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Roger Stone Sued for $2 Million in Unpaid Taxes and Interest (1)

April 16, 2021, 10:05 PMUpdated: April 16, 2021, 11:18 PM

Roger Stone and his wife Nydia Stone are being sued by the U.S. government for nearly $2 million dollars in federal taxes, interest, and penalties.

The liabilities include nearly $1.6 million arising from joint tax returns filed by the pair for tax years 2007 to 2011, plus more than $400,000 that Roger Stone owes individually from 2018, the government said. The complaint was filed Friday at the U.S. District Court for the Southern District of Florida.

Roger Stone was indicted in January of 2019 on charges of obstruction, making false statements, and witness tampering connected to Robert Mueller’s investigation into Russian interference in the 2016 U.S. presidential election.

Following that indictment, the Stones created a trust and used funds through a company they controlled—Drake Ventures LLC—to buy their Florida residence in the name of the trust, according to the complaint. They then stopped making scheduled monthly installment payments of around $20,000 to the IRS, leading the IRS to terminate an installment agreement it had with them, the government said.

“Although they used funds held in Drake Ventures accounts to pay some of their taxes, the Stones’ use of Drake Ventures to hold their funds allowed them to shield their personal income from enforced collection and fund a lavish lifestyle despite owing nearly $2 million in unpaid taxes, interest and penalties,” according to the complaint.

The Stones put more than $1 million in accounts at Drake Ventures in 2018 and 2019 by transferring funds or having checks for Roger Stone deposited there, thereby evading IRS efforts to collect on the liabilities, the government said. They paid more than $500,000 on their personal tax liabilities from the company’s accounts during those years while also using the funds on groceries, salons, and clothes, the government added.

The government asked the federal court to enter judgments against the Stones for the amounts each of them purportedly owes and declare that the residence belongs to the Stones. It also wants the court to declare that tax liens arising from the couple’s liability are enforceable against the residence as well as other property held by the Stones, Drake Ventures, and the trust.

Former President Donald Trump commuted Stone’s prison sentence connected to the criminal charges and later granted Stone a pardon. The presidential pardon power doesn’t extend to civil actions such as the Friday complaint over tax liability.

The Stones live in Florida, where there are no state income taxes.

Contact information for the Stones wasn’t immediately available.

The case is United States v. Stone, S.D. Fla., No. 0:21-cv-60825, complaint 4/16/21.

(Updated with additional details starting in sixth paragraph.)

To contact the reporter on this story: Aysha Bagchi in Washington at abagchi@bloombergtax.com

To contact the editors responsible for this story: Patrick Ambrosio at pambrosio@bloombergtax.com; Jeff Harrington at jharrington@bloombergindustry.com

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