On July 20, 2010, in Scranton, Pa., Frank and Salli Ann Peperno, husband and wife from Old Forge, were sentenced on charges of tax evasion. Frank Peperno was sentenced to 43 months in prison; Salli Ann Peperno was sentenced to two years probation with six months of home confinement. According to court documents, Salli Ann was charged with conspiracy to commit tax evasion in conjunction with a gym, Maximum Health & Fitness, owned and operated by herself and her husband. Frank Peperno was charged with tax evasion and mail fraud. Frank Peperno, a former licensed stockbroker, unlawfully converted monies belonging to clients.
P.O. Box 372
Tennent, NJ 07763
Financial investigators and IRS Criminal Investigation Special Agents most frequently utilize a technique known as the “specific item method of proof” when building a tax fraud case. This method allows the investigators to present proof that an individual suspect received or disposed of income from a particular source(s) and failed to report the income for tax purposes. The source(s) of income may be legal, illegal or a combination of both. Such proof is referred to as evidence and will be designated as either direct or circumstantial in nature. Whenever proof is obtained by means of the specific item technique it is referred to as direct proof. There is an uninterrupted connection between the proof or evidence presented and a financial matter or transaction. In other words, a “paper trail” of evidence exists that can be documented and/or illustrated via exhibits and testimony, then presented to a jury as necessary.
It is rare that tax fraud investigators or special agents are called upon to reconstruct a complete set of financial books and records to determine whether a tax crime has occurred. More commonly the analysis of existing financial records is the investigative technique employed. Such searches of business books and records are undertaken in an attempt to link financial transactions to criminal activity. The “paper trail” followed when reviewing accounting books and records is sometimes long and winding, but ultimately culminates with a logical conclusion. Unfortunately for the tax cheat, the results are oftentimes those employing deceit and deception.