Michigan Insurance Salesman Indicted for Tax and Bankruptcy Fraud

A federal grand jury in Detroit, Michigan, returned an indictment charging a Michigan man with filing false tax returns, making false statements to a bankruptcy court, and making a false statement to the Department of Justice.

According to the indictment, Donald Stanley LaVigne of Lake Orion failed to report insurance commissions and other income on tax returns he filed with the IRS for the years 2013 through 2018. In addition to filing false tax returns, it is alleged that LaVigne falsely claimed in letters he sent to the IRS that these commissions were not income to him.

The indictment also alleges that when LaVigne filed for bankruptcy in 2018, he did not list the IRS as a creditor on the schedules attached to his bankruptcy petition even though he owed taxes to the IRS for the years 2008, 2009, and 2013 through 2015. On one document he filed in the bankruptcy case, LaVigne also allegedly understated his income for the years 2016 and 2017.

Finally, LaVigne is charged with making a false statement to the Department of Justice, Tax Division. After LaVigne was notified that he was the target of a federal grand jury investigation, LaVigne allegedly sent a letter to the Tax Division in which he falsely claimed that his bankruptcy attorney had reviewed his 2017 income tax return and advised him that it was “correct and complete.” In fact, the indictment alleges that his bankruptcy attorney neither reviewed LaVigne’s 2017 income tax return nor advised him that it was correct and complete. 

If convicted, LaVigne faces a maximum penalty of three years in prison on each of the false tax return charges, five years in prison on each of the bankruptcy fraud charges, and five years in prison on the false statement charge. He also faces a period of supervised release, restitution and monetary penalties. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division made the announcement.

IRS-Criminal Investigation is investigating the case.

Trial Attorneys Melissa S. Siskind and Abigail Burger Chingos of the Justice Department’s Tax Division are prosecuting the case.

An indictment is merely an allegation and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.