Former Kansas City Business Owner Sentenced to Prison for Tax Crime
The former owner of a Kansas City, Missouri, business was sentenced today to 18 months in prison for obstructing the government’s effort to collect more than $378,000 in taxes owed, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division and United States Attorney Timothy A. Garrison of the Western District of Missouri.
According to court documents and information provided to the court, Barrett Prelogar, 48, was a founding partner of a now-defunct company, Winntech Digital Systems Inc. (Winntech). Winntech produced electronic displays to be used in stores or at trade shows.
In 2002 and 2003, Prelogar withheld payroll taxes from Winntech employees’ paychecks, but he failed to pay the taxes over to the Internal Revenue Service (IRS) and was personally assessed more than $263,000. Prelogar also filed his personal tax return for 2008 reporting more than $500,000 in gross income, and a tax due of more than $100,000, but failed to pay the taxes due. Rather than paying the taxes he owed, from 2009 through 2011, Prelogar spent more than $362,000 towards a house at the Lake of the Ozarks, a house near the Plaza in Kansas City, Missouri, a house in Leawood, Kansas, a Porsche, a Jeep, and a boat.
When the IRS tried to collect the unpaid Winntech trust fund taxes, and the taxes Prelogar owed from 2008, he obstructed the IRS’s collection efforts. In particular, from 2011 to 2016, Prelogar used corporate funds to pay his personal expenses, structured cash withdrawals from Winntech’s bank account to avoid federal bank reporting requirements, and cashed his payroll checks from his wife’s company, Bare Skull Innovation LLC, rather than placing the money into a personal bank account.
In addition to the term of imprisonment, U.S. District Judge Stephen R. Bough ordered the defendant to serve one year of supervised release, and to pay over $ 263,959.27 in restitution to the United States.
Principal Deputy Assistant Attorney General Zuckerman and U.S. Attorney Garrison thanked special agents of IRS-Criminal Investigation, who conducted the investigation, and Tax Division Trial Attorneys David Zisserson, and Assistant U.S. Attorney Paul S. Becker, who prosecuted this case.