Jury returns tax evasion conviction for man who operated popular Catholic website

    FILE -- Michael Galloway is seen in a 2012 file photo. (KBAK/KBFX)

    A jury in Fresno convicted a Bakersfield man of four counts of tax evasion on Wednesday.

    Michael Galloway owned and operated the website, Catholic Online, which, according to court documents, generated revenue by selling advertising and hosting to faith-based businesses.

    “Mr. Galloway operated Catholic Online which accepted donations for victims of the 2004 Indian Ocean Tsunami and 2005 Hurricane Katrina,” Michael T. Batdorf, special agent in charge, IRS Criminal Investigation, said in a press release. “Mr. Galloway used the funds for personal and business expenses; making those donations taxable income."

    Between the 2003 and 2006 tax years, Galloway improperly deducted personal expenses as business expenses, including his homeowner’s association fees for his personal residence, car payments and insurance, utilities and cable service for his personal residence, tile work and personal legal fees.

    In 2003, Galloway reported an income of $13,241. In 2004, he reported an income of $ 28,846. In 2005, he reported an income of $60,438. In 2006, his reported income was $23,053.

    During that time Galloway owned a home at the golf course in Bakersfield, which he had bought for $850,000. During those years he made mortgage payments that totaled more than $78,000 each year. These figures amount to a claim by Galloway that he earned only $4,702 and yet was able to make more than $320,000 in mortgage payments.

    Court documents show he underreported his and his spouse’s taxable income during those years by at least $671,755, resulting in an additional tax due and owing of over $102,000.

    Galloway is scheduled to be sentenced on June 18. He faces a maximum penalty of five years in prison on each count and a $100,000 fine.

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