A Coventry man has been sentenced for filing a false federal income-tax return and failing to report the income he had earned from an Internet-based debt-elimination scheme.

Edward Dacey must serve five months of home confinement and two years of probation, Senior U.S. District Judge George C. Smith ruled yesterday in Columbus, Ohio.

According to court documents and testimony, Dacey was employed at Ridgewood Holdings, a business trust located in Rhode Island.

In 2004, Ridgewood Holdings marketed a debt-elimination service over the Internet for an Ohio company known as Liberty Resources. Dacey admitted that he did not report, on his return for 2004, about $122,000 in income that he received from Ridgewood.

Earlier this year, Mark Browning of Pickerington, Ohio, pleaded guilty to one count of conspiracy to commit money laundering. The charge related to his involvement in Liberty.

Liberty's Web site told potential clients that they could eliminate their credit-card debt by taking advantage of what Liberty described as a loophole in banking laws. In fact, the Web site contained "numerous false and fraudulent representations regarding the effectiveness of this scheme," the Internal Revenue Service's criminal investigation unit said.

Part of the money solicited was paid to Ridgewood Holdings, the IRS said.

Details of the case were disclosed by Gregory G. Lockhart, U.S. Attorney for the Southern District of Ohio, and Cromwell A. Handy, special agent in charge, Internal Revenue Service, criminal investigation unit.

"IRS criminal investigation will always vigorously investigate individuals that prey on unsuspecting taxpayers," Handy said in a statement.