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Press Release

Manitowoc Man Sentenced to Prison for Wire Fraud and Tax Evasion

For Immediate Release
U.S. Attorney's Office, Eastern District of Wisconsin

United States Attorney James L. Santelle announced that on July 18, 2014, Paul LaChappelle (age: 41), of Manitowoc, was sentenced in federal court to two years in prison and ordered to make restitution to his former employer, Nemschoff Chairs, Inc., in the amount of $520,000.  In April 2014, LaChappelle pleaded guilty to wire fraud and tax evasion.
LaChappelle was previously employed as a maintenance technician at Nemschoff’s Sheboygan manufacturing facility.  Using this position, LaChappelle entered into an arrangement with a Florida business under which LaChappelle would cause Nemschoff to order replacement parts for machinery LaChappelle serviced from the Florida business.  The Florida business would obtain the parts from LaChappelle, who simply stole the parts from Nemschoff’s inventory. LaChappelle was paid one-half of the price Nemschoff paid the Florida business for the parts.   During the period from April 2009 through December 2011, Nemschoff paid the Florida business more than $500,000 for these replacement parts and LaChappelle received more than $268,000 for the parts he supplied.

The tax evasion charge was based on LaChappelle’s failure to report the income he received as part of his scheme, as well as the fact that he claimed fictitious business expenses on the tax returns he filed for the years 2008 through 2011.  As a result, LaChappelle fraudulently paid no federal income taxes for these years.

This case was investigated by the Internal Revenue Service Criminal Investigation in conjunction with the Sheboygan Police Department. The case was prosecuted by Assistant United States Attorney Matthew L. Jacobs.

Updated January 29, 2015