COLORADO
A federal jury found a businessman guilty of failing to disclose more than $2 million in income to the IRS that he earned as the owner and president of National Rebate Fund Inc., according to officials.
The jury found Timothy John Stubbs guilty of two counts of tax evasion, three counts of failing to file an income tax return and three counts of failing to file a corporate income tax return, officials said.
The evidence at trial indicated that Stubbs failed to file his own tax returns or corporate tax returns on behalf of National Rebate Fund for 2005, 2006 and 2007. He didn’t file an individual income tax return since 1992 or paid income taxes since 1993, the court evidence showed.
During 2005 through 2007, the Grand Junction-based National Rebate Fund contracted with merchants of energy-efficient and other products to provide third-party rebates to retail customers throughout the United States.
The company made more than $7 million in gross receipts between 2005 and 2007, officials said.
Stubbs earned more than $2 million in taxable income from National Rebate Fund during those same years, according to officials.
In an attempt to evade his taxes, officials said Stubbs disguised personal income that he received from the National Rebate Fund by using business accounts to pay more than $700,000 in personal expenses during 2005, 2006 and 2007.
During those years, Stubbs purchased real estate valued at more than $2.9 million in Grand Junction, Crested Butte, Colorado, and Kailua-Kona, Hawaii. He also acquired more than $370,000 in gold and silver in 2007, according to authorities.
Between April 2004 and October 2007, officials said Stubbs’ net worth increased by more than $3 million.
At sentencing, Stubbs faces a statutory maximum sentence of five years in prison and a maximum fine of $250,000 for each count of tax evasion, officials said. Stubbs is also facing up to a year in prison and a $100,000 fine for each count of failure to file an income tax return, officials said.
U.S. District Judge Christine M. Arguello of Colorado set Stubbs’ sentencing for Dec. 17.