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Paul Patrick Piper, the Carferry’s former Financial Controller, stole in excess of $1.7 million over 11 years and failed to pay federal income taxes of $363,000
GRAND RAPIDS, MICHIGAN — Paul Patrick Piper, 58, of Ludington, Michigan, was sentenced to 63 months’ imprisonment today on charges of bank fraud and filing a false federal income tax return. The sentencing hearing took place in the United States District Court in Grand Rapids, Michigan, before Chief U.S. District Judge Robert J. Jonker. In imposing sentence, Judge Jonker commented that the amount Piper embezzled over many years was "a frightening number that caused substantial financial hardship" to the Lake Michigan Carferry and resulted from a "pattern of conduct that needs deterrence."
"Mr. Piper earned his sentence," said U.S. Attorney Andrew Birge. "His greed caused significant financial damage to one of the largest employers in the Ludington, Michigan area. Vigorous prosecution of white collar crime and enforcement of our country’s tax laws remains an important priority in my office."
Piper served for many years as the financial controller for Lake Michigan Carferry, the company operating the SS Badger ferry between Ludington, Michigan, and Manitowoc, Wisconsin. Piper embezzled in excess of $1,700,000.00, between 2007 and May 2018, by overriding normal company accounting systems and writing checks directly to himself and to two of his affiliated businesses, Piper Tax & Accounting and Piper Group. Piper either forged the signatures of company owners on these checks or used a signature stamp without the authorization of the owners. Piper hid these transactions in the accounting system by booking these checks to an insurance expense code and by otherwise making false entries to balance company accounts. Additionally, Piper filed false personal income tax returns with the Internal Revenue Service because he knowingly failed to include the income he stole from the Carferry, and other income earned from his tax business, on his federal income tax returns.
"Piper violated the trust of the company that hired him and endangered the financial well-being of one of Ludington’s largest employers," said Special Agent in Charge of the FBI in Michigan, Steven M. D’Antuono. "Financial crime is not a victimless crime. The FBI and our law enforcement partners will continue to pursue anyone who uses their position of trust for personal gain."
"For over a decade Mr. Piper repeatedly took advantage of his position as controller and committed criminal financial crimes that resulted in a large tax due and owing," said IRS-CI Special Agent in Charge Sarah Kull. "Of course activity like this hurts the ‘Carferry,’ but it also hurts every U.S. taxpayer. IRS-CI will continue to work with our law enforcement partners to investigate tax fraud committed by trusted professionals."
As part of his sentence, the court imposed a forfeiture money judgment in the amount of $1,740,037.91. Pursuant to prior forfeiture efforts, Piper forfeited a 2018 Ram Truck, a 2008 Glacier Bay 5th Wheel Recreational Vehicle, and cash in lieu of forfeiture of other assets. The court will impose mandatory restitution for the victim in an amount of at least $1,740,037.91 after receiving information and arguments from the parties about possible additional losses within the next 30 days.
Assistant United States Attorney, Ronald M. Stella, conducted the prosecution of the case. The Internal Revenue Service’s Criminal Investigation Division and the Federal Bureau of Investigation, with significant assistance from the Mason County Sheriff’s Office, handled the investigation of the case.