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A Houston attorney and the owner of a group of chiropractic clinics in the Houston area face federal tax charges for allegedly conspiring to defraud insurance companies and traffic accident victims and not reporting proceeds of their business arrangement as income to the Internal Revenue Service. U.S. Attorney Michael Shelby of the Southern District announced on April 12 that a federal grand jury indicted Gene Burd and Paul Samson Christie for alleged tax-related offenses. Burd is the principal in Burd & Associates, and Christie operated a group of chiropractic clinics under the name of Houston Pain Management and Rehab, Shelby says. Edward Urquhart, a Houston solo who represents Burd, says his client maintains his innocence. “He certainly contends he is innocent of all charges,” Urquhart says of Burd. “There’s a misunderstanding by the government, and we hope to get it worked out.” Urquhart declines further comment. Ron Woods, another Houston solo, also represents Burd. Christie could not be located for comment. On April 13, U.S. Magistrate Judge Nancy Johnson appointed Houston solo Mervyn Mosbacker Jr. to represent the clinic owner. “We’re contending he’s not guilty,” Mosbacker says of Christie. Mosbacker declines further comment. According to the indictment, Burd and Christie face one count of conspiracy to make false statements on tax returns in violation of 18 U.S.C. � 371. Burd also is charged with two counts of making false statements on his 1996 and 1997 tax returns, and Christie is charged with one count of making a false statement in regard to his 1997 return. “Allegedly, they falsely reported their income,” says Stephen Corso, an assistant U.S. attorney prosecuting the case. Making false statements on a tax return is a violation of 26 U.S.C. � 7206(1). According to the indictment, Burd allegedly paid runners to solicit people who had been involved in traffic accidents to use Burd’s legal services and to sign contingent-fee agreements in which the accident victims agreed to pay Burd a portion of any settlement he obtained for them. “The conspirators did direct and persuade Burd’s clients to attend numerous appointments at chiropractic clinics chosen by the conspirators,” prosecutors from the U.S. Attorney’s Office allege in the indictment. As alleged in the indictment, Burd filed personal injury claims on behalf of some clients, settled those claims with insurance companies without his clients’ knowledge or consent, and received checks for the clients. The prosecutors further allege in the indictment that Burd and Christie misrepresented to the clients that Burd’s share of the settlements were less than he actually received. The “clinic owners” allegedly had pre-arranged with Burd to “kick back” in cash to Burd about half of the fees the accident victims incurred at their chiropractic clinics, according to the indictment. Nancy Herrera, executive assistant U.S. attorney, declines to comment about why the indictment refers to “clinic owners” and yet only one owner, Christie, is named. “We do not comment at the indictment stage beyond the scope of the public record,” she says. As alleged in the indictment, Burd and Christie diverted portions of insurance settlement checks to various check-cashing accounts, which generated cash. Burd and Christie did not report the cash generated by the settlements as income on the tax returns they filed, the federal government alleges in the indictment. As alleged in the indictment, Burd reported partnership and corporation income totaling $112,591 for 1996 and $168,209 for 1997 but knew that the reported amounts were false. The federal government further alleges in the indictment that Christie falsely reported gross receipts or sales totaling $726,798 for 1997. Corso declines comment on the amount of income the government alleges Burd and Christie earned through their business arrangement. Special agents with the IRS criminal investigations field office in Houston investigated the case. Billy Martin, public information officer for the field office, declines comment. “We can’t make comments on indictments,” Martin says. U.S. District Judge Melinda Harmon has been assigned to hear the case. Burd and Christie each face up to five years in prison and a fine of up to $250,000 for the conspiracy charge. They also face up to three years imprisonment and another $250,000 per count on the false statement charges.

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