United States Attorney for the Eastern District of Pennsylvania Announces Participation in National Money Mule Initiative; Obtains Three Civil Injunctions Against Alleged Money Mules Involved in Lottery Scams
PHILADELPHIA – First Assistant United States Attorney Jennifer Arbittier Williams announced that Donald Dougherty, 54, of Philadelphia, PA, entered a plea of guilty today before United States District Court Judge Michael M. Baylson. Dougherty, the owner of Dougherty Electric, Inc., (“DEI”), a well-established Philadelphia-based electrical contractor, pleaded guilty to one count of filing a false federal income tax return and one count of theft of employee benefit funds.
On November 25, 2020, Dougherty was charged by Indictment with multiple charges of bank fraud, tax fraud and theft from employee benefit plans. Also charged with tax fraud was Michael McKale, an accountant who worked for Dougherty. Under the plea agreement between Dougherty and the government announced today, in addition to pleading guilty to tax fraud and theft of union benefit funds, the defendant has agreed to pay $92,913 in taxes due to the Internal Revenue Service, arising from false business deductions for what were actually expenditures for Dougherty’s personal benefit. The defendant also agreed to pay $266,000 in restitution to the International Brotherhood of Electrical Workers (“IBEW”) Local Union 5 in Pittsburgh, arising from his failure to make $266,000 in contributions to Local 5’s employee benefit funds in violation of the collective bargaining agreement between DEI and Local 5 in Pittsburgh.
In 2007, Dougherty was charged, pleaded guilty, and imprisoned for filing false income tax returns, tax evasion, making an unlawful payment to a union official, theft of employee benefit funds, and related offenses. During today’s plea hearing, Dougherty agreed to pay all restitution still owed in this previous case.
“Donald Dougherty has a track record of trying to skirt the law and defraud hard-working individuals,” said First Assistant U.S. Attorney Williams. “But the government also has a track record of convicting Dougherty for his crimes. And we will continue to do just that with every criminal who attempts this kind of scheme.”
“Engaging in an elaborate scheme to willfully underreport taxable income is a felony,” said IRS Criminal Investigation Special Agent in Charge Thomas Fattorusso. “Today, Donald Dougherty admitted he broke the law by cheating on his taxes. As we approach tax filing season, those who might consider filing false tax returns should be aware of the negative consequences; which could include being branded a felon for life and a lengthy prison sentence.”
The case was investigated by the Internal Revenue Service Criminal Investigation Division, the Federal Bureau of Investigation, and the Employee Benefits Security Administration branch of the Department of Labor, and is being prosecuted by Assistant U.S. Attorneys Paul L. Gray and Frank R. Costello, Jr.
UNITED STATES ATTORNEY’S OFFICE
EASTERN DISTRICT OF PENNSYLVANIA
615 Chestnut Street, Suite 1250
Philadelphia, PA 19106
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