Bolton Trial Day 2: Bank records, checks revealed in testimony

Bolton Trial Day 2: Bank records, checks revealed in testimony
Charles Bolton/Photo credit: WDAM

HATTIESBURG, MS (WDAM) - Day two of the Charles and Linda Bolton federal tax trial involved two government witnesses on the stand throughout the day, and will likely be the last of the witnesses before the government rests.

Sixth Witness:

Renee Moore, a certified public accountant for Topp McWhorter Harvey, PLLC, which was formerly Nicholson & Company was the government's sixth witness.

Moore testified to her duties at the firm, and said that she started at Nicholson & Company in 2009.

She spoke about Sports 22 and Hall Avenue Package store, both that are Schedule C businesses owned by the Boltons.

"Schedule C is a sole proprietorship, it's doing something to try to make money," Moore said.

Moore also agreed that the Boltons file joint tax returns.

During testimony, the government showed that at one point, Hall Avenue was listed under Charles Bolton, and Sports 22 was listed under Linda Bolton.

"I would need receipts, deposits, things like that," Moore said. "I would rely on things the client brings me."

Moore was not the one that prepared the Bolton's taxes; it was Lisa Mullis who also worked at Nicholson & Company.

Assistant U.S. Attorney Sharan Liberman showed Moore dozens of documents, including charts that the government made involving years 2009-2013 where money and checks are in question.

Multiple years show that the Boltons filed a loss on their tax returns for Sports 22 and Hall Avenue Package store, and most, got a refund.

"Under penalties of perjury, I declare that I have examined this return and accompanying schedules and statements, and to the best of my knowledge and belief, they are true, correct and complete. Declaration of preparer (other than taxpayer) is based on all information of which preparer has any knowledge," is what Moore read from a tax form to the court.

Moore was questioned about the number of times where the Boltons marks "Loans" on checks that were given to their two businesses.

She said she was under the impression that things were "Capital Contributions," where the owner donates money to their own business. Which she claimed was "very ordinary."

She said through all the documents that were reviewed that the Boltons are the ones that provided all the written statements, 10-99 forms and all the documents.

She was asked about "loans or Capital Contributions" and if she questioned it, or would question it.

"No, because it was designated as loans," Moore said. "The loans are in a sole proprietorship and that's where they loan the business money."

But Moore said she never looked at "source documents" because they do not have to.

She was questioned about checks from Manheim Mississippi that was sent to the Boltons at Sports 22.

"Loans being submitted aren't recorded as revenue," Moore said.

She stated that things that are not reported as income is classified as an "understatement of income."

From 2009 – 2013, the Boltons made $384,019.44 from Manheim, all that went to Sports 22, broken down by years by these totals:

2009: $96,827.53

2010: $80,701.20

2011: $66,707.14

2012: $12,984.06

2012: $52,016.90

2013: $74,782.61

Court documents show that $76,607.54 of that was marked as loans, and never recorded as income.

"Of all that money, roughly $308,000 was reported as income," said Joe Sam Owen, Charles Bolton's attorney.

In 2010, the Boltons claimed $5,840 as gambling winnings, which was reported to the government.

Moore was also asked if she thinks Linda is trustworthy, she said yes, but while answering she shook her head no. Moore was also asked about Charles, she said yes and nodded her head.

A Mississippi sales tax audit was also brought up during testimony, revealing that there was a previous issue with Sports 22 and Hall Avenue Package Store.

"All the amounts had been indicated as loans, they disallowed it, and said they had to be sales," Moore said.

Seventh Witness:

The government's seventh and possibly final witness was Internal Revenue Service, Special Agent Bradley Luker.

Luker is an agent in the Criminal Investigations Division of the IRS, and started the investigation in March 2015 when he was contacted by the Federal Bureau of Investigation about questionable checks.

Luker testified about 48 checks that were written to Sports 22, and 18 that were written to Hall Avenue Package Store, from Hattiesburg attorney, and longtime Boltons friend, John Lee.

"There is an ongoing federal investigation into John Lee," Luker said.

A breakdown of checks from John Lee show that seven were deposited into the Hall Avenue account, and the remaining 11 were cashed.

At Sports 22, 48 were written, five were "wholly" deposited, and the rest were cashed, with two being partially deposited, meaning some cash was taken out at the deposit.

"There is no evidence that would lead me to have an answer to what happened to the cash," Luker said.

The checks were cashed by Charles and Linda Bolton, and the trail stops at the banks, according to Luker.

Luker testified about catering that the Boltons did through Sports 22 for the National Guard and Manheim, all with multiple checks that ended up being claimed as loans.

Checks from Bud Holmes and Jim Dukes were also brought into question, one for $2,250 and $1,000 both claimed as loans.

Luker testified during cross examination that thousands of dollars was spent by Lee for "food and liquor," because that's how Lee listed it, and it was classified as "supplies."

Tax returns show that $273,520 just in cashed checks from John Lee by the Boltons was for "food and liquor" over the course of five years, 2009-2013.

Luker was able to show during his testimony, via multiple charts and tax records that the Boltons received money from Lee for multiple purchases.

Court Matters:

District Judge Keith Starrett has still not issued a ruling on the matter involving quashing the records that were subpoenaed from the Beau Rivage regarding John Lee's gambling records.

Noteworthy Spectators:

Forrest County Sheriff Billy McGee, Jim Dukes Jr., John Chain, Frazier Bolton, Carl Nicholson, Deborah Delgado, John Colette, Johneice DuPree, and Rod Woullard were in attendance throughout the day.