Butcher Case Below the Radar

This case has escaped much notice, but its trial is set to start today (Sept. 19), so here’s an advance peek.

Philip Butcher, who once owned and operated Blue Skies Charters of Rogers, faces two federal charges of filing false federal income tax claims – for more than $2.1 million – for tax year 2008.

Butcher, who lived in Rogers in the spring of 2009, was indicted by a federal grand jury in Fort Smith in May, after a federal grand jury in Florida indicted Laura Barel for running businesses that specialized in filing fraudulent tax returns.

Barel, 31, is accused of preparing, through companies called PMDD Services and Forever Grace, at least 275 tax returns seeking fraudulent refunds. Barel’s technique involved collecting information about her customers’ debts and then reporting those outstanding debts as Form 1099-OID deductions, making it look like the entire amount of debt was withheld as taxes.

Barel’s fraudulent returns sought more than $120 million in refunds, and the Internal Revenue Service paid out more than $4.7 million, according to the U.S. Department of Justice.

Butcher’s $672,781 tax return for 2008 accounted for 14 percent of the $4.7 million the IRS paid out on Barel’s fraudulent returns. He allegedly paid PMDD Services a 10 percent commission after receiving the refund.

Butcher also filed an amended return for the 2008 tax year seeking another $1.46 million, which apparently wasn’t paid.

If convicted, Butcher faces a maximum sentence of 10 years in prison and a maximum fine of $500,000.