Troy White statement of offense

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA

UNITED STATES OF AMERICA CRINHNAL NO.: 13--CR--256 (CKK)

VI OLATION:

26 U.S.C. 7203 (Failure to File
Corporate Income Tax Returns)

TROY WHITE,

Defendant.

STATEMENT OF OFFENSE

Pursuant to Rule 11 of the Federal Rules of Criminal Procedure, defendant TROY

WHITE agrees and stipulates that at all relevant times:
INDIVIDUALS AND ENTITIES

1. Defendant Troy White a resident of the City of New Yorlc was the
sole owner and operator of Wytehouse Marketing, Inc. a for--profit
corporation registered in the State of New York. WYTEHOUSE provided marketing services to
various clients, including political campaigns, with an emphasis on marketing in urban areas
through the use of "street teams." WHITE was responsible for filing a Form 1120 corporate
income tax return on behalf of WYTEI-IOUSE with the United States Intemal Revenue Service
(the that reported, among other things, WYTEHOUSE's gross receipts.

2. EXECUTIVE A, a resident of the District of Columbia, was a named partner,
Chairman and Chief Executive Officer, and the majority owner of COMPANY A, a for-profit
corporation registered in the District of Columbia that provided accounting, management

consulting, and tax services. EXECUTIVE A also was the sole owner and operator of

COMPANY B, a for-profit corporation registered in the District of Columbia that served as a
holding company for other companies owned by EXECUTIVE A.

3. Belle lntemational, lnc. was a for--profit corporation that was
registered in the District of Columbia

4. was a political committee whose candidate was running for
President of the United States during the 2008 federal primary election cycle.

5. INDIVIDUAL A, a resident of the District of Columbia, was affiliated with
CAMPAIGN-1 during the 2008 federal primary election cycle.

6. B, a resident of Austin, Texas, was a supporter of

7. C, a resident of San Antonio, Texas, was a supporter of
and affiliated with CIVIC ORGANIZATION A, which maintained a tax-exempt
status under Title 26, United States Code, Section 501(c)(4).

BACKGROUND

8. WYTEHOUSE operated under a fiscal year which began on May 1 of each
calendar year and ended on April 30 of the following calendar year. Defendant WHITE knew
that he was required by law to file WYTEHOUSE's Form 1120 corporate income tax return with
the on or before July 15 of each calendar year.

9. On or about June 19, 2008, defendant WHITE filed and signed WYTEHOUSE's
Form 1120 corporate income tax retums with the IRS that reported, among other things,
gross receipts of $138,408 for the 2005 fiscal year, and $111,789 for the 2006

fiscal year.

LRIREPORTED GROSS RECEIPTS

10. In fiscal years 2007 and 2008, VWYTEHOUSE received approximately $608,750
in gross receipts related to services it provided in support of EXECUTIVE A
paid for these services with funds transferred from COMPANY A and COMPANY B, after
had declined defendant WI-IITE's ofiers to work directly for CAMPAIGN-1.
WHITE did not report these gross receipts to the IRS, nor did he report any of his gross receipts
for fiscal years 2007 through 2010, as required by law.

CAMPAIGN-I Declines to Pay for WYT EH OUSE Street Teams

11. Defendant WHITE marketed WYTEHOUSE to CAJVHDAJGN-1 in an effort to
have pay for street team services during the 2008 federal
primary election cycle.

12. On or about January 9, 2008, defendant WI-UTE sent an e-mail to a CAMPAIGN-
official with a PowerPoint presentation describing how WYTEHOUSE could assist
CAMPAIGN-1 through the use of street teams. Approximately three Weeks later, WHITE,
INDIVIDUAL A, and a CAIVEPAIGN-1 senior official exchanged a series of e-mails concerning
whether CAIVEPAIGN-I would employ WYTEHOUSE's street teams.

13. On or about January 29, 2008, CAMPAIGN-1 rejected services
in an e-mail the senior official sent to defendant WHITE and INDIVIDUAL A, in which the
senior official wrote: "Unfortunately, we are not going to be able to use the street teams. As
knowsthem and used them quite a bit . . . last cycle. I hope

we can work together soon."

