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12 MONTH SENTENCE GROWS FROM FERTILE FELONY

September 09, 2008

The co-owner of a Fertile, Iowa injection molder received a prison sentence of 12 months and 1 day yesterday in connection with failing to pay taxes on funds he took from the business. U.S. District Judge Bennett departed from federal sentencing guidelines in sentencing Thomas Ray Dillavou of Lake Mills; the guidelines indicated an 18-24 month sentence.

Mr. Dillavou pleaded guilty in January to two counts of a five-count indictment, admitting that he diverted $598,172 over five years. Some of the money went to an investment scheme involving Nigerians; the diverted cash also paid for personal expenses, including remodeling and vacations.

Mr. Dillavou will also serve 24 months of supervised release, and he will have to file correct tax returns for the years involved. It's likely that Iowa authorities will also want to get involved.

The moral? Getting involved with Nigerian investment scams is foolish; embezzling funds and not paying taxes is criminal. Combining them is criminally foolish.

Links:

Sentencing document
Government Sentencing Memorandum
Defendant's memo arguing for downward departure from sentencing guidelines

Prior Tax Update Coverage

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