Richmond Businessman Arrested for State Income Tax Evasion
October 2009 - A Richmond businessman was arrested on three felony charges of state income tax evasion, we announced on September 1, 2009.
Philip Leech, 46, is the chief executive officer, secretary and chief financial officer of In & Out Designs, Inc. located in Pleasant Hill. According to our special agents, In & Out Designs allegedly earned more than $1.3 million in taxable income in 2001–2003, but Leech failed to file the corporation’s state income tax returns for any of these years. The corporation owes the state more than $122,000 in tax. As chief executive officer and chief financial officer, it is Leech’s responsibility to ensure the corporation’s taxes are filed. Leech allegedly ignored our notices to file the delinquent returns.
Penalties, interest, and the cost of the investigation will be added to this figure. Each tax count carries a maximum term of three years in state prison.
The failure to file tax returns is part of the $6.5 billion tax gap California faces each year. The tax gap is defined as the difference between the tax that is owed and the tax that is paid.
In & Out Designs, Inc. is owned by Rick Alvin Powers, 55, who, along with his wife, Cathy Powers, 55, pleaded no contest earlier this year to felony charges of diversion of construction funds and state income tax evasion. Their sentencing is still pending.
Leech was booked into the Contra Costa County Main Jail. His bail is set at $20,000 and his arraignment is still pending.