Date: 07-28-2015

Case Style: United States of America v. Michael E. Ho

Case Number: 1:14-cr-00429-CMA

Judge: Christine M. Arguello

Court: United States District Court for the District of Colorado (Denver County)

Plaintiff's Attorney: Tim R. Neff

Defendant's Attorney: Amanda B. Cruser

Description: Denver, CO - Grand Junction business owner pleads guilty to income tax evasion

Michael E. Ho, age 69, of Grand Junction, Colorado, pled guilty before U.S. District Court Judge Christine M. Arguello to income tax evasion, United States Attorney John Walsh, IRS Criminal Investigation Special Agent in Charge Steven Osborne announced. Judge Arguello is scheduled to sentence Ho on October 28, 2015 at 3:00 p.m. Ho was indicted by a federal grand jury in Denver on October 28, 2014, and was arrested on November 13, 2014.

According to the indictment and plea agreement, Ho owned and managed a dental clinic formerly known as Skyline Dental located in Grand Junction, Colorado from approximately 1999 through at least 2004 in which he employed licensed dentists to provide dental services to patients. Skyline Dental operated as a “d/b/a” for the parent corporation “Five-O Enterprises” which HO owned and controlled starting in the year 2001. In February of 2004, the State Board of Dental Examiners enjoined the Ho from owning and operating Skyline Dental Clinic based as Ho was never licensed to practice dentistry and the State Board took the position that only licensed dentists are permitted to own Dental Clinics.

Ho sold the practice in December 2004 to a licensed Dentist and Ho was hired to manage the clinic. In 2006, Ho and the owner had a business dispute which resulted in the dentist defaulting on his purchase agreement with Ho. Ho then sold the practice to a different dentist in November of 2006 for $3.5 million hereby Ho was paid a salary for managing the dental practice. In 2010, the Dentist rescinded his contracts with H. Ho in turn converted Skyline Dental clinic to a non-profit corporation, Colorado Community Dental Services “CCDS”, which allowed it to operate under state law without a dentist as its owner An Asset Purchase Agreement was executed between Five-O Enterprises and CCDS in the amount of $2 million. HO continued to manage Colorado Community Dental Services but did not receive a salary and did not hold a position on the Board of Directors.

During this same period, Ho also operated Preventative Dental as a d/b/a of Five-O Enterprises which sold dental plans to individuals and were then able to receive discounted dental services by the designated provider, Skyline Dental and later Colorado Community Dental Services. Ho received the income from Preventative Dental.

Ho evaded income tax due and owing by committing affirmative acts of evasion. Between 2006 and 2011, the Government has determined that $235,450 is the total tax due and owing by Ho. In an attempt to evade assessment of taxes by the IRS, Ho took a series of steps to include, but are not limited to, utilized multiple bank accounts (a personal account and business accounts) which he commingled funds from his various income producing activities making the assessment of tax difficult; he received interest income from the sale of Skyline Dental and did not report the interest income to his accountant in the years 2008 and 2009 when he received interest income of $156,005 and $67,225, respectively; he did not report the income from the sale of discount dental plans to his accountant and thus the income from Preventative Dental was not reported on his tax returns; he deposited cash receipts from Skyline Dental and Colorado Community Dental Services to his personal bank accounts in 2010 and 2011 and did not report the income on his tax returns.

Ho pled to one count of income tax evasion which carries a penalty of not more than 5 years in federal prison, and a fine of up to $250,000 per count.

This case was investigated by Internal Revenue Service.

Outcome: See above

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