A federal judge today sentenced William A. Herder of Richland County, Ohio, to 37 months in prison for tax crimes, the Justice Department and the Internal Revenue Service (IRS) announced. U.S. District Judge Sara Lioi also ordered Herder to pay restitution to the IRS. On May 21, 2012, an Akron, Ohio, jury convicted Herder on all counts of an indictment that charged Herder with one count of tax evasion, one count of corruptly endeavoring to obstruct the administration of the Internal Revenue laws and five counts of willful failure to file tax returns.
According to the evidence at trial, Herder sold insurance for Aflac Inc., a nationwide supplemental insurance provider, from an office in Mansfield, Ohio. Despite earning substantial income from insurance sales and receiving warning notices and letters from the IRS about his obligations under the tax laws, Herder failed to file timely and valid tax returns for the years 2000-2009. For the year 2000, Herder filed a tax return on which he falsely claimed that he had not earned any income. Subsequently, Herder failed to file any tax returns for the 2001-2009 tax years.
The trial evidence also established that in addition to failing to file tax returns and pay taxes, Herder attempted to conceal his assets from the IRS. In 2003, Herder transferred title to his house to a bogus foundation he established in Utah called “The Mentor Foundation.” Herder also cashed out an Individual Retirement Account and a life insurance policy, converted large amounts of cash to silver coins, and paid personal and business expenses with cash and money orders, all in an effort to prevent the IRS from collecting his unpaid taxes.
According to trial evidence, Herder submitted numerous obstructive letters and documents to the IRS in an effort to prevent the IRS from assessing and collecting his taxes. In these letters, Herder falsely claimed, among other things, that the tax laws were not applicable to him. Herder sent similar letters to the companies for whom he sold insurance and to his credit union, all designed to prevent these companies from complying with IRS levies. Herder obtained these obstructive materials from several sources, including Joseph Flickinger, who was previously convicted and sentenced for a tax fraud conspiracy and later enjoined from preparing tax returns for others.
Herder has remained in custody since the trial.
Kathryn Keneally, Assistant Attorney General for the Justice Department’s Tax Division, thanked special agents of IRS - Criminal Investigation, who provided valuable assistance in conducting the investigation, and Tax Division Trial Attorneys Melissa S. Siskind and Jeffrey McLellan, who prosecuted the case.
Additional information about the Tax Division and its enforcement efforts may be found at www.justice.gov/tax .