Three indicted in Texas tax fraud scheme

| Thursday, July 26, 2007

Three Houston-area residents have been indicted for their roles in a scheme to defraud the IRS out of excise taxes involving kerosene that was later sold as diesel fuel.

According to the U.S. Department of Justice, the three worked for fuel distributor Mid-Coast International.

Between 2002 and 2003, the company allegedly purchased $10 million worth of kerosene, saying it was planning to export it to Mexico, thus excluding it from excise taxes. The company then allegedly re-mixed the kerosene into diesel and sold it at retail outlets in Texas.

The three are also accused of forging documents that allegedly stated the fuel was going to Mexico.

Between them, the three are charged with nine counts of attempting to defraud the U.S. government of excise taxes. The charges carry a maximum penalty of five years in prison and a $250,000 fine.

Comments