La)

14. On or about January 31, 2008, defendant WHITE sent a follow--up e--mail to
INDIVIDUAL A and "s senior oficial and stated: still offering my
services just in[ ]case your strategy has changed. We can cover the following markets for Super
Tuesday [February 5, 2008]. . .

15. Later that day, INDIVIDUAL A replied to defendant WHITE and
l's senior official and wrote: "[A]nd I am piping up saying we need your services.
senior official] let's [find] some money. I will fight for it."

EXECUTITT A Finances WYTEHOUSE 's
Street Teams in Support of

16. In or about February 2008. INDIVIDUAL A introduced defendant WHITE to
EXECUTIVE A, whom INDIVIDUAL A described as a business owner in the District of
Columbia who wanted to organize an effort to support CAMPAIGN-1.

l7. EXECUTIVE A directed defendant WI-UTE to put together a plan that included
the costs associated with services WYTEHOUSE would provide in support of
during the upcoming Texas federal primary and caucus election on March 4, 2008. WHITE
created a plan that included, among other things, the scope of WYTEI-IOUSE's services in
support of CAMPAIGN--1, the benefits of employing street teams, and the costs associated with
WYTEHOUSE's services, including how much it was going to cost to pay street team members
in various Texas cities. EXECUTIVE A and WHITE agreed that EXECUTIVE A would pay
WHITE to provide these services in support of CAMPAIGN-1 during the Texas federal primary
and caucus election.

18. Shortly after reaching an agreement with EXECUTIVE A, defendant WHITE
hired individuals to assemble and organize street teams that would be paid to disseminate and

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distribute materials prepared by including posters, lawn signs, pamphlets, and
stickers. The goal of this efiort was to raise 's visibility in several large cities in
Texas, including Austin, Dallas, El Paso, Houston, and San Antonio.

19. During this period, INDIVIDUAL A introduced defendant WHITE to
INDIVIDUAL B, who would help organize street teams and paid canvassers in Austirt Texas.
EXECUTIVE A, and INDIVIDUAL B, after being introduced to each other by
INDIVIDUAL A, communicated by telephone several times in advance of the Texas primary
and caucus election.

20. Also during this period, INDIVIDUAL introduced defendant WHITE to
C. After their introduction, agreed to find individuals who
would be paid to support by serving as canvassers in advance of the Texas
primary and caucus election. INDIVIDUAL then contacted members of CIVIC
ORGANIZATION A to recruit and organize paid canvassers in several smaller cities in Texas,
including Brownsville, Corpus Christi, Lubbock, and McAl1en.

21. Beginning in or about the last week of February 2008, the paid street team
workers and canvassers began disseminating and distributing 's prepared
materials. Defendant WHITE and INDIVIDUAL A maintained contact during this period, and
INDIVIDUAL A arranged for 's Texas offices to provide 's
prepared materials to the street team workers. INDIVIDUAL A also provided WHITE with
confidential internal information from CAMPAIGN-I regarding the itinerary and schedule for a
high-profile individual who would be campaigning in Texas in support of The

paid street team workers and canvassers then were directed to attend these campaign events to

show support for and disseminate and distribute 's prepared
materials.

22. On or about February 27, 2008, and on or about February 29, 2008,
WYTEHOUSE received a total of approximately $231,250 from BELLE to pay for the services
that the paid street team workers and canvassers would provide in support of
leading up to the March 4, 2008, Texas primary and caucus election. On or about those same
dates, BELLE received a total of approximately $233,000 fiorn A, which wired the
funds from its comorate bank account in the District of Columbia to BELLE's corporate bank

account in the District of Columbia:

--..: . -- . . .
1 . M.

