Street
Life Line
Jeff Hargett
____________ ___________ ___________________
Holdings
______________
10-2
12/06/00
Colonial Shores, Unit
Star Brite
Jack Rudy
109
Investment
10-3
2/14/0 1
Ambassador Beach,
Star Brite
Jack Rudy
Unit 228
Investment
10-4
2/14/0 1
Ambassador Beach,
Star Brite
Jack Rudy
Unit 230
Investment
10-5
6/21/01
80 Nomberg Road
Nebo Holdings
M.C. Spann
10-6
10/30/02
212 Dahlia Drive
Earthie Farms
Milissa Scott
_____________ ____________ ____________________
Holdings
_______________
11.
On or about June
15,
2001, MONTY ERVIN entered into a management
agreement that directed rental income derived from properties owned by Nebo Holdings Trust to
be collected by Southern Realty.
12.
On or about July 3, 2002, MONTY BRYN entered into a management agreement
that directed rental income derived from properties owned by Earthie Farm Holdings Trust to be
collected by Southern Realty.
13.
On or about the dates listed below, PATRICIA ERV1N and MONTY ERVIN
caused to be prepared false notarized warranty deeds to facilitate the transfer of property held in
the names of the nominees:
OVERT
DATE
PROPERTY
NOMINEE
NOMINEE
ACT
TRUST
TRUSTEE
13-1
2/04/2004
Ambassador Beach,
Star Brite
Jack Rudy
Unit 228
Investment
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13-2
2/04/2004
Ambassador Beach,
Star Brite
Jack Rudy
Unit 230
Investment
13-3
12/28/2005
212 Dahlia Drive
Earthie Farms
Milissa Scott
____________ ___________ __________________
Holdings
______________
13-4
05/09/2006
Colonial Shores, Unit
Star Brite
Jack Rudy
109
Investment
14.
On or about the dates listed below, PATRICIA ERV1N and MONTY ERV1N
caused the sales proceeds of properties they held in the names of the nominees to be deposited
into Southern Realty's bank accounts:
OVERT DATE OF PROPERTY
NOMINEE TRUST
AMOUNT
ACT CHECK
14-1
2/09/04
Ambassador
Star Brite Investment
$118,095.05
_________ __________ Beach, Unit 228
14-2
2/09/04
Ambassador
Star Brite Investment
$118,259.90
_________ ___________ Beach, Unit 230
14-3
11/01/05
75 Fain Street
Life Line Holdings
$54,761.31
14-4
12/27/05
212 Dahlia Drive Earthie Farms Holdings
$65,774.91
14-5
5/11/06
Colonial Shores,
Star Brite Investment
$257,833.92
Unit 109
14-6
5/17/06
80 Nomberg
Nebo Holdings
$50,314.96
_________
Road
15.
On or about the dates and in the amounts listed below, PATRICIA ERVIN and
MONTY ERV1N drew funds from Southern Realty's bank accounts to purchase Celadon Beach
Condominium, Units 104 and 107:
OVERT ACT
DATE OF CHECK
AMOUNT
15-1
2/11/2004
$96,745.00
15-2
5/6/2004
$5,995.56
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15-3
I
5/6/2004
I
$5,730.06
16.
On or about the dates and in the amounts listed below, PATRICIA ERV1N and
MONTY ERVIN drew funds from Southern Realty's bank accounts to purchase Sunrise Beach
Condominium, Unit 1805:
OVERT ACT
DATE OF CHECK
AMOUNT
16-1
9/30/2005
$150,000.00
16-2
9/30/2005
$125,000.00
16-3
10/24/2005
$75,000.00
17.
On or about the dates and in the amounts listed below, PATRICIA ERVIN and
MONTY ERVIN drew or caused to be drawn funds from Southern Realty's and Southern
Rental's bank accounts to purchase Bella Riva Condominium, Unit 205, in the name of a
nominee, Island Waves, LLC:
OVERT ACT
DATE OF CHECK
AMOUNT
17-1
3/26/2005
$50,000.00
17-2
5/16/2005
$200,000.00
17-3
5/16/2005
$9,980.00
17-4
5/19/2006
$257,833.92
17-5
6/21/2006
$86,000.00
17-6
7/31/2006
$105,000.00
17-7
11/7/2006
$97,329.22
17-8
12/11/2006
$94,528.69
18.
From on or about February 3, 2006 through on or about February 10, 2006, as set
forth below, PATRICIA ERVIN structured and assisted in structuring a transaction with
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Case 1:11-cr-00007-MHT -WC Document 21 Filed 02/17/11 Page 7 of 12
MidSouth Bank in Dothan, Alabama by making and causing to be made cash deposits totaling
$39,513 in individual amounts of $10,000 or less to avoid the filing of a Currency Transaction
Report:
DATE OF DEPOSIT
DEPOSIT AMOUNT
February 3, 2006
$9,970
February 6, 2006
$9,847
February 8, 2006
$9,813
February 10, 2006
$9,883
19.
