Everette Witherspoon Jr., a Forsyth County commissioner for eight years, will spend 12 months and a day in federal prison on tax fraud charges he pleaded guilty to last year.
U.S. District Judge Thomas D. Schroeder handed down the sentence Thursday after a nearly two-hour hearing that included allegations from a federal prosecutor that Witherspoon oversaw a mental health company that engaged in fraudulent criminal behavior. Witherspoon was never criminally charged with allegations connected to his company, and he denied in court that his company did anything illegal.
But Schroeder noted that, for several years, Witherspoon was able to live a lavish lifestyle with tax-free income of over $200,000 that he received from that same company. And he said he found it mystifying that Witherspoon, who owned two tax preparation companies, would not only fail to file income taxes but also file fraudulent ones.
“This was a significant amount of money, a couple of hundred thousand dollars a year that he got tax free,” Schroeder said.
Witherspoon will have to report to federal prison by Oct. 15. He also will have to pay about $211,000 in restitution.
It was not only a stunning fall for Witherspoon, 42, who had sought a State House seat in the General Assembly at one point. It also represented the apparent end of a federal investigation and prosecution of a tax fraud scheme that ensnared several people, including the former president of the local NAACP chapter. Federal prosecutors alleged that several people prepared and filed fraudulent tax returns on behalf of others to guarantee a higher than usual tax refund.
Witherspoon co-owned the two tax preparation companies at the center of the scheme — Fast Tax of Winston-Salem and Quick Taxes LLC in Greensboro. But prosecutors never accused Witherspoon of having any hand in preparing false tax returns for anyone beside himself.
In court Thursday, Assistant U.S. Attorney Cliff Barrett presented evidence that he argued justified a longer sentence. The sentencing enhancement hinged on evidence proving that Witherspoon earned more than $10,000 from his mental health company, Chris' Rehablative Services LLC in Greensboro, and the tax preparation companies and that the income was derived from criminal activity.
Witherspoon’s attorneys, Michael Grace and Chris Clifton, objected, and Clifton objected several times to evidence introduced through the testimony of IRS agent Jeffrey Purgason. Schroeder overruled the objections and allowed the longer sentence.
Purgason testified that he was the lead investigator in the case and had started looking into the alleged tax fraud scheme in 2015. He testified that, as part of the criminal investigation, he analyzed Witherspoon’s personal banking records. In 2013, he transferred $272,452 from Chris' Rehablative accounts into his bank account. The next year, he transferred $329,485. And in 2015, he took in $224,690, according to Purgason.
Willie Cole Jr., Witherspoon’s business partner in the mental-health company, told investigators that the company was supposed to provide counseling and other services to clients. The company accepted Medicaid and Medicare patients.
According to Purgason, Cole told investigators that most of the patients never received any services but got kickbacks for signing in. When Cole objected, Witherspoon told him that those clients would never tell anyone, Purgason said in court.
Cole also told investigators that Witherspoon and another staff member drove around to people’s houses and had those people fill out the sign-in sheet. Those people never came to the company’s offices to get services, Cole told investigators.
Under cross examination, Purgason said that he investigated the company, and the prosecution declined to comment when asked by the judge why no criminal charges were ever filed in connection to the fraud allegations against Chris’ Rehablative Services.
Witherspoon, when given the chance to speak before being sentenced, said, “I’m not a criminal.”
And he said that the money from the company that went into his account was mostly reimbursement from him paying his staff.
While he said he took full responsibility for the criminal charges he was convicted of, he also said that his company had gone through audits with no finding of wrongdoing. Purgason said that, among the financial receipts he got when he went to the company’s offices, he never saw any medical records. But Purgason said under cross examination that there were other boxes in the office that might have contained medical records, and Witherspoon said he kept “immaculate” medical records.
The company has since been dissolved.
Purgason also testified that he created spreadsheets based on national and state statistics on tax returns. Returns prepared and filed by Fast Tax and Quick Taxes got earned income taxes at a much higher rate than the national and state average, he said.
Court documents indicate that one of the other people convicted in the tax fraud scheme prepared tax returns for Witherspoon’s mental-health company. Claudia Lynette Shivers was sentenced to nearly two years in prison after she was convicted of conspiring to defraud the United States by filing false tax returns.
Federal prosecutors alleged that Shivers conspired with three other people, who have all been convicted, to prepare 519 false tax returns that claimed $1.3 million in fraudulent tax refunds. Shivers co-owned both Fast Tax and Quick Taxes. The three other people convicted were S. Wayne Patterson, past president of the Winston-Salem NAACP and a former lawyer; Kristyn Dion Daney; and Rakeem Lenell Scales.
Witherspoon's attorney Michael Grace told the judge that some criminal defendants scoff at the prospect of a felony conviction but that was not true for Witherspoon. In fact, Witherspoon would willingly serve time if it meant he wouldn’t have a felony conviction on his record, he said. Grace urged the judge to give Witherspoon probation.
No one disputes that Witherspoon showed a commitment to public service while he was a Forsyth County commissioner, Grace said. In that role, Witherspoon spoke out against Wellpath, then known as Correct Care Solutions, Grace said. The company provides medical services for the Forsyth County jail.
Grace and Clifton represent the family of John Neville in a potential wrongful-death lawsuit, and Grace said their investigation has determined that Wellpath has 82 cases nationally of people dying under the company’s care.
Neville, a Greensboro resident, died as a result of injuries he received at the Forsyth County Jail in December 2019. Five former detention officers and a nurse who worked for Wellpath have been charged with involuntary manslaughter.
As a result of his conviction, Witherspoon likely will never serve in public office again, Grace said.
“That’s a great punishment,” Grace said.