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Press Release

Springfield Man to Serve 18 Months in Prison for Failure to Report $1.15 Million in Earnings on Tax Returns

For Immediate Release
U.S. Attorney's Office, Central District of Illinois

SPRINGFIELD, Ill. – A Springfield, Ill., man, Gregg Harwood, has been sentenced to 18 months in prison for failing to report more than $1.15 million in earnings on tax returns filed for tax years 2008, 2009, and 2010. Harwood, 60, of the 700 block of Clipper Rd., formerly owned Thermionics, a corporation that manufactured hot / cold pain therapy products that were sold at major retailers and pharmacies across the U.S.

In addition to the prison sentence, U.S. District Judge Sue E. Myerscough ordered that Harwood pay a fine of $50,000, and serve one year of supervised release following the prison term, with the first six months of supervised release as home confinement. Harwood was also ordered to work 20 hours of community service per week while on supervised release.

On Feb. 6, 2018, Harwood waived indictment and pleaded guilty to an information that charged him with filing false income tax returns that failed to report income of more than $1.15 million for tax years 2008, 2009, and 2010. Beginning in November 2007, Harwood  created various multi-level entities with no legitimate business purposes, which he used to divert and disguise income he received from Thermionics. Harwood used the resulting tax free income to support his personal lifestyle.

As provided in the plea agreement, today Harwood paid the amount due to the IRS, $447,528, and $250,000 to participants in Thermionics’ employee stock ownership plan.

Harwood remains on bond pending direction from the federal Bureau of Prisons as to the date and location to report to begin serving his prison sentence. 

Assistant U.S. Attorney Timothy A. Bass prosecuted the case. The Internal Revenue Service, Criminal Investigation Division, and the U.S. Department of Labor, Criminal Division, investigated the charges.

Updated July 23, 2018

Financial Fraud