Gerald Adelore Paquin Sentenced In U.S. District Court
The United States Attorney's Office announced that during a federal court session in Billings, on May 29, 2013, before U.S. District Judge Sam E. Haddon, GERALD ADELORE PAQUIN, a 55-year-old resident of Billings, was sentenced to a term of:
Prison: 12 months
Special Assessment: $100
Supervised Release: 3 years
PAQUIN was sentenced in connection with his guilty plea to tax fraud and making false statements.
In an Offer of Proof filed by Assistant U.S. Attorney Jessica T. Fehr, the government stated it would have proved at trial the following:
PAQUIN was a feed salesman operating in the Billings area. From 2005 to 2007, PAQUIN was employed as a salesman for Cenex Harvest States (CHS). As a salesman for CHS, PAQUIN sold feed and supplements to local ranchers and distributors. Farmers Union Association of Hardin (FUA) had an agreement with CHS where in PAQUIN was "leased" to FUA by CHS as a salesman for one day a week. During the one day a week PAQUIN would sell product to local ranchers on behalf of FUA. In exchange for PAQUIN's time, FUA paid a fee directly to CHS.
One of the products PAQUIN sold for CHS was wheat midds, a base component of feed to which supplements are added. Eventually, CHS stopped selling wheat midds because of the volatility of the market. PAQUIN found another midd supplier, Laughlin Cartrell (LC). PAQUIN began selling the wheat midds he obtained from LC to FUA customers during his one day a week of sales. The change in the supplier of the wheat midds gave PAQUIN the opportunity he needed to essentially begin to operate a personal business selling wheat midds to FUA customers, using FUA's credit to obtain the wheat midds, keeping the money he made from the sales and not paying down FUA's credit line which he used to buy the wheat midds from LC.
During sales calls PAQUIN would sell the LC wheat midds to his customers and instruct the customers to pay him directly rather than make their payments to FUA. PAQUIN's sales of wheat midds to customers were recorded on the FUA books which were maintained by a manager of FUA. Following each sale the manager would credit a receivable account in PAQUIN's name instead of the account of the rancher actually making the purchase. PAQUIN usually did not use the customer's funds, which were paid to him, to pay the liability he incurred on behalf of FUA from LC. Many of the checks from customers were deposited into PAQUIN's personal bank account. PAQUIN continued to let his FUA balance increase until the outstanding balance was so high the Board of Directors of FUA began to ask questions. The Board of Director's questions led to a meeting with PAQUIN. During the meeting PAQUIN is reported as saying, "I could pay you back, go to jail, or kill myself." When questions began to arise about PAQUIN's dealings he paid back some of the stolen money to FUA.
PAQUIN did not report any of the income earned through his sales scheme on his taxes for 2005, 2006, and 2007. PAQUIN's tax returns for 2005, 2006, and 2007 were prepared by an accountant. The accountant confirmed that he relied upon the income information supplied by PAQUIN when completing his tax returns. In 2005 and 2006 PAQUIN claimed he had no other sources of income. In 2007, PAQUIN only claimed the amount noted paid by LC, not the ill gotten funds.
PAQUIN owes the Internal Revenue Service $66,304.00 in restitution plus accrued interest and penalties.
Because there is no parole in the federal system, the "truth in sentencing" guidelines mandate that PAQUIN will likely serve all of the time imposed by the court. In the federal system, PAQUIN does have the opportunity to earn a sentence reduction for "good behavior." However, this reduction will not exceed 15% of the overall sentence.
The investigation was conducted by the Criminal Investigation Division of the Internal Revenue Service.