News and Press Releases

News and Press Releases

Former toy company owner pleads guilty for failing to pay over federal employment taxes

FOR IMMEDIATE RELEASE
September 26, 2012


MINNEAPOLIS—Today in federal court, the former owner of a toy company in Edina pleaded guilty for failing to pay over federal employment taxes. Kim Robert Calkins, former co-owner of Princess Soft Toys Inc., entered his plea before United States District Judge Paul A. Magnuson. Calkins was charged via an Information on September 11, 2012.

In his plea agreement, Calkins admitted that from 2008 to 2010, he failed to pay over all of the employment taxes to the Internal Revenue Services (“IRS”) for Princess Soft Toys employees. From the third quarter of 2008 to the final quarter of 2010, Calkins failed to pay over any of the employment taxes that the company had withheld from its employees. Despite receiving regular notices from Paychex informing him that the employment taxes were still due, Calkins neglected to pay the amount owed. The total tax loss in this case is $852,361.54.

For his crime, Calkins faces a potential maximum penalty of five years in federal prison. Judge Magnuson will determine his sentence at a future hearing, not yet scheduled.

This case is the result of an investigation by the IRS-Criminal Investigation Division and the Federal Bureau of Investigation. The case is being prosecuted by Assistant U.S. Attorney Nicole A. Engisch.

In a related case, on February 8, 2012, Judge Magnuson sentenced Calkins’ wife and former co-owner of Princess Soft Toys, Sandra Lee Calkins, to 66 months in prison for defrauding Central Bank and 42 investors out of approximately $9 million. She was charged on April 29, 2011, and pleaded guilty on May 26, 2011.

In her plea agreement, she admitted that between January of 2008 and March 5 of 2010, she falsified financial statements regarding her company in order to renew a $3.25 million line of credit at Central Bank. She admitted including false information relative to revenue and net assets in those financial statements. As a consequence of the fraud, the credit line was renewed, and she made multiple draws against it totaling $3,575,000. Central Bank suffered a loss of approximately $1.6 million.

She also admitted that between January of 2008 and 2010, she defrauded individuals into investing or loaning money to Princess Soft Toys through false financial statements or other misrepresentations. The total losses to individual investors exceeded $7 million.

This case was also the result of an investigation by the Federal Bureau of Investigation and the IRS-Criminal Investigation Division. It was prosecuted by Assistant U.S. Attorney Tim Rank.

Per U.S. Department of Justice policy, the U.S. Attorney’s Office is not allowed to provide the age and city of residence for defendants charged in criminal tax cases.

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