Roy Lee Noe pleaded guilty in U.S. District Court in Greeneville in September to two counts of income tax evasion. Last week, Noe received an 18-month prison sentence, three years probation and was ordered to pay $323,123 in restitution to the IRS, which encompasses tax years 1999 through 2003 and tax previously owed for 1995.
Four remaining counts of income tax evasion were dismissed as part of the plea agreement. Noe faced a maximum sentence of five years in prison and a $250,000 fine for each count.
Prosecutors say Noe admitted to attempting to evade income tax for the year 1999 and attempting to evade the payment of income taxes for the years 1994 and 1995.
According to court records, Noe failed to file tax returns for the years 1999 through 2003, even though he had taxable income of approximately $325,740 during those years. In addition, Noe failed to pay tax due and owing for his 1994 and 1995 tax years of approximately $95,254.
Prosecutors say Noe would intentionally fail to maintain accurate books and records as to the cash received from his bonding business and admitted to keeping money hidden and out of banks so the IRS could not reach the funds.
The IRS conducted an audit of Noe's finances for the years 1994 and 1995 and ordered him to pay a tax deficiency. Noe did not.
"At the time of the audit deficiency report, (IRS Agent Jackie Sparks) clearly advised Noe in writing that he had a duty to keep accurate and complete books and records and that failure to maintain books and records is a badge of fraud," court records state.
Copies of these documents were recovered at Noe's home during a January 2005 search by federal agents.
At the time of the search, Noe claimed he had not cleared more than $8,100 per year since 1995, that he had made no money for the past five to six years, and that he did not owe the government any money. Noe also claimed that cash found in the safe at his residence, some $10,592, was his sister's money.
"Noe said he believed he did not owe the IRS any money," court records state.
A few weeks after the initial interview, Noe contacted the IRS and said he wanted to cooperate in the investigation. Noe admitted he knew he owed the IRS and that he had a tax liability.