David A. Montgomery and wife Bridget M. Montgomery have been found guilty on all counts as charged, United States Attorney Kenneth Magidson announced today. The Montgomerys founded their own church, Restoration Temple Church of God in Christ, located in Humble, Texas, with David Montgomery as its Pastor. The verdicts were returned after less than two days of trial and approximately 3.5 hours of deliberation.
David and Bridget Montgomery were charged and convicted of conspiring to impair and impede the Internal Revenue Service (IRS) in its computation and collection of income taxes between January 2003 and April 2006. The jury also convicted them of two counts of making false statements in relation to their 2004 and 2005 income tax returns by under-reporting their gross income from their construction business, Montgomery’s Contracting.
The trial began Tuesday morning, Aug. 7, 2012. The United States presented a series of witnesses, most of whom were pastors or representatives of small local churches for whom the Montgomerys performed construction services in exchange for payments from 2003-2005. An IRS agent also testified that the loss of tax revenue to the U.S. Treasury was approximately $600,000 due to these payments not being claimed on their income tax returns.
Mr. Montgomery’s defense was that a friend in the construction industry, since deceased, advised him that if he ploughed funds earned from their construction business into their church, they did not have to report it to the IRS and pay tax on it. Mrs. Montgomery contended that she made mistakes because she was in over her head when she prepared the returns.
In addition to the testimony and evidence of payments for services to the Montgomerys, the government presented evidence that they repeatedly manipulated financial information according to their financial interest. For instance, they claimed more income than they reported to the IRS in applications for a $900,000 loan and in several applications for credit to purchase luxury automobiles.
Both were permitted to remain on bond pending their sentencing hearing, to be set at a later date. At that time, they face up to five years in prison and a $250,000 fine for the conspiracy conviction and a maximum of three years and a $100,000 fine on each of the false statements convictions.
The case was investigated by IRS-Criminal Investigation. The trial was handled by Assistant United States Attorneys Stephen Corso, Julie Redlinger and Charles Escher.