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Ex-prison doctor pleads guilty to IRS scheme

Dennis Erik Fluck Von Kiel, 58, of New Tripoli, the former medical director of Lehigh County Prison, pleaded guilty today to 17 counts for schemes involving thousands of dollars.

Officials said Von Keil defrauded the IRS and the Department of Health and Human Services out of hundreds of thousands of dollars, obtained financial aid grants for his four eldest children, filed false claims for social security disability insurance and lied at a bankruptcy proceeding.He pleaded guilty to conspiracy to defraud the United States, five counts of attempting to defeat or evade a federal tax, one count of attempting to obstruct the due administration of the internal revenue code, five counts of failure to file tax returns, one count of wire fraud and aiding and abetting wire fraud, one count of perjury in a bankruptcy proceeding, one count of financial aid fraud and aiding and abetting financial aid fraud, and two counts of mail fraud and attempted mail fraud.Since 2001, officials said Von Kiel has engaged in a series of illegal schemes which were designed to help him evade creditors, including the Department of Health and Human Services to whom Von Kiel owed hundreds of thousands of dollars in outstanding medical school loans.He tried to defraud the IRS in order to avoid paying more than $200,000 in personal income taxes.Von Kiel also lied on applications to the Department of Education for financial student aid for four of his children, which enabled them to receive more than $36,000 in federal Pell Grants.Von Kiel tried to file a fraudulent claim for social security disability benefits by falsely claiming that he suffered from post-traumatic stress disorder.Von Kiel is a doctor of osteopathy whose medical practice included treating inmates at LCP from approximately March 1989 until approximately August 2013.Most of Von Kiel's schemes involved him pretending to become a minister of a "church" called the International Academy of Lymphology (which later changed its name to the International Academy of Life and then the Christian Forum Assembly), purporting to take a "vow of poverty," and then claiming that he had no taxable income because his earnings belonged to "church."Von Kiel convinced his employer that he was exempt from federal tax withholdings and directed his employer to deposit his bi-weekly paychecks into bank accounts for his "church."Once the money arrived in those accounts, co-conspirators would transfer nearly the same amount of money into Pennsylvania bank accounts controlled by Von Kiel. Von Kiel then used the money to pay for all of his family's day-to-day living expenses and to buy some luxury items.Von Kiel has been held without bail at the Federal Detention Center since his arrest last February. Von Kiel also faces up to three years of supervised release, restitution of $256,920 to the IRS, $262,303 to the Department of Health and Human Services and $36,314 to the Department of Education, forfeiture of $165,988, a fine of up to $2.89 million and a $1,700 special assessment.The plea agreement recommends a 41-month prison term. U.S. District Court Judge Jeffrey L. Schmehl will make the final determination on sentencing at a hearing scheduled for April 20.The case was investigated by the Internal Revenue Service Criminal Investigations, the FBI, and the Department of Education's Office of Inspector General.