Delaware Business Owner Sentenced to 18 Months in Federal Prison for Multi-Year Tax Evasion Scheme

WILMINGTON, Del. - A Townsend, Delaware man was sentenced yesterday to 18 months in prison for tax evasion. Chief U.S. District Judge Colm F. Connolly imposed the sentence.
According to court documents, John Kungu, 62, the owner of Advanced Nursing Care, engaged in a calculated, multi-year scheme to avoid paying nearly $1.2 million in taxes. Between 2018 and 2021, Kungu submitted multiple false sworn statements to the Internal Revenue Service (IRS) claiming that he could not afford to pay his tax liabilities, despite having millions of dollars in undisclosed bank accounts. On one occasion, Kungu offered to settle his tax debt for $35,000, claiming he would need to take out a loan, while simultaneously holding over $5.1 million in hidden accounts.

Additionally, from 2018 through 2020, Kungu filed false personal and corporate tax returns by intentionally categorizing hundreds of thousands of dollars in personal benefits and payments to himself as business expenses, thereby improperly reducing his tax burden to the government. Kungu intentionally withheld financial records from his bookkeeper and tax preparer to conceal his evasion.

"John Kungu built a highly successful business, but instead of paying his fair share, he chose to line his own pockets at the expense of every law-abiding taxpayer," said U.S. Attorney Benjamin L. Wallace. "When caught, he doubled down on his fraud, lying under oath to the IRS to hide millions of dollars in wealth. Yesterday's sentence demonstrates that those who view tax evasion as a mere cost of doing business will face serious consequences, including time in federal prison."

"Yesterday's sentencing is a direct result of the excellent partnership the IRS and the U.S. Attorney's office has in combating violations of Federal law," said Yury Kruty, Special Agent in Charge IRS Criminal Investigation, Philadelphia Field Office. "This sentence shows how seriously the courts take Federal tax crimes and should serve as a deterrent to those who might contemplate similar fraudulent actions."

Upon Kungu's release from prison, he will be required to serve 3 years of supervised release. In addition to his prison sentence, Kungu was ordered to pay a $75,000 fine and $1,186,573.62 in United States Attorney's Office District of Delaware restitution to the IRS. Kungu has since paid the restitution amount, along with applicable interest and penalties.

IRS Criminal Investigation investigated the case. Assistant U.S. Attorneys Alexander P. Ibrahim and Claudia L. Pare prosecuted the case.

On April 7, the Department of Justice announced the creation of the National Fraud Enforcement Division ("Fraud Division"). The Fraud Division is investigating and prosecuting those who commit fraud against the American people. The Department's work to combat fraud supports President Trump's Task Force to Eliminate Fraud, a whole-of-government effort chaired by Vice President J.D. Vance to eliminate fraud, waste, and abuse within Federal benefit programs.

A copy of this press release is located on the website of the U.S. Attorney's Office for the District of Delaware. Related court documents and information are located on the website of the District Court for the District of Delaware or on PACER by searching for Case No. 1:24-cr-00056-CFC.