Tennessee Department of Revenue News Release Sept. 29, 2006

NASHVILLE, Tenn. - Today Daniel Lee Trejo, former owner of Mattress Direct in Knoxville, pled guilty to two counts of sales tax fraud, a violation of Tenn. Code Ann. Section 67-1-1440(g). The Tennessee Department of Revenue's Special Investigations Section conducted the investigation leading to today's guilty plea.

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

Trejo, 36, was indicted by the Knox County Grand Jury on Sept. 26, 2005, on 54 counts of sales tax fraud, a Class E Felony, and three counts of felony theft of less than $60,000. The indictment charged that Trejo willfully and intentionally caused Mattress Direct, located on Kingston Pike in Knoxville, to file false and fraudulent sales tax returns for the periods July 2002 through December 2003. These fraudulent actions resulted in Mattress Direct failing to report $292,078.70 of taxable sales for the business and failing to remit $26,287.22 of the proper sales tax collected and due.

Knox County Criminal Court Judge Ray L. Jenkins sentenced Trejo to a total of three years probation and ordered him to pay restitution in the amount of $26,287.22. The Department of Revenue will seek additional civil fines and penalties from Trejo.

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

The Department of Revenue is responsible for the administration of state tax laws and motor vehicle title and registration laws established by the legislature and the collection of taxes and fees associated with those laws. The Department of Revenue collects approximately 92 percent of total state tax revenue. During the 2005-2006 fiscal year, the department collected $10.3 billion in state taxes and fees. In addition to collecting state taxes, $1.8 billion of local sales tax was collected by the department for local governments during the 2005-2006 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.