On or about April 20, 2006, PATRICIA ERVIN and MONTY ERVIN transferred
title of Sunrise Beach Condominium, Unit
1805,
to "PC-Four #1805 Holdings Trust, Milissa
Scott trustee."
20.
On or about August 14, 2006, PATRICIA ERVIN and MONTY ERVIN signed an
agreement forming Southern Rental Property Management LLC.
21.
On or about August 18, 2006, PATRICIA ERVIN transferred title of Celadon
Beach Condominium, Unit 104, to "Coastal Sail Holdings trust, Milissa Scott trustee."
22.
On or about August 18, 2006, PATRICIA ERV1N transferred title of Celadon
Beach Condominium, Unit 107, to "Blue Gulf Investments trust, Milissa Scott trustee."
23.
On or about December 31, 2006, PATRICIA ERV1N and MONTY ERVIN signed
a document dissolving Southern Realty.
24.
On or about April 11, 2007, PATRICIA ERVIN and MONTY ERVIN titled Bella
Riva 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 liabilities
to the IRS with a fictitious instrument in the amount of $1 million dollars and titled "Bond with
Promissory Note for Offset for the Discharge of Claim Number 7105
5678
7180 3304 4764."
26.
On or about September 29, 2008, MONTY ERVIN sent correspondence to the
IRS in which he warned the special agent that the special agent may be in violation of federal law
for criminally investigating defendants MONTY ERV1N and PATRICIA ERVIN.
27.
On or about February 12,2009, MONTY ERV1N sent correspondence to the IRS
in which he threatened a special agent with "jail time," a "money penalty" and "dismissal from
service" for speaking with MONTY ERVIN'S friends, relatives, acquaintances, or anyone with
whom MONTY ERVIN ever did business.
28.
From December 2008 through May 2009, the exact dates being unknown to the
Grand Jury, PATRICIA ERVIN and MONTY ERV1N required tenants to pay rent with silver
instead of United States currency.
All in violation of Title 18, United States Code, Section 371.
COUNT THREE
(Tax Evasion)
The factual allegations contained in Paragraphs 1 through 7 of the Introduction
Section of this Indictment are realleged and incorporated herein as if copied verbatim.
2.
During the calendar year 2004, defendants PATRICIA ERV1N and MONTY
ERV1N had and received taxable income; that upon said taxable income there was owing to the
United States of America an income tax; that well-knowing and believing the foregoing facts,
defendants PATRICIA ERV1N and MONTY ERV1N, on or about April
15,
2005, did willfully
attempt to evade and defeat the income tax due and owing 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 Revenue Service, by failing to pay
to the Internal Revenue Service the income taxes due and owing by them, and by, among other
things, committing 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 Code, Section 7201 and Title 18, United States
Code, Section 2.
COUNT FOUR
(Tax Evasion)
The factual allegations contained in Paragraphs 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 ERVIIN and MONTY
ERVIN had and received taxable income; that upon said taxable income there was owing to the
United States of America an income tax; that well-knowing and believing the foregoing facts,
defendants PATRICIA ERVIN and MONTY ERV1N, on or about April 15, 2006, did willfully
attempt to evade and defeat the income tax due and owing by them to the United States of
America for calendar year 2005 by failing to make an income tax return on or before April 15,
2006, as required by law, to any proper officer of the Internal Revenue Service, by failing to pay
to the Internal Revenue Service the income taxes due and owing by them, and by, among other
things, committing the following acts:
A.
Directing third-parties to make payments to nominees;
B.
Placing income and assets into the names of nominees.
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All in violation of Title 26, United States Code, Section 7201 and Title 18, United States
Code, Section 2.
COUNT FIVE
(Tax Evasion)
1.
The factual allegations contained in Paragraphs 1 through 7 of the Introduction
Section of this Indictment are realleged and incorporated herein as if copied verbatim.
2.
During the calendar year 2006, defendants PATRICIA ERVIN and MONTY
ERV1N had and received taxable income; that upon said taxable income there was owing to the
United States of America an income tax; that well-knowing and believing the foregoing facts,
defendants PATRICIA ERV1N and MONTY ERV1N, on or about April 17, 2007, did willfully
attempt to evade and defeat the income tax due and owing by them to the United States of
America for calendar year 2006 by failing to make an income tax return on or before April 17,
2007, as required by law, to any proper officer of the Internal Revenue Service, by failing to pay
to the Internal Revenue Service the income taxes due and owing by them, and by, among other
things, committing the following acts:
A.
Directing third-parties to make payments to nominees;
B.
Placing income and assets into the names of nominees.
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All in violation of Title 26, United States Code, Section 7201 and Title 18, United States
Code, Section 2.
A TRUE BILL:
V
Brent Woodall
Assistant United States Attorney
Michael Boteler
Justin K. Gelfand
Trial Attorneys
United States Department of Justice
Tax Division
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