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North Dakotan sentenced to Duluth

December 17, 2009

A North Dakota businessman who pleaded guilty to using company funds for personal expenses got a 37-month sentence this week:

"I am very sorry for the whole thing," Micheal Fisher told U.S. District Judge Daniel Hovland during his sentencing hearing.

I'm sure he is sorry. Especially that he got caught.

Hovland sentenced Fisher to 37 months in prison, fined him $90,000 and ordered him to pay $308,069 to make up for taxes he avoided by having his family’s company, Fisher Sand & Gravel Inc., pay almost $1.2 million of his personal expenses from 2001 through 2004.
Fisher used company funds to build a home, renovate a Dickinson truck stop he owned, pay bills for himself and family members and take an African vacation.

Running personal expenses through the business is a universal temptation for business owners. The IRS knows that, and IRS audit programs routinely look for these things. While such cases don't always turn into criminal investigations, there's no telling when the IRS will choose to make an example of someone, to, er, encourage others to not cheat.

It's not just company owners that can get in trouble in these cases:

The investigation also resulted in charges against Amiel Schaff, Fisher Sand & Gravel’s former chief financial officer; Clyde Frank, the company’s former comptroller; and Fisher Sand & Gravel itself.
Schaff and Frank were sentenced earlier this year to probation after pleading guilty to one felony conspiracy charge as part of an agreement with prosecutors. Fisher Sand & Gravel agreed to pay $1.16 million in back taxes, fines and penalties and cooperate with IRS tax audits.

If you are a finance officer at a company and the boss is using you to help cheat, you may want to look elsewhere, quick.

At least Mr. Fisher may get to spend his sentence in a familiar climate:

Hovland said he would recommend Fisher serve his sentence at a minimum-security federal prison camp at Duluth, Minn., and agreed to give Fisher more than a month to report there. He must begin his sentence by 1 p.m. Feb. 26.

The Moral? Don't use company funds for personal stuff. If the boss wants you to help him do so, ask him if he how he feels about winters in Duluth, without the snow sports.

Tags: tax crime.