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Department of Justice
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FOR IMMEDIATE RELEASE
Wednesday, July 18, 2018

Creator Of “Fitwall” Exercise Equipment Pleads Guilty To Failing To File Income Tax Returns And Health Care Benefits Fraud

WASHINGTON - A resident of Cheyenne, Wyoming and creator of “Fitwall” exercise equipment pleaded guilty today to two counts of willfully failing to file his income tax returns and one count of making a fraudulent application for health care benefits.  The change of plea was announced by Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division and U.S. Attorney Mark A. Klaassen for the District of Wyoming, whose offices are engaged in a joint prosecution of this case.

According to court documents, from 2008-2012, Douglas E. Brendle owned and operated Brendle Climbing Systems, LLC, which sold Fitwalls.  In January 2013, Brendle sold the rights to Fitwall to investors, and in exchange received nearly $1.5 million in payments during the period of 2013-2014.  Despite receiving this income, Brendle failed to file individual income tax returns or pay income taxes in 2013 or 2014.  Brendle’s conduct resulted in a tax loss of $404,501.

Additionally, during 2013-2014, Brendle fraudulently received health care benefits for himself and his family from Wyoming Medicaid, a jointly administered federal-state health care program that pays for medical care for eligible low-income individuals and families.  In December 2013, Brendle caused a false renewal application to be filed for Wyoming Medicaid claiming his household had no income.  During 2013–2014, Wyoming Medicaid paid Brendle over $20,000 in benefits to which he and his family were not entitled.

Sentencing is scheduled for September 24, 2018.  Brendle faces a statutory maximum sentence of three years in prison, as well as a period of supervised release, restitution and monetary penalties.

“These cases take substantial time and effort to investigate and prosecute, but serve as a reminder that no person is above the law, and we will hold those accountable who use improper means to avoid taxes,” said U.S Attorney Klaassen.  “We also cannot allow false claims against our health care programs to siphon resources intended to assist our most needy families.” 

Principal Deputy Assistant Attorney General Zuckerman and U.S. Attorney Klaassen commended the work of special agents of Internal Revenue Service Criminal Investigation office in developing the case against Brendle, as well as Assistant U.S. Attorney Eric J. Heimann and Trial Attorney Eric C. Schmale of the Tax Division, who are prosecuting the case.

Additional information about the enforcement efforts of the United States Attorney’s Office and the Tax Division may be found on their respective websites.

Topic(s): 
Tax
Component(s): 
Press Release Number: 
18-942
Updated July 18, 2018