SEATTLE MAN SENTENCED TO HOME DETENTION, COMMUNITY SERVICE FOR FILING FALSE TAX RETURN
Former President of Bekins Moving and Storage failed to report income of $2.5 million
PAUL D. BEKINS, 47, former President, Treasurer and majority stock owner of Bekins Moving and Storage in Seattle, Washington, was sentenced in U.S. District Court in Seattle today to six months of home detention, 18 months of supervised release and 300 hours of community service for Filing a False Tax Return. According to the charging information, on his Form1040, BEKINS declared his “Other Income” in 1999 to be only $77,515 when, in fact, BEKINS knew the correct amount was $2,652,617.
Bekins Moving and Storage has operated in the Northwest for more than a century. PAUL D. BEKINS, a 4th generation member of the Bekins family, took over as President of the company in 1988. In 1998 and 1999, BEKINS sold off assets of Bekins Moving and Storage and attempted to hide more than $3.7 million in income from these sales in offshore accounts. The complex scheme was designed to help BEKINS avoid more than $1.3 million in taxes. BEKINS no longer serves as President of the company.
According to a plea agreement entered in September, 2004, BEKINS paid $50,000 to attend a seminar and join a group called Tower Organization of Worldwide Executive Resources (Tower) incorporated in the Turks and Caicos Islands, British West Indies. The company was operated primarily by Paul D. Harris and Lester R. Retherford. Tower created international business corporations that did not have any independent economic reality or represent ongoing businesses, but in whose names bank accounts and securities trading accounts were opened in the United States, the Turks and Caicos Islands, and elsewhere. Tower members were then allowed to use the international business corporations to evade paying income taxes. BEKINS testified against Harris and Retherford in U.S. District Court in Denver for operating the scheme intending to evade income taxes. Chief U.S. District Judge Robert S. Lasnik cited BEKINS’ extensive testimony against others in the scheme as a reason he would not sentence BEKINS to prison.
The plea agreement details numerous elaborate schemes, all of which involved the laundering of corporate funds through offshore bank accounts. BEKINS caused substantial portions of these laundered funds to be transferred back to him. BEKINS intentionally concealed these funds from his corporation and from the IRS. In so doing he evaded more than $1.3 million in federal income taxes.
Addressing the court, BEKINS admitted he had been motivated by greed and had “brought shame on his family, employees and friends.” Judge Lasnik noted BEKINS “must have always known he would be caught. That is a prison in and of itself.”
To date, BEKINS has repaid approximately $1,600,000. He remains liable for a significant additional amount as a result of penalties and interest.
This case was investigated by the Internal Revenue Service, Criminal Investigations Division, and prosecuted by Senior Litigation Counsel Robert Westinghouse and Assistant United States Attorney Annette Hayes.
For additional information please contact Emily Langlie, Public Affairs Officer, United States Attorney’s Office for the Western District of Washington, at (206)553-4110.