NEW CANAAN MAN ADMITS DECADE-LONG TAX EVASION SCHEME
David B. Fein, United States Attorney for the District of Connecticut, today announced that SHERWOOD SCHAUB, also known as “Andy Sherwood,” 70, of New Canaan, waived his right to indictment and pleaded guilty yesterday, February 28, before United States District Judge Janet Bond Arterton in New Haven to two counts of tax evasion.
According to court documents and statements made in court, SCHAUB has owned and operated an executive search business and other businesses that have used a variety of names, including Goodrich & Sherwood Company, Goodrich & Sherwood Associates, Inc., Whittenwood Associates, Inc., Whittenwood International, Inc., GSA International, Inc., Stanton Chase of New York, and G&S Holding Limited Partnership. From approximately 1994 through 2006, SCHAUB’s business entities repeatedly failed to pay federal taxes that had been withheld from employees’ paychecks. During these years, the Internal Revenue Service assessed SCHAUB with penalties for failing to pay these withholding taxes, but SCHAUB failed to pay these penalties, as well. As part of the scheme, SCHAUB willfully attempted to avoid paying taxes by causing his business entities to operate under various names, and by causing his income to be paid in his wife’s name rather than his own in the form of checks and wire transfers to her bank account.
Through this scheme, SCHAUB evaded the payment of $1,314,146.86 in taxes, interest and penalties.
In addition, in 2005, SCHAUB received taxable income in the form of checks deposited into his wife’s bank account in the amount of $164,100. SCHAUB failed to pay taxes on this income, and also failed to file an income tax return for the 2005 tax year.
Judge Arterton has scheduled sentencing for May 22, 2012, at which time SCHAUB faces a maximum term of imprisonment of five years and a fine of up to $100,000 on each count. As part of his plea agreement, SCHAUB has agreed to cooperate with the IRS and to pay all back taxes, penalties and interest.
This matter was investigated by the Internal Revenue Service – Criminal Investigation. The case is being prosecuted by Assistant United States Attorney Susan L. Wines.
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