Former Washington State Bank CEO Pleads Guilty to Multi-Year Tax Fraud of More than $865,000
Defendant took $2.3 million in Fees and Failed to Report the Income on His Taxes
The former Chief Executive Officer of a Pacific Northwest community bank pleaded guilty today in U.S. District Court in Wisconsin to filing a false tax return, announced U.S. Attorney Brian T. Moran. VICTOR KARPIAK, 64, now of La Crosse, Wisconsin, admits that between 2010 and 2016 he failed to report more than $2.3 million in income on his taxes. KARPIAK previously served as President and CEO of First Savings Bank Northwest based in Renton, Washington. He retired in 2013 and moved from the Seattle area. KARPIAK was charged in the Western District Washington, but chose to have the case resolved near his new home in Wisconsin. Sentencing by U.S. District Judge William M. Conley is scheduled for May 17, 2019.
According to the facts admitted as part of his plea, between 2010 and 2016, KARPIAK served as a trustee and consultant for a woman who was the beneficiary of a family and a marital trust. Over those years KARPIAK paid himself fees of $3,265,072 but on his taxes KARPIAK reported less than a third of that income ($943,322). The tax loss on more than $2,321,750 in income is $867,540. In the plea agreement KARPIAK agreed to pay $867,540 to the IRS as well as any interest or civil penalties the IRS imposes in the case. The interest alone in this case could total more than $143,647.
Filing a false tax return is punishable by up to three years in prison and a $250,000 fine or twice the gross tax gain or loss. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes. The sentencing of the defendant will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors.
The case was investigated by the Internal Revenue Service Criminal Investigation (IRS-CI) and is being prosecuted by Assistant United States Attorneys Steven Masada of the Western District of Washington and Elizabeth Altman of the Western District of Wisconsin.