Landmark Tax Group

Businessman Sentenced In $14M Fraud Scheme

On July 29, 2014, in Birmingham, Alabama, Joseph Shane Terry, was sentenced to 108 months in prison and ordered to forfeit $1,019,761. Terry, sole owner of Government Technical Services (GTS), pleaded guilty in August 2013 to wire fraud, false statements to the Small Business Administration, false statements on loan applications and money laundering. According to Terry’s plea agreement, he applied for, obtained  and maintained small disadvantaged or minority-owned business status from the SBA by submitting fraudulent tax returns. Having the special status with the SBA enabled his company, GTS, to bid on and win government contracts specifically set aside for small disadvantaged businesses. Terry submitted personal and corporate returns to the SBA for the tax years 2002 through 2007 to show he was current on filing his taxes, but he had never filed the returns with the IRS. In all, Terry employed the fraudulent scheme to obtain more than $14 million in government contracts. Terry pleaded guilty to five wire fraud counts that involved separate electronic fund transfers totaling more than $500,000 from the contract. Terry also induced banks to make mortgage loans totaling $480,000 based on his false tax returns and other false financial documents. In 2008 he induced his then-girlfriend to apply for a loan and supplied documents falsely claiming that GTS employed her. Terry then used the fraudulently obtained loan proceeds for his own purpose. (Source: IRS)

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