Justin D. Schoenauer, 41, also known as Corey J. Schoenauer, a resident of Twin Falls County, Idaho, was sentenced late yesterday in U.S. District Court for the District of Idaho to 27 months in prison for income tax evasion. Schoenauer was also sentenced to three years of supervised release and ordered to pay $429,436 in restitution. Schoenauer was indicted in February 2012 and pleaded guilty to the offense on Oct. 30, 2012.
According to court documents, Schoenauer was a general contractor who, for the past 10 years, operated a sole proprietorship called Patagonia Construction, a business engaged primarily in building homes. Schoenauer admitted that during tax years 2005 through 2008, he concealed Patagonia’s business receipts. Schoenauer further admitted that he directed some customers to make checks payable to him personally, rather than to Patagonia, then ensured that those checks were not deposited into Patagonia’s main bank account. When having tax returns prepared, Schoenauer falsely told his return preparer that all of his business receipts were deposited into the main Patagonia bank account, thereby concealing Patagonia’s gross receipts and causing the preparation and filing of false tax returns. Schoenauer paid the Internal Revenue Service (IRS) $35,000 at sentencing, which will be applied to his outstanding tax liability.
“When a business owner cheats on his taxes, he gains an unfair advantage over honest businesses and cheats all honest taxpayers,” said Assistant Attorney General for the Justice Department’s Tax Division Kathryn Keneally. “This sentence shows that we will hold such criminals accountable.”
“Paying income tax is a solemn obligation of citizenship,” said U.S. Attorney for the District of Idaho Wendy J. Olson. “Integrity in business transactions required to be reported to the federal government is essential to the proper functioning of our economy. Those who hide income, evade taxes and launder profits undermine our democracy. This sentence sends a strong message that those who seek to avoid their tax responsibilities will be properly punished.”
“The license to run a business is not a license to evade paying taxes,” said Richard Weber, Chief, IRS Criminal Investigation. “Mr. Schoenauer’s misconduct, concealing business receipts and having checks made payable to himself, is offensive to all honest business owners. IRS Criminal Investigation continues to protect the U.S. tax system by investigating and bringing to justice individuals who violate tax laws.”
Assistant Attorney General Keneally and U.S. Attorney Olson commended the efforts of special agents from IRS-Criminal Investigation, who investigated the case, and Tax Division Trial Attorneys Michael J. Romano and Mark L. Williams, who prosecuted the case.