Bay City Man Sentenced for Filing False Tax Returns
Douglas D. Henry, 63, of Curran, Michigan, was sentenced yesterday to 22 months imprisonment and one year supervised release for filing false tax returns, United States Attorney Barbara L. McQuade announced today.
Ms. McQuade was joined in the announcement by Special Agent in Charge Erick Martinez, Internal Revenue Service-Criminal Investigation.
In addition, United States District Judge Thomas Ludington also ordered Henry to pay a special assessment of $100 and restitution to the Internal Revenue Service of $305,822.34.
Henry pleaded guilty in 2010 to one count of filing a false tax return for the year of 2001. According to court documents, between 1999 and 2002 Henry was the CEO of Incat, Inc. Rather than taking a salary in his own name, Henry directed Incat to make salary payments to his wholly-owned corporation, Top Dollar, Inc. During 2001 and 2002, Henry filed corporate income tax returns for Top Dollar, Inc., in which he reported the salary payments, but falsely reported that Top Dollar had paid large sums for "cost of goods sold" and "expenses," reducing its taxable income to zero. In fact, Top Dollar produced no goods and had no significant expenses.
Henry and his wife filed joint personal income tax returns for 2001 and 2002 which did not declare his salary from Incat. The 2002 personal tax return also did not report a large severance payment he received when he left Incat. Neither Henry nor Top Dollar, therefore, paid any income tax on his salary or severance payment from Incat. The resulting tax loss to the government was $305,822.34.
"This sentence sends a clear message regarding the filing of false tax returns. People who falsely report their income to evade paying taxes, as Douglas Henry did, will go to jail", said Yolanda Pearson, Public Information Officer IRS-Criminal Investigation.
The investigation of this case was conducted by Special Agents of the Internal Revenue Service-Criminal Investigation and prosecuted by Assistant United States Attorney Robert W. Haviland.