NEWPORT NEWS — A Williamsburg businessman was convicted in federal court on charges that stem from tax fraud.
On Monday, Oct. 25, Michael J. Tiernan, 62, was convicted on charges of filing false tax returns and failure to file a tax return.
Tiernan served as the financial officer for several business entities related to Ford’s Colony, including Ford’s Colony Realty LLC, from at least 2014 through 2017. He is noted as having been the former co-owner, chief financial officer and controller of Ford’s Colony Realty, LLC. and Southeast Settlement and Title, LLC.
In Sept. 2020, Tiernan was indicted on seven felony counts of bank fraud, two felony counts of filing false tax returns and one felony count of failure to file income tax.
Court documents show that for the tax years of 2015 and 2016, Tiernan falsely understated the income in which he received from these entities in his federal income tax filings. While earnings were reported, Tiernan reported high deductions which resulted in zero taxable income for those years. Additionally, he also claimed to be insolvent as a means to exclude discharge of debt in 2015.
In the aforementioned years, Tiernan reported that the income he received from the entities amounted to $289,401 in 2015 and $204,523 in 2016. In 2017, Tiernan did not file a tax return.
Evidence also showed that he cashed checks into his personal bank account that were written by himself and by the entities notated earlier in amounts of over $1.6 million dollars. Tiernan went on to spend almost the entirety of these funds through a use of checks and debit card transactions.
When preparing tax returns for the business entities in which he received funds from, he did so in a manner that did not disclose the true amount in which he was compensated.
Tiernan now faces a maximum penalty of up to seven years in prison. His sentencing has been scheduled for March 2, 2022.
The office of United States Attorney of the Eastern District of Virginia notes that actual sentences for federal crimes are usually less than what the maximum penalties are afforded under the law. The judge will take into consideration sentencing guidelines and other contingent factors.