A federal grand jury in Kansas City returned an indictment yesterday charging a Kansas woman with tax evasion and wire fraud.
The indictment alleges that Michelle O’Connor, of Louisburg, owned and operated a realty company based in the Kansas City metro area. For tax years 2008 through 2015, O’Connor filed federal income tax returns, self-reporting that she owed approximately $300,000 in taxes. Despite acknowledging she owed the taxes, O’Connor did not pay them. In 2011, the IRS audited her 2008 and 2009 tax returns and concluded that O’Connor had improperly claimed tens of thousands of dollars in personal expenses as charitable deductions to the “Church of Revelation and Love,” a purported church she and her husband created and were, along with her family, its primary members. Based on that audit, the IRS assessed over $40,000 in additional taxes against O’Connor.
Starting in 2011, the IRS began trying to collect the outstanding taxes from O’Connor, sending her over 50 notices regarding them. From 2011 through 2023, however, Michelle O’Connor tried to stymy the IRS’s collections efforts by, among other things, filing three separate false and frivolous bankruptcy petitions, purchasing approximately $250,000 of cashier’s checks to reduce her bank account balances, and closing her personal bank accounts and using her business’ bank accounts to pay personal expenses.
By 2020, O’Connor owed the IRS nearly $500,000 in taxes, penalties, and interest.
In 2020, O’Connor submitted 34 fraudulent COVID-19 Economic Injury Disaster Loan (EIDL) applications on behalf of her real estate business and seven other corporate entities she created for the purpose of maximizing potential EIDL credits. Under the EIDL program, a small business could receive a loan of up to $150,000 from the Small Business Administration to cover six months of working capital. In total, O’Connor received nearly $300,000 from her fraudulent EIDLs, which she used for personal purposes, including $115,000 to purchase cryptocurrency.
If convicted, O’Connor faces a maximum penalty of five years in prison for tax evasion and a maximum penalty of 20 years in prison for each count of wire fraud. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
Acting Deputy Assistant Attorney General Karen E. Kelly of the Justice Department’s Tax Division made the announcement.
IRS Criminal Investigation is investigating the case.
Trial Attorneys Dominick Giovanniello and Robert Kemins of the Tax Division are prosecuting the case.
An indictment is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.