In a troubling case of financial deception, Michelle O’Connor, a Kansas woman, has been charged with tax evasion and wire fraud by a federal grand jury in Kansas City.
The charges relate to her activities between 2008 and 2020, during which she allegedly evaded paying hundreds of thousands of dollars in taxes while engaging in fraudulent financial activities.
The Tax Evasion Scheme
Michelle O’Connor, a resident of Louisburg, Kansas, operated a real estate business in the Kansas City metro area.
According to the indictment, between 2008 and 2015, O’Connor filed federal income tax returns that self-reported approximately $300,000 in taxes owed. Despite acknowledging the debt, O’Connor failed to make any payments.
The IRS audited her tax returns for the years 2008 and 2009 in 2011 and found that O’Connor had improperly claimed tens of thousands of dollars in personal expenses as charitable deductions.
These deductions were allegedly linked to the “Church of Revelation and Love,” a religious entity O’Connor and her family had created.
Following this audit, the IRS imposed over $40,000 in additional taxes on her.
Avoiding IRS Collections Efforts
From 2011 to 2023, the IRS attempted to collect the outstanding tax debt, sending O’Connor more than 50 notices. However, she allegedly took several actions to avoid paying the taxes owed.
These included filing three false and frivolous bankruptcy petitions, purchasing approximately $250,000 worth of cashier’s checks to reduce her bank balances, and using her business accounts to pay for personal expenses.
By 2020, her tax debt had ballooned to nearly half a million dollars, including penalties and interest.
Fraudulent COVID-19 Relief Applications
In addition to her ongoing tax evasion, O’Connor is accused of submitting fraudulent applications for the COVID-19 Economic Injury Disaster Loan (EIDL) program in 2020.
The EIDL program allowed small businesses to apply for loans of up to $150,000 to cover working capital.
O’Connor allegedly submitted 34 fraudulent applications on behalf of her real estate business and seven other corporate entities she created specifically for the purpose of maximizing her EIDL loans.
As a result, she received nearly $300,000 in loans, which she is accused of using for personal expenses, including $115,000 to purchase cryptocurrency.
Potential Penalties and Legal Proceedings
If convicted, Michelle O’Connor faces severe penalties.
For tax evasion, she could be sentenced to up to five years in prison, while each count of wire fraud could carry a maximum sentence of 20 years in prison.
The final sentence will be determined by a federal district court judge, who will consider the U.S. Sentencing Guidelines and other statutory factors.
The case is being investigated by IRS Criminal Investigation, and the prosecution is being handled by trial attorneys Dominick Giovanniello and Robert Kemins of the Justice Department’s Tax Division.
It’s important to note that an indictment is simply an allegation, and O’Connor is presumed innocent until proven guilty in court.