United States Attorney John C. Richter Western District of Oklahoma Thursday, February 6, 2008 CONTACT: Bob Troester                 405/553-8999

OWNERS OF UNDERGROUND CABLING COMPANY CHARGED IN TAX CONSPIRACY

Oklahoma City, Oklahoma – John C. Richter, United States Attorney for the Western District of Oklahoma, announced today that JAMES E. NEWMAN, 53, QUANAH K. NEWMAN, 53, and GLENDA J. ROBERTSON, 55, all of Oklahoma City, have been charged by a federal grand jury with conspiring to conceal their income from the government for the purpose of avoiding their tax obligations.  All three are former owners of Terra Tech, LLC, an Oklahoma City company that installed underground cables for utilities and other businesses.  Robertson is also charged with three counts of signing false tax returns for the company and with one count of committing perjury before a federal grand jury.  James E. Newman is charged with three counts of assisting in the preparation of false company tax returns.

The indictment alleges that each defendant was involved in a scheme to divert gross receipts of Terra Tech into his or her personal bank account and then to exclude those gross receipts from both the company’s tax returns and personal tax returns.  According to the indictment, Robertson selected certain checks written to Terra Tech by its customers and gave them to Quanah K. Newman, who deposited them into her personal account at First United Bank in Wewoka instead of into the company’s account at Arvest Bank.  It is alleged that this diversion caused these receipts not to appear in the company’s books and records.  The indictment further alleges that Quanah K. Newman wrote checks on her account in Wewoka to Robertson and to James E. Newman, who deposited the diverted proceeds into their personal accounts.  In three separate counts, the indictment charges that Robertson signed company tax returns for 2001, 2002, and 2003 that underreported the company’s gross receipts.  As the person with primary responsibility for operating the company, James E. Newman is charged in three other counts with assisting in the preparation of these false tax returns.  The indictment alleges that the conspiracy defrauded the United States because it impeded the Internal Revenue Service in its assessment of income taxes.

The indictment also charges Robertson with lying to the grand jury about whether she provided her personal bank records to her tax preparer, who according to Robertson’s grand jury testimony was supposed to include the diverted gross receipts on her personal tax returns.

If convicted on the conspiracy count, each defendant faces a potential penalty of five years in prison and a fine of $250,000, in addition to mandatory restitution.  On the remaining tax counts, Robertson and James E. Newman could be sentenced to three years in prison and a fine of $100,000 per count.  On the perjury charge, Robertson could be sentenced to five years in prison and a fine of $250,000.

        The public is reminded that the indictment is merely an accusation and that the defendants are presumed innocent unless and until proven guilty.

        These charges are the result of an investigation conducted by the Criminal Investigation Division of the Internal Revenue Service and the Federal Bureau of Investigation.  The case is being prosecuted by Assistant U.S. Attorney Scott E. Williams.