The founders of a Utah-based global business were to appear in federal court this afternoon on charges they failed to report millions earned in the company's lucrative marketing structure.
A grand jury on Thursday charged Thomas E. and Leslie D. Mower with six counts of tax evasion and one count of conspiracy. Each charge carries a potential five years in prison and a $250,000 fine.
Federal prosecutors allege the Mowers, who divorced in July 2000, placed themselves atop their company's multilevel-marketing structure and concealed $3 million in commission income from business dealings in the United States, Australia and Malaysia.
The company itself, Neways Inc., is not accused of any wrongdoing. Neways sells personal care and nutritional products in dozens of countries.
The Mowers allegedly used false names and Social Security numbers to hide the income, which they reportedly failed to report on their tax returns between 1992 and 1997.
In addition to misrepresenting their annual income — for example, shaving an alleged $512,000 from their 1993 earnings — the Mowers falsified Neways' books and presented "phoney loan documents" to the Internal Revenue Service, the indictment states.
The couple allegedly used the unreported income to purchase 1,400 acres of land in Utah County's Hobble Creek Canyon and a warehouse, the company's manufacturing facility, in Salem, Utah County.
A call to Neways' corporate headquarters was not returned this morning.
According to its Web site, the Mowers founded Neways Inc. in 1992. The Internet site touts sales of $400 million a year in more than 23 countries, including Costa Rica, Czech Republic, Israel, Japan, Mexico, Russia and the United Kingdom.
However, Thursday's indictment puts Neways' highest worldwide sales in 35 countries at $144 million in 1996.
Neways' product lines include personal hygiene, cosmetics, herbal supplements, aromatherapy and fitness products. The products provide "healthy alternatives" to mainstream products that may contain harmful materials, according to the company's Web site.
According to an online profile, Thomas E. Mower is an industrial chemical manufacturer who holds two honorary doctoral degrees in biochemistry and herbology. His ex-wife, Leslie DeeAnn Mower, is a mother of seven and a former narcotics officer with the Salt Lake City Police Department, the Web site states.
The couple founded Neways' predecessor, Images and Attitudes Inc., in 1987 in Oregon, the indictment states.
The company describes itself as a "direct sales organization" with "one of the best compensation plans in the industry." Participants are paid commissions twice monthly and have the chance at two profit-sharing bonuses and a car bonus, according to Neways' Web site.
The case is being prosecuted by the Utah U.S. Attorney's Office and special attorneys from the Department of Justice's Tax Division.
E-MAIL: awelling@desnews.com