William R. Herder of Bellville, Ohio, was arrested today on federal tax charges, Assistant Attorney General of the Justice Department’s Tax Division Kathryn Keneally, U.S. Attorney for the Northern District of Ohio Stephen M. Dettelbach and Special Agent in Charge, Internal Revenue Service (IRS) Criminal Investigation, Cincinnati Field Office, Darryl K. Williams announced. On June 19, 2012, a federal grand jury sitting in Cleveland returned an indictment against Herder, charging him with corruptly endeavoring to impair and impede the due administration of the Internal Revenue laws, failure to file tax returns, failure to pay taxes, and structuring transactions to evade currency reporting requirements.
According to the indictment, Herder, an insurance salesman, failed to file timely and accurate income tax returns for the years 2000-2009 despite earning substantial insurance commissions and receiving warnings and notices from the IRS. Herder filed returns for the years 2010 and 2011 on which he reported that he owed taxes to the government, but failed to pay the almost $50,000 in taxes that he owed for those years.
The indictment further alleges that, to prevent the IRS from collecting his unpaid taxes, Herder attempted to conceal his assets and income. In 2004, Herder formed two entities in Nevada--one for the purpose of hiding his automobiles and another for the purpose of hiding his insurance business. Herder also began converting his insurance commission checks to cash and paying his expenses in cash to prevent the IRS from collecting his taxes from his bank account.
In addition to failing to file valid tax returns and hiding his assets from the IRS, the indictment alleges that Herder submitted numerous obstructive letters and documents to the IRS and the company for whom he sold insurance 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. In 2005, Herder also attempted to pay his taxes with a fake financial instrument called an “International Bill of Exchange.”
The case was investigated by special agents of IRS – Criminal Investigation and is being prosecuted by Tax Division Trial Attorneys Melissa S. Siskind and Jeffrey A. McLellan.