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Published: Saturday, October 9, 2010, 12:01 a.m.

Doctor charged in IRS case

An Everett man appeared in U.S. District Court in Seattle where he is accused of trying to hide money from the IRS.

SEATTLE — Three days after his office was searched by federal agents, an Everett doctor was charged Friday with trying to hide money from the IRS.
Dr. Delbert Whetstone appeared Friday in U.S. District Court in Seattle where he is accused of structuring bank transactions to avoid financial reporting requirements.
A structuring scheme involves splitting cash transactions that exceed $10,000 into smaller amounts in an effort to avoid reporting requirements. A federal agent working the case said such banking transactions often are seen among drug traffickers, according to court papers.
Whetstone for many years has operated an osteopathic clinic at 9629 Evergreen Way. Agents from the Drug Enforcement Administration descended on his practice early Tuesday morning with a federal search warrant. They seized $46,784 from the bottom drawer of a locked filing cabinet, court papers said.
A former employee at the clinic reportedly told DEA agents that the doctor kept two accounts. Cash payments went into a credit union account; insurance and Labor and Industries payments were deposited at a local bank.
According to court papers, the doctor’s instructions were to keep the total deposits made on a given day under $10,000 “because he didn’t want to deal with being audited,” the former employee told investigators.
During the summer, Whetstone allegedly gave the worker several deposit envelopes which were stamped with February and March 2010 dates.
Transaction records in August show more than three dozen deposits into the credit union account totalling $114,935. All were for less than $10,000.
“The deposits ... represent a pattern of structured deposits often used by drug traffickers in an effort to avoid generating Currency Transaction Reports, thereby potentially hiding funds from the IRS and law enforcement,” a DEA agent wrote in the criminal complaint.
The medical office worker was laid off in mid-August. The former employee told investigators that the doctor explained the layoff was necessary because he’d’ recently dropped many patients who were abusing the medications they were prescribed.
The DEA agent said in court papers that he learned Thursday that Whetstone had withdrawn $457,199 from the credit union checking account and made the check payable to his wife. That left $100 in the account.
Whetstone was booked into the federal detention center at SeaTac. A detention hearing is set for next Wednesday, said Emily Langlie with the U.S. Attorney’s office.

Eric Stevick: 425-339-3446; stevick@heraldnet.com.
Story tags » EverettCrimeWhite-Collar Crime

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