Friday, October 31, 2014

Doctor convicted in tax scheme

By The Herald Staff | 3/28/2014

KANSAS CITY, KAN. — A physician and author who formerly practiced in Ottawa was convicted of tax evasion Friday by a federal jury.

Mary C. Vernon, 61, Lawrence, was convicted on five counts of tax evasion in U.S. District Court, Kansas City, Kan., for evading paying income taxes for the years 2004 through 2008, according to a news release from the U.S. Attorney’s Office.

KANSAS CITY, KAN. — A physician and author who formerly practiced in Ottawa was convicted of tax evasion Friday by a federal jury.

Mary C. Vernon, 61, Lawrence, was convicted on five counts of tax evasion in U.S. District Court, Kansas City, Kan., for evading paying income taxes for the years 2004 through 2008, according to a news release from the U.S. Attorney’s Office.

Vernon ended her association with Heartland Pulmonary & Internal, 1428 S. Main St., Suite 3, Ottawa, about one week before she was indicted on federal tax evasion charges Dec. 19, 2012, a spokesperson for Heartland told the Herald in late December 2012. She is an obesity specialist who co-authored the “Atkins Diabetes Revolution” book with the late weight loss expert and others. She also practiced in Lawrence and Shawnee.

During trial, prosecutors presented evidence that Vernon earned $588,686 for services she provided in 2003 and 2004 to Atkins Nutritionals, Inc., a company that sold weight loss programs and products. From 2005 to 2008 she earned an additional $190,000 to promote Dr. Atkins’ nutritional theories. From 1999 to 2007, the Internal Revenue Service went after Vernon for taxes, interest and penalties that she owed and failed to pay from 1991 through 2005, collecting about $2 million through levies and seizures, prosecutors said.

In 2003, Vernon hired an attorney to create a corporation called Rockledge Medical Services. Prosecutors provided evidence that Rockledge Medical Services was a sham corporation which Vernon used to avoid paying taxes from 2004 to 2008, the U.S. Attorney’s Office release said.

Sentencing is expected at a later date. She faces a maximum penalty of five years in federal prison and a fine up to $250,000 on each count, the release said.

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