Two Public Employees Who Evaded Paying Taxes Are Sentenced

Deirdre M. Daly, United States Attorney for the District of Connecticut, and William Offord, Special Agent in Charge of IRS Criminal Investigation in New England, today announced that two public employees who previously pleaded guilty to tax evasion offenses have been sentenced in Hartford federal court.  Yesterday, U.S. District Judge Alvin W. Thompson sentenced TROY HESTER, 43, of Hartford, to 10 months of imprisonment, followed by three years of supervised release.  Today, Judge Thompson sentenced MICHAEL CARTER, 52, of New Haven, to four years of probation, the first six months of which CARTER must serve in home confinement under electronic monitoring.

This matter stems from an Internal Revenue Service investigation into State of Connecticut employees and others who had little or no federal withholding taken out of their paychecks and who failed to file income tax returns.  The investigation revealed that certain individuals submitted fraudulent W-4 forms claiming numerous exemptions, or that they were exempt, and had little or no money withheld from their wages.

According to court documents and statements made in court, during the 2008 through 2013 tax years, HESTER, while employed by the Metropolitan District Commission in Hartford, paid little or no federal income taxes on approximately $438,877 in income he received, resulting in a federal tax loss of approximately $70,480.  HESTER had submitted a Form W-4 claiming that he was “exempt” from federal withholding.

HESTER was ordered to pay more than $79,000 in back taxes and interest.

The investigation also revealed that HESTER failed to pay more than $24,000 in state taxes from 2007 through 2012.

CARTER, who was employed by the Connecticut Department of Mental Health and Addiction Services and worked as a nurse at the Connecticut Valley Hospital in Middletown, submitted a false Form W-4 to the state indicating that he had 99 exemptions and was exempt from tax withholding.  As a result, no money was withheld from his wages.  During the 2010 through 2012 tax years, CARTER paid no federal income taxes on more than $282,000 in income he received, resulting in a federal tax loss of $53,344.

CARTER was ordered to pay more than $56,000 in back taxes and interest.

This ongoing investigation is being conducted by the Internal Revenue Service – Criminal Investigation Division.  The case is being prosecuted by Assistant U.S. Attorney Susan Wines.