$2.75M unreported in Bullpen

SAN DIEGO -- Defendants in the Operation Bullpen case are scheduled through mid-June to enter their pleas. Meanwhile, their customers are in a quandary over bad purchases and what to do about them. And while most collectors have joyfully devoured news about the FBI's sting operations and tales of forgers, distributors and authenticators, the Operation Bullpen investigation has an untold story - the work of the Internal Revenue Service. IRS officials in San Diego estimate that of the sales receipts tracked in Operation Bullpen, the defendants collectively had an estimated $2.75 million in unreported income. And that's just the income that could be identified. A half dozen IRS officials who worked in tandem with the FBI on Bullpen might have been called on to do more extensive probing, but the defendants were so forthcoming with information there was less need to implement a full-scale analysis. "The FBI asked us to get involved to follow the money," said Albert Allison, branch manager for the IRS's criminal investigaton division in San Diego. "Once the FBI discovered the lucrativeness of this business and the amount of money flowing back and forth, through the wiring of funds and other transfers, they wanted us to bring our financial expertise to identify profit in this enterprise." Actually, what they have learned from this experience may have implications on the way hobbyists conduct business in the future.

As a condition to its involvement in the investigation, the IRS had opportunities to review income tax returns to compare what was discovered in the FBI operation with income reported to Uncle Sam. What the IRS found, as in every cash business, was that certain income was reported and other income went unreported. "There was an undercover part of this investigation to track financial transactions," Allison said. "Tracing them from source through disposition, tracking those down the trail and linking the financial transactions, we were able to help corroborate the activity among the network of defendants. That provided incontrovertible evidence that this operation did exist. Once the search warrants were executed and plea agreements were set, the means and methods that could have been employed were shortcutted. Because of the generally good cooperation by the defendants the degree of evidentiary gathering was lessened. Each individual defendant and attorney underwent discussions with U.S. Attorney Phillip Halpern. As a result, trails that we normally would have followed did not have to be followed."

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