A man who years ago was the subject of Eyewitness News investigations after allegations surfaced that he defrauded a host of Catholic charities is now headed to prison.
The Department of Justice announced Monday that 63-year-old Michael Galloway was sentenced to 21 months in federal prison for tax evasion. He was previously convicted on four counts.
Galloway improperly deducted personal expenses as business expenses between 2003 and 2006, the Justice Department said. These expenses included homeowner’s association fees, car payments and his cable bill.
“No matter what the source of income, all income is taxable,” Tara Sullivan, special agent in charge of IRS Criminal Investigation, said in a news release from the Justice Department. “Mr. Galloway received income from many sources, however, he failed to disclose his true income to the IRS. This sentence should send a clear message: tax evasion is a violation of federal law and can have severe consequences that can result in jail time.”
The Justice Department said Galloway underreported his and his spouse’s taxable income, reporting, for example, only about $13,000 in income in 2003 while living in a large home on a golf course.
Galloway owned the popular Catholic Online website, as well as many of other Catholic-themed internet domains.
Catholic Online billed itself as, “The Global Leader in Catholic On-line Donations and Payments.” The site accepted charitable giving and then claimed to distribute payments to the appropriate organizations. It was the subject of a lawsuit by the Kern County District Attorney’s Office, which alleged years of deceptive or fraudulent business practices.
Galloway agreed to pay restitution of $210,000 to several charities.
In a separate legal proceeding, the state labor board made him pay three former employees tens of thousands of dollars in disputed earnings. see more Catholic charities news
Full story at BakersfieldNow.com.