INTERNET ENTREPRENEUR SENTENCED TO PRISON FOR TAX FRAUD
LYLE R. LARSON, 43, of Edmonds, Washington was sentenced yesterday in U.S. District Court in Seattle to a term of eighteen months in prison for filing a false income tax return. U.S. District Judge Marsha J. Pechman also ordered LARSON to pay restitution in the amount of $879,252.89. LARSON, the owner of software development company Red Planet Corp., pleaded guilty in April 2008 to filing a false tax return. As part of the plea, LARSON admitted that he had significantly under-reported his business income and failed to report self-employment taxes on his 2000 through 2003 individual income tax returns.
According to documents filed in this case and statements made in court, from 2000 to 2003 LARSON earned over $2.8 million in compensation and commissions as a self-employed computer programmer and consultant. However, he reported only $38,035 in business income on his income tax returns. During that time, LARSON purchased luxury items such as cars, a yacht, and real estate and made various personal investments. Additionally, LARSON filed no personal income tax returns for 2004, 2005, or 2007.
The case was investigated by the Internal Revenue Service Criminal Investigation (IRS-CI) and was prosecuted by Trial Attorney Michael J. Watling with the Department of Justice Tax Division.