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Press Release

Cottage Grove Man Sentenced to Federal Prison for $879,000 Tax Fraud

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

Defendant filed more than 70 false federal excise tax returns on behalf of his business, Side Pocket Food Company, and owes more than $879,000 in federal excise taxes

Eugene, Ore. - Today, Chief U.S. District Court Judge Ann Aiken sentenced William Myers, 66, of Cottage Grove, Oregon, to serve one year and one day in prison for failing to pay $879,000 in federal excise taxes and for filing more than 70 false federal excise tax returns on behalf of his company, the Side Pocket Food Company. Upon release from prison, the defendant must serve three years of supervised release, including 100 hours of community service each of the three years and pay restitution in the amount of $873,186.88. Pursuant to a plea agreement, defendant admitted that he owes more than $879,000 in federal excise taxes and filed more than 70 false excise tax returns. Additionally, defendant was operating an illegal still inside the company warehouse.

According to court records, the Side Pocket Food Company is a distilled spirits plant, primarily in the business of blending and bottling distilled spirits, in Cottage Grove, Oregon. It purchases bulk alcohol and bulk distilled spirits from manufacturers or bulk distillers, and the Alcohol and Tobacco Tax and Trade Bureau (TTB) issued the company an operating permit to operate as a rectifier (processor), warehouseman, and bottler. As a licensed distilled spirits plant, the company was required to file federal excise tax returns with the TTB and to pay federal excise taxes to the TTB.

Despite collecting federal excise taxes from the company's clients, Meyers failed to pay the federal excises taxes to the TTB. Instead, Meyers and others used this money to pay for personal expenses, including car, house, and credit card payments, and business expenses. When approached by TTB about the excise taxes, defendant engaged in a repeated pattern of evasion, intentionally avoiding TTB's efforts to audit his company and to rectify his federal excise tax situation. Defendant operated the illegal still in the middle of the company warehouse, distilling wine for local wineries. When tested, the distilled alcohol had dangerous levels of lead and copper, creating a public health risk to unknowing members of the community.

U.S. Attorney S. Amanda Marshall noted, "Defendant cheated his clients, the taxpayers, and the regulatory system, acting as if the rules did not apply to him or his business. Business owners need to understand that this type of conduct will not be tolerated. There are legitimate ways, like bankruptcy, to work through difficult financial times. Theft and tax fraud puts individuals and communities at risk, it is illegal, and will land you in jail."

Timothy Marsh, Deputy Director for Criminal Enforcement, Alcohol and Tobacco Tax and Trade Bureau, (TTB) said, "Failure to pay taxes is not a victimless crime. It robs the community of revenue and hurts law-abiding businesses. TTB is committed to ensuring a level playing field where businesses can compete on an equal and lawful basis."

This case was investigated by the Alcohol and Tobacco Tax and Trade Bureau and is being prosecuted by Assistant U.S. Attorney Scott E. Bradford.

Updated January 29, 2015