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Justice News

Department of Justice
U.S. Attorney’s Office
Eastern District of Tennessee

FOR IMMEDIATE RELEASE
Monday, May 2, 2016

Former Vice President Of Woods Paint Company Receives 18-Month Sentence For Evading Payment Of Federal Taxes

GREENEVILLE, Tenn. – On May 2, 2016, Charles J. Rutherford, 44, of Johnson City, Tenn., was sentenced by the Honorable J. Ronnie Greer, U.S. District Court Judge, to serve 18 months in federal prison for his January 2016 conviction for filing false and fraudulent federal tax returns in an attempt to evade and defeat paying income tax.  

From 2006 through 2014, while serving as vice president of Woods Paint Company (“WPC”) in Bristol, Tenn., Rutherford embezzled approximately $1 million by paying his own personal expenses out of company accounts.   Although the funds were stolen, he was obligated to report the embezzled money as income on his federal individual income tax returns, which he failed to do for tax years 2008 through 2013.   By filing false and fraudulent returns, he evaded paying well over $200,000 in federal taxes.  In addition to his prison sentence, he was also ordered to pay over $1.2 million in restitution, to both WPC and the Internal Revenue Service (IRS).   Rutherford will also be prosecuted in state court for theft. 

This investigation was conducted jointly by the Sullivan County Office of the District Attorney General, City of Bristol Tennessee Police Department, and IRS-Criminal Investigation Division.  Assistant U.S. Attorney David Gunn represented the United States.

"The IRS enforces the nation’s tax laws, but also takes particular interest in cases where someone, for their own personal benefit, has taken what belonged to others,” stated Tracey D. Montaño, Special Agent in Charge of the IRS-Criminal Investigation Nashville Field Office.  “No matter what the source of income, all income is taxable.  The prosecution of individuals who intentionally conceal income and evade taxes is a vital element of the IRS’ enforcement strategy.  We are pleased with the successful resolution of this investigation."

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Topic(s): 
Tax
Updated May 2, 2016