$134,000 on February 27, 2008 $133,250 on February 27, 2008 Texas Federal Presidential
Primary and Caucus on
$99,000 on February 29, 2008 $98,000 on February 29, 2008 Mamh 4: 2008

23. Following the Texas federal primary and caucus election, EXECUTIVE A agreed
to continue financing WYTEHOUSE's paid street team workers in support of
during several upcoming federal primary elections. In addition, INDIVIDUAL A continued to
communicate with defendant WHITE to ensure that the paid street team workers had access to
enough supplies of 's prepared materials. Moreover, INDIVIDUAL continued
to assist WHITE by finding individuals, many of whom were affiliated with CIVIC
ORGANIZATION A, to serve as paid canvassers for in different locations.

24. From in or about April 2008 through and including in or about May 2008,
WYTEHOUSE received a total of approximately $244,500 from BELLE in connection with the
services the paid street team workers and canvassers provided in support of CAMPAIGN-1

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during the federal primary elections. During this same period, BELLE received a total of
approximately $244,500 from COMPANY A, Whi ch Wired the funds from its corporate bank

account in the District of Columbia to BELLE's corporate bank account in the District of

Columbia$7,500 on April 1, 2008 $7,500 on Jgril 1, 2008
$63,000 on April 11, 2008 $63,000 on April 11, 2008
$86,000 on April 21, 2008 $86,000 on April 22, 2008
Federal Presidenfial Primary
$88,000 on May 22, 2008 $88,000 on May 23, 2008 on Jun, 2008

25. In or about May 2008, YTEHOUSE also received a total of approximately
$133,000 in additional funds from BELLE in connection with the services the paid street team
workers and canvassers provided in support of during the federal primary
elections. This time, however, BELLE received a total of approximately $134,000 from
COMPANY B, which wired the funds from its corporate bank account in the District of

Columbia to BELLE's corporatebanlc account in the District of Columbia:

26. In summary, from in or about February 2008 through and including in or about

May 2008, YTEHOUSE received approximately $608,750 from BELLE to support

commy viisaairaanaiiayra at 12008
0 -- 2 2 7 Election Dates
On May 1, 01'} May 2, Federal Presidential Primaries
$77,000 on May 6, 2008 $76,500 on May 6,2008 May 6* 2?08

efforts during several federal primary elections. During this same time period,

BELLE received approximately $611,500 from COMPANY A and COMPANY B.

FAILURE TO FILE 2007-2010 TAX RETURNS

27.

Defendant WHITE failed to file Form 1120 corporate income

tax return with the IRS for its 2007 and 2008 fiscal years, which would have included gross

receipts that VWYTE1-IOU SE was paid for its work in support of CAMPAJGN-1 during the 2008

federal primary election cycle. WHITE also failed to file WYTEI-1OUSE's Form 1120 corporate

income tax returns with the for the 2009 and 2010 fiscal years:

2007 $507,300 $8,329 July ls, 2008
2008 $297,815 $1,859 July ls, 2009
2009 $129,095 $5,622 July 15, 2010
2010 $124,296 $4,915 July 15,2011

0 28. Defendant WHITE engaged in the conduct described above willfully and not by

way of accident, mistake, or other innocent reason.

This statement of the offense is not intended to constitute a complete recitation of all
facts known by defendant but is, instead, intended to provide the necessaijv factual basis

for the g_t1i1t_v plea.

RONALD C. JR.
United States Attorney
D.C. Ba:

/42

Lojvaan A. Egal, Yotf
Bar No. 497-158
Assistant United States Attorneys

United States Attorne}"s Office

555 Fourth STIBBI,

Washington, 20530

e_-nhraim .wet*ni ek@usdoj . got

(202) 252-7899 (AUSA Egalj

(202) 252-7092 (AUSA Wemick)

ACCEPTAJQCE
1 have read every word of this Statement of Offense. Pursuant to Rule 11 of the Federal

Rules of Criminal Procedure. after consulting with my attorney, I agree and stipulate to this
Statement of the Offense, and declare under penalty ofpetjuxjs-' that it is true and correct.

77 5

Date/ 'e
Defend I

have discussed this Statement of Offense with my client, Troy and concur with
his decision to stipulate to this Statement of the Offense.

A. Nabatofi, Esq.
Anornejv for Defendant Troy Vx-hite

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