REVENUE INVESTIGATION RESULTS IN GUILTY PLEA OF
HENDERSONVILLE BUSINESSMAN ON SALES TAX EVASION CHARGES

NASHVILLE, Tenn. - The Tennessee Department of Revenue's Special Investigations Section conducted the investigation that led to today's felony conviction of Glen Irven McCarthy, president of Gourmet Pizza Plus, Inc. in Hendersonville, Tenn., for evasion of sales tax. McCarthy, 48, pleaded guilty to 21 Class E Felony counts of sales tax fraud, a violation of Tenn. Code Ann. Section 67-1-1440(g) in the criminal court of Sumner County.

Today County Criminal Court Judge Jane Wheatcraft accepted McCarthy's guilty plea and scheduled his sentencing for March 31, 2006. McCarthy could face up to 12 years in prison. The Department of Revenue also will seek additional civil tax and penalties from McCarthy.

"When sales tax is collected from the public and not remitted, it is a breach of the public trust," said Revenue Commissioner Loren L. Chumley. "The Department of Revenue aggressively pursues criminal sanctions and demands accountability for such actions."

The investigation began when District Attorney General Ray Whitley provided information to the department indicating McCarthy was understating the sales tax liability of Gourmet Pizza Plus, Inc. d/b/a Gourmet Pizza, 408 Main St., Hendersonville, Tenn. Based on this information and other evidence gathered, McCarthy was indicted by the Sumner County Grand Jury on Feb. 10, 2005, on 21 counts of evading sales tax and one count of theft. The 21 counts charged McCarthy with unlawfully and knowingly evading and defeating sales tax collected and due to the state of Tennessee by filing false sales tax returns on behalf of Gourmet Pizza Plus, Inc., during the period Jan. 1, 2002, through Sept. 30, 2003. These fraudulent actions resulted in Gourmet Pizza Plus, Inc., failing to report $546,202.47 of taxable sales for the business and failing to remit $49,139.26 of the sales tax collected and due.

Citizens who suspect violations of the Tennessee revenue laws should call the toll-free tax fraud hot line at (800) FRAUDTX (372-8389).

These cases are pursued criminally by the department in cooperation with local district attorneys general.

The Department of Revenue collects approximately 92 percent of total state tax revenue. During the 2004-2005 fiscal year, the department collected $9.6 billion in state taxes and fees. In addition to collecting state taxes, $1.7 billion of local sales tax was collected by the department for local governments during the 2004-2005 fiscal year. Besides collecting taxes, the department enforces the revenue laws fairly and impartially in an effort to encourage voluntary taxpayer compliance. The department also apportions revenue collections for distribution to the various state funds and local units of government. To learn more about the department, log on to www.Tennessee.gov/revenue.

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