Falmouth businessman found guilty of tax fraud
A jury has found a Falmouth businessman guilty of several counts of tax fraud committed while he was president of a former poker chip manufacturer in Yarmouth.
John M. Kendall, 72, the president of the now-closed Chipco International, was found guilty in Cumberland County Superior Court on all eight counts of tax fraud, Maine Attorney General Janet Mills announced Friday. Kendall, who is free on bail until his sentencing date, could face up to 10 years in prison and $55,000 in restitution fines. He has paid back about $110,000 of the roughly $165,000 he owes in total restitution.
State investigators found that between late 2007 and the end of 2012, Kendall withheld income taxes from his employees and instead of paying them to federal and state tax authorities, used the funds to pay for business and personal expenses, according to Mill's announcement. Some of those expenses included the mortgage for his Falmouth house, legal fees associated with his personal bankruptcy and membership fees for two country clubs.
The state investigation also found that Kendall “conspired with one of his finance employees to evade payment of withholding taxes by paying certain management employees ‘off the books.’” In addition, Kendall falsely underreported his personal income in 2009.
Six other former employees at Chipco International have previously pleaded guilty to theft of unemployment benefits or income tax evasion. The state investigation found that Kendall used the unemployment benefits as a way to keep paying those employees while the company was experiencing cash flow problems because of various debts. The employees had also been paid “off the books” by Kendall for an additional amount.
The six former employees, who were not named in the announcement, have paid back about $47,100 as part of a payment plan for the approximately $110,453.20 they owe in total restitution, with Mills noting that they all cooperated and sought to resolve the case quickly.
Kendall’s charges included theft by misapplication of withholding taxes; conspiracy to commit withholding tax evasion; failure to truthfully collect, account or pay over withholding taxes; and making a false statement in a Maine income tax return, according to the Friday announcement.
Kendall is expected to be sentenced within the next 30 to 45 days.
The investigation was conducted by the Office of the Attorney General, the Criminal Investigative Unit of Maine Revenue Services and the Maine Department of Labor.
“Employers are entrusted with the obligation to deduct withholding taxes from their employees and to turn those taxes over to the IRS or Maine Revenue services,” Mills said in the Friday announcement. “The employer's responsibility to handle these funds truthfully and responsibly is crucial to the financial operation of our state. My office will vigorously prosecute those individuals who would abuse this trust by illegally diverting the taxes to enrich themselves or finance their business operations."
Read more
Most Recent
Most Recent
Comments