FEDS BARE DOWN ON CARL E. SMITH, INC. HEIRS

(10/21/2008)

A father and son from Wood County have pleaded guilty in federal court relating to the misappropriation of funds from a well-known Jackson County oil and gas pipeline firm Carl E. Smith, Inc. Eddie Burl Smith, 70, of Mineral Wells, said he conspired to defraud IRS, illegally using funds from his father's business. The money was used to pay employees' salaries, with the company avoiding paying taxes on part of its payroll. Smith's son, Edward Michael Smith, 47, of Mineral Wells, admitted that he misapplied $100,000 of company money earmarked for the company's employee health benefit plan. Employee healthcare claims of roughly $240,000 went unpaid. Both men also admitted that they tried to circumvent bankruptcy proceedings for Carl E. Smith Inc. by illegally funneling proceeds from oil wells bought with protected funds into a separate company owned by Michael Smith, according to Charleston newspapers. Eddie Smith faces up to 10 years in prison, and his son faces up to 20 years in prison.

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