Ohio Homebuilder Sentenced to 22 Years in Prison for Tax Fraud, Bank Fraud, Money Laundering and Obstruction of Justice Schemes
WASHINGTON - Thomas E. Parenteau of Hilliard, Ohio, was sentenced today to 22 years in prison for conspiring with his wife, his mistress and their accountant, to commit tax fraud and money laundering, the Justice Department and Internal Revenue Service (IRS) announced. Parenteau was also sentenced for conspiring to obstruct justice and tamper with witnesses.
In addition to the prison term, U.S. District Court Judge Michael H. Watson ordered that Parenteau serve five years of supervised release and pay $1,100 in special assessments. Judge Watson also ordered Parenteau to pay restitution to the IRS and to the defrauded banks and that the amount would be determined in the next 90 days. The court further ordered Parenteau to forfeit to the United States an amount of nearly $15 million, consisting of his father’s life insurance policies and two money judgments.
According to court testimony and documents presented during the eight-week trial in the Southern District of Ohio, Parenteau and his co-conspirators defrauded the IRS out of nearly $1 million and defrauded banks into lending more than $40 million to Parenteau, his nominees and others. The evidence proved that Parenteau, who operated and controlled a number of Columbus, Ohio-area businesses, and Dennis G. Sartain, Parenteau’s accountant, prepared and filed with the IRS four false income tax returns for Parenteau’s mistress, Pamela McCarty, who is the mother of his two children. The false returns generated more than $850,000 in fraudulent refunds that she ultimately gave to Parenteau.
In addition, Parenteau, his wife Marsha Parenteau, Sartain and McCarty engaged in a scheme designed to defraud banks out of millions of dollars by falsely inflating the purchase prices of the homes that Parenteau built and sold. Parenteau paid large concealed or disguised kickbacks to the buyers after their purchases. The Parenteaus, along with McCarty, also fraudulently obtained $18 million in loans against a 27,000-square-foot home, by falsely representing their income and submitting other false documents regarding the renovation to the home. Parenteau used these funds to make more than $6 million in premium payments on four life insurance policies worth $23 million on the life of Thomas Parenteau’s father, who passed away on April 4, 2009.
Finally, after learning of the IRS investigation into the tax, bank fraud and money laundering schemes, Parenteau, McCarty, Sartain and others engaged in a scheme to obstruct justice by concealing computers, creating false documents, destroying or altering evidence, tampering with a witness, lying to federal and local investigators, and otherwise obstructing justice.
“Mr. Parenteau’s sentence, and those of his co-conspirators, serve as a reminder to the public that those who illegally seek to avoid their duties and responsibilities as taxpayers will face severe consequences,” John A. DiCicco, Principal Deputy Assistant Attorney General for the Justice Department’s Tax Division said. “The Justice Department and the IRS will continue to investigate and aggressively prosecute tax cheats.”
“Schemes like this one can undermine our financial institutions, siphon taxpayer dollars and weaken our housing markets,” Acting U.S. Attorney for the Southern District of Ohio Mark T. D’Alessandro said. “The agents and prosecutors should be commended for their thorough investigation involving tens of thousands of documents and for following the paper trails that led to the unraveling of the fraud.”
“Today’s sentence marks the successful end of an investigation that uncovered a complicated fraudulent scheme that generated millions of dollars through a tangled financial web of lies,” said Tracey E. Warren, Acting Special Agent in Charge, IRS-Criminal Investigation, Cincinnati Field Office. “Investigating the financial aspects of the violations, hits criminals where it hurts the most - it deprives them of their profits and ultimately puts them out of business. Today's sentence is a direct result of the excellent partnership IRS, the Department of Justice Tax Division and the U.S. Attorney’s office has in combating violations of Federal law.”
Earlier this year, Sartain was sentenced to 131 months in prison for his conduct; Marsha Parenteau was sentenced to 33 months in prison; and McCarty was sentenced to up to 24 months in prison. The investigation led to the convictions of as many as 12 people in total.
Principal Deputy Assistant Attorney General DiCicco and Acting U.S. Attorney D’Alessandro commended the investigative efforts of the IRS agents involved in this case, as well as Tax Division Trial Attorneys Richard M. Rolwing and Sean O’Connell, who prosecuted the case. In addition, Principal Deputy Assistant Attorney General DiCicco thanked the U.S. Attorney’s Office’s Forfeiture Paralegal Michele Gwinn and the department’s Asset Forfeiture and Money Laundering Section Legal Advisor Steve Schlesinger and Senior Trial Attorney Jean Weld for providing assistance on the forfeiture claims.
More information about the Tax Division and its enforcement efforts can be found at www.justice.gov/tax .