Monday, July 16, 2012

Former KC basketball team owner pleads guitly to tax fraud

U.S. Department of Justice

A Kansas City area businessman has been sentenced to 51 months in federal prison for tax evasion and bank fraud, U.S. Attorney Barry Grissom said today. A federal judge also ordered the man to pay more than $1.3 million in restitution.

James Clark, 53, Overland Park, Kan., a former owner of the Kansas City Knights basketball team, pleaded guilty today to one count of tax fraud and one count of bank fraud.

Clark admitted that he withheld payroll taxes from employees of his company, SWISH Holding Corp., while failing to pay more than $502,000 to the Internal Revenue Service.

He diverted the funds and used them for his own purposes, including the operation of the basketball franchise.

Clark also admitted submitting false information to UMB Bank when he applied for a line of credit.

He overstated the income, profits and assets of SWISH. He gave the bank purported copies of federal income tax returns for SWISH for 2002 and 2003. The returns had not actually been filed with the IRS and falsely overstated SWISH’s income.

Additionally, as a personal guarantor of the loan, Clark gave the bank statements that over-stated the value of the Kansas City Knights and misrepresented that he had an ownership interest in the American Basketball Association.

Grissom commended the Internal Revenue Service, the FBI and Assistant U.S. Attorney Leon Patton for their work on the case.