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WASHINGTON, D.C.—The CEO and the chief financial officer of a Leland-based chain of assisted living facilities have been sentenced to federal prison for tax fraud.
According to a press release from the U.S. Department of Justice (DOJ), Ronald E. Burrell, CEO of Caremerica Inc., and his former CFO Michael R. Elliott were both sentenced by U.S. District Judge James C. Fox to five years in federal prison.
Each was ordered to pay more than $4.8 million in restitution.
Burrell and Elliot previously pleaded guilty to conspiracy to defraud the IRS. Burrell, a Wilmington resident, pleaded to the charges Jan. 3, 2012. Elliot, a resident of Loris, S.C., pleaded guilty July 18, 2012.
Charging documents show Burrell and Elliot co-owned Caremerica Inc., a Leland-based company and chain of assisted living facilities in North and South Carolina. Burrell was the president and CEO for Caremerica and other related companies.
Formerly a certified public accountant, Elliot served as the CFO and tax return preparer for Caremerica, according to the Justice Department.
The two men accrued more than $4.5 million in employment tax liabilities between 2003 and 2006 and filed false IRS statements that reported full payment of those taxes when only of fraction of taxes were paid or none at all, according to the Justice Department.
According to the report, the charging documents allege that in 2003, Burrell and Elliott also acquired majority ownership of Partners Pharmacy Services Inc. (PPS), which provided prescription drug and other related services to all Caremerica assisted living facilities, according to the Justice Department.
They sold the company to a subsidiary of Omnicare Inc. in April 2005, and at the closing Burrell received $1.6 million and Elliot received $1.4 million. Burrell and Elliot concealed their proceeds in order to keep the proceeds hidden from the IRS, according to court documents. Elliot wired his proceeds into his then-girlfriend’s bank account.
Burrell formed a company in his wife’s name to funnel some of the closing proceeds and as a result, he deceived the IRS into accepting a $29,000 settlement of a $300,000 personal tax liability. Burrell opened another Caremerica assisted living facility with the money.
Elliott and Burrell continued to obstruct justice by making false statements under oath in bankruptcy proceedings and in IRS disclosure forms, the DOJ press release states.
According to the North Carolina Secretary of State’s Office, Caremerica Adult Care, Inc. and Caremerica West, Inc.—both of which listed Burrell as president—were dissolved in July 2011.
Contact Christina Haley at (910) 772-6337 or chrisitna.h@hometownwilmington.