Hinton man gets probation for helping coal operators skip taxes - Beckley, Bluefield & Lewisburg News, Weather, Sports

Hinton man gets probation for helping coal operators avoid paying taxes

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A 62-year-old Hinton man will serve three years probation, the first two under home confinement, for his role in a scheme that allowed several coal operators to avoid paying taxes.

U.S. Attorney Booth Goodwin said Donald R. "Duke" McGann had previously been convicted of tax evasion and structuring cash withdrawals from various banks in southern West Virginia as part of a larger check cashing scheme involving coal operators.

Goodwin said McGann provided coal operators involved in the scheme with bogus invoices for goods or services. The coal operator would then give McGann a check, which he deposited in his checking account. He then would withdraw the money from his account in increments of $10,000 or less, a process known as "structuring," to avoid federal reporting requirements. McGann would keep 10 percent then return the rest to the coal operators, who then used the money to pay employees under the table or otherwise kept it as a tax-free windfall, Goodwin said.

Goodwin said in 2009 alone McGann cashed checks totaling more than $770,000 for three different coal companies.

The case was investigated by the IRS Criminal Investigative Division and prosecuted by U.S. Attorney Thomas Ryan.

Goodwin said a co-conspirator, James Trent, 53, of Rock View, in Wyoming County, was sentenced Nov. 15 to three years in prison for tax evasion.