Case Style: United States of America v. Elaine Martin
Case Number: 1:13-cr-00065-BLW
Judge: B. Lynn Winmill
Court: United States District Court for the District of Idaho (Ada County)
Plaintiff's Attorney: Gregory Bernstein and George William Breitsameter
Defendant's Attorney: Christian Collins
Description: Boise, ID - Treasure Valley Contractor Pleads Guilty and is Resentenced
Elaine Martin, 69, of Meridian, Idaho, the former president and majority stockholder of MarCon, Inc., pleaded guilty to one count of making and subscribing a false tax return before Chief U.S. District Judge B. Lynn Winmill. Following the entry of her plea, Judge Winmill sentenced her for the tax conviction, and resentenced her for wire fraud, mail fraud, and interstate transportation of property taken by fraud convictions. Judge Winmill sentenced Martin to 60 months’ imprisonment on the fraud convictions and 24 months’ imprisonment on the tax conviction, those sentences to run concurrently. Judge Winmill further ordered Martin to pay restitution to the IRS and Idaho Department of Transportation in the amount of $131,400.48, costs of prosecution in the amount of $22,859.60, and a forfeiture money judgment of $3,084,038.05, amounts Martin previously paid.
Previously, on September 19, 2013, after a 26-day trial, a federal jury convicted Martin of 22 criminal counts, including four counts of filing false individual and corporate tax returns, two counts of conspiracy to defraud the United States, five counts of wire fraud, five counts of mail fraud, one count of false statement, three counts of interstate transportation of property taken by fraud, one count of conspiracy to obstruct justice and one count of obstruction of justice. On February 24, 2014, Judge Winmill sentenced Martin to 24 months’ imprisonment on the tax, conspiracy, false statements, and obstruction counts, and 84 months’ imprisonment on the wire fraud, mail fraud, and interstate transportation of property taken by fraud counts, with these sentences to run concurrently. Further, he ordered Martin to pay restitution to the IRS and Idaho Department of Transportation in the amount of $131,400.48, costs of prosecution in the amount of $22,859.60, and a forfeiture money judgment of $3,084,038.05. On August 7, 2015, the United States Court of Appeals for the Ninth Circuit vacated Martin’s sentence and her tax convictions, and remanded the case for further proceedings, including resentencing on the fraud charges.
In the plea agreement, Martin admitted that she willfully signed false and fraudulent Form 1120S income tax returns for Marcon, Inc., a construction company that was located in Meridian, Idaho, for tax years 2005 and 2006. Martin also admitted that she caused these tax returns to be false and fraudulent by keeping the unreported income off of the books, and that she falsely told an IRS Revenue Agent, who was conducting a civil audit of Marcon, that all of Marcon’s gross receipts were deposited into Marcon’s Wells Fargo operating account. In fact, as Martin well knew at the time, she had and was causing gross receipts from the used material sales to be diverted and secretly deposited into Marcon’s Bank of Cascades account. Martin purposefully did not provide records for Marcon’s Bank of Cascades account to the individual who prepared her and Marcon’s tax returns for tax years 2005 and 2006. Martin admitted that the total tax loss was $73,678.
Further, Martin admitted in the plea agreement to her participation in the fraud counts, including the conspiracy to defraud the SBA 8(a) Program, and the U.S. Department of Transportation, Disadvantaged Business Enterprise (“DBE”) Program, by submitting fraudulent tax returns and making false statements concerning her finances that caused Marcon to qualify and/or remain eligible for these programs. Martin further admitted that her behavior affected the award of contracts pursuant to the 8(a) Program and DBE Programs. For example, Marcon’s status as an Idaho DBE affected how and what DBE goals were set for particular construction projects, and helped Marcon maintain a virtual monopoly in its geographic region between 2000 and 2006. Marcon participated in the SBA 8(a) Program pursuant to direct negotiations with the awarding agency, rather than through fair and open competition. Martin admitted that during the relevant time period, she would not have been awarded the 33 contracts at issue in the case but for the fraud.
As part of the plea agreement that Martin entered into today, she waived her right to further appeal.
The case was investigated by Internal Revenue Service-Criminal Investigation, Federal Bureau of Investigation, the Office of Inspector General for the U.S. Small Business Administration, and the Office of Inspector General for the U.S. Department of Transportation.
Today's announcement is part of efforts underway by President Obama's Financial Fraud Enforcement Task Force (FFETF), which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.
Outcome: Elaine Martin to Serve 60 Months in Prison and to pay restitution to the IRS and Idaho Department of Transportation in the amount of $131,400.48, costs of prosecution in the amount of $22,859.60, and a forfeiture money judgment of $3,084,038.05