springfield man pleads guilty to charges related to
$500,000 fraud scheme
SPRINGFIELD, Mo. – Beth Phillips, United States Attorney for the Western District of Missouri, announced that a Springfield, Mo., man pleaded guilty in federal court today to charges related to a scheme in which he defrauded a Springfield woman of more than $500,000.
Kenneth Edward Godat, 40, of Springfield, waived his right to a grand jury and pleaded guilty before U.S. Magistrate Judge James C. England to a federal information that charges him with tax evasion and with structuring financial transactions in order to evade federal reporting requirements.
By pleading guilty today, Godat admitted that he stole more than $500,000 from a woman who believed she was investing in his business from Oct. 5, 2007, through March 12, 2008. Godat met the victim in September 2007 when he was performing work on her house. He claimed that his tree-trimming and debris-clearing business would work as a subcontractor on Federal Emergency Management Agency (FEMA) disaster relief contracts. The victim was to contribute capital to the venture in order to finance equipment, salaries, and other business-related expenses, then they would split the profits.
Godat told the victim that he would subcontract through a man named John Smitz, who did business as Tennessee Tree Company; in reality, neither John Smitz nor Tennessee Tree Company existed. From October 5, 2007, through March 12, 2008, the victim provided Godat with a total of $562,427.43. In order to obtain funds from her, Godat provided false and fraudulent documents to her, purporting to verify his expenses on the business venture. These included phony letters, bills-of-sale, and contracts. On October 23, 2007, Godat gave the victim $25,000 of her own money, which he told her constituted profits from the fictitious FEMA contracts.
Godat also admitted that he was aware that banks are required by law to report any financial transactions greater than $10,000 to the government. In order to circumvent this reporting requirement, and to hide his income from the IRS, Godat engaged in (or caused his victim to engage in) a series of financial transactions below the $10,000 threshold.
According to today’s plea agreement, Godat failed to file tax returns for 2007 and 2008 that reported the income he received from his victim. As a result of Godat’s tax evasion, the total tax loss to the government for those two years was approximately $148,910.
Under the terms of today’s plea agreement, Godat must pay $537,427 in restitution to the victim of his fraud scheme. He must also file complete and correct federal income tax returns and pay any taxes, interest and penalties that are owed.
Under federal statutes, Godat is subject to a sentence of up to 10 years in federal prison without parole, plus a fine up to $500,000 and an order of restitution. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.This case is being prosecuted by Assistant U.S. Attorney Steven M. Mohlhenrich. It was investigated by the Federal Bureau of Investigation and IRS-Criminal Investigation.