Watertown Man Sentenced for Tax Evasion
Assistant United States Attorney
US Attorney Brendan V. Johnson announced that a Watertown man charged with Tax Evasion was sentenced on October 24, 2011, by US District Judge Charles B. Kornmann. Timothy M. Engels, age 60, was sentenced to 10 months in prison, three years of supervised release, a $30,000 fine, and total restitution of $362,200 ($117,600 in criminal restitution and $244,400 in unpaid taxes, penalties, and interest).
Engels was indicted by a federal grand jury on January 4, 2011. The indictment charged Engels with one count of conspiracy to defraud the United States, three counts of tax evasion, five counts of filing false tax returns, and five counts of structuring currency transactions. Engels pled guilty to count 3 of the indictment charging Tax Evasion on June 9, 2011.
Engels was the owner of The Harbor Bar in Watertown, South Dakota. The Harbor Bar was organized as an “S” corporation, and Engels was the sole shareholder of the corporation. Accordingly, pursuant to the relevant internal revenue laws, all income from The Harbor Bar passed directly to Engels, and he was required to report it as income on his personal tax return. Engels admitted that he knowingly omitted income from The Harbor Bar on his 2005 tax returns. The restitution, unpaid taxes, penalties, and interest that Engels paid at sentencing relate to tax years 2004 through 2007.
The investigation was conducted by the Criminal Investigation Division of the IRS. Assistant US Attorney Kevin Koliner prosecuted the case.
Engels will be allowed to self-report to the Bureau of Prisons at a later date.