Taxman’s Holiday
The Minnesota Supreme Court has disbarred a former tax judge convicted of tax crimes.
WCCO CBS Minnesota reported on the crimes
A former U.S. tax court judge is sentenced to more than two years in prison for a tax fraud conspiracy with her husband.
Diane Kroupa, 61, is sentenced to 34 months in prison Thursday for tax fraud. Her husband, 63-year-old Robert Fackler, also pleaded guilty in the case and is sentenced to 24 months is prison.
According to the U.S. Attorney’s office, Kroupa was appointed to the judgeship in 2003 for a term of 15 years. Her husband, Fackler, was a self-employed lobbyist and political consultant while Kroupa was on the bench. The couple owned a home in Plymouth and a second home in Easton, Maryland, while the two worked in Washington, D.C.
Prosecutors say Kroupa and Fackler attempted to keep the IRS from accurately determining their joint income taxes by listing numerous personal expenses as businesses expenses related to Fackler’s consulting firm. Some of those expenses included rent and utilities for their Maryland home, utilities and renovation of their Minnesota home, Pilates classes, spa and massage fees, jewelry, clothing, wine club fees, and several international vacations.
In their plea agreement, Kroupa and Fackler also admitted to deducting several business expenses more than once, and failing to report some forms of income, including a $44,000 land sale in South Dakota. The plea agreement also said the couple purposely concealed documents from their tax preparer and the IRS during an audit.
The couple was also ordered to pay more than $450,000 in restitution.
Minnesota Lawyer reported on the sentences.
As part of the conspiracy, they worked together each year to compile numerous personal expenses for inclusion as supposed “business expenses” for Grassroots Consulting in their joint tax return. Those expenses included: rent and utilities for the Maryland home; utilities, upkeep and renovation expenses of the Minnesota home; Pilates classes; spa and massage fees; jewelry and personal clothing; wine club fees; Chinese language tutoring; music lessons; personal computers; and expenses for vacations to Alaska, Australia, the Bahamas, China, England, Greece, Hawaii, Mexico and Thailand…
Kroupa, 61, was sentenced to 34 months and Robert Fackler, 63 was sentenced to 24 months. They must pay $457,104 in joint restitution.
Bloomberg BNA raised the question whether the conviction might impact on tax court rulings in which the judge participated.
The discipline was imposed by stipulation.
In an related matter, the District of Columbia Board on Professional Responsibility has approved the consent disbarment of an attorney convicted of federal offenses described by the United States Attorney for the Northern District of Florida
James R.J. Scheltema, 56, of Pensacola, has pled guilty to filing false tax returns and tax evasion. The guilty plea was announced by Christopher P. Canova, United States Attorney for the Northern District of Florida.
Between 2010 and 2013, Scheltema, a certified public accountant and attorney, received restricted stock as compensation for his legal and accounting services. He initially reported no compensation on his 2011 and 2012 individual income tax returns, despite receiving substantial compensation from stock issuance and the sale of stock. Scheltema also failed to file timely 2013 individual and corporate income tax returns for two companies he owned and operated. Scheltema tried to evade notice of stock sales by instructing checks be made payable to his wife and to one of the companies he owned, rather than to himself. After being notified of the IRS investigation, Scheltema filed amended 2011 and 2012 returns and a delinquent 2013 return, which were still false.
The sentencing hearing is scheduled for April 10, 2017, 3:00 p.m.
For each charge of filing false tax returns, Scheltema faces a maximum of three years in prison. For the tax evasion charge, he faces a maximum of five years in prison.
(Mike Frisch)