WASHINGTON – John Walter Kaber, a resident of Bloomfield, Mich., was sentenced to 37 months in prison for tax evasion, the Justice Department and Internal Revenue Service (IRS) announced today.
According to the plea agreement, Kaber was the owner of Merchant Processing, a business that installed credit card processing systems. Despite earning substantial income from Merchant Processing and incurring a tax liability on that income, Kaber failed to file timely U.S. Individual Income Tax Returns (IRS Forms 1040) for the 1991 and 2005 tax years. Kaber filed Forms 1040 for the 1992-1996 and 2000-2004 tax years that reflected a tax due and owing, but failed to pay the taxes due. Kaber also failed to pay a portion of the employment taxes that were due to the IRS during the 2000-2003 tax years.
Kaber’s total tax due and owing to the United States for the 1991-1996 and 2000-2005 tax years, including both income taxes and employment taxes, is $868,319.70. In addition to the prison term, the court ordered Kaber to serve two years of supervised release and ordered Kaber to pay $868,319.70 in restitution to the IRS.
According to the plea agreement, in order to carry out his tax evasion scheme and to conceal his income and assets from the IRS, Kaber, among other things, used his wife’s name to purchase and refinance two parcels of real property and to purchase a boat, boat slip and vehicle. Kaber also sought to prevent the IRS from collecting unpaid taxes from his bank accounts by, among other things, cashing checks rather than depositing them in the bank, depositing business receipts into his wife’s checking account, and removing his name from a joint bank account after it became subject to an IRS levy.
According to court documents, Kaber has an extensive criminal history that includes multiple convictions in Michigan for fraud-related offenses. Kaber was also the subject of a civil lawsuit in 2007, in which the United States District Court for the Eastern District of Michigan entered a judgment against him for his unpaid 1991-1996 federal income taxes.
This case was investigated by IRS-Criminal Investigation and was prosecuted by Tax Division Trial Attorney Melissa S. Siskind.
Additional information about the Justice Department’s Tax Division and its enforcement efforts may be found at www.justice.gov/tax.