A Crystal Lake business owner has pleaded guilty to federal tax evasion for defrauding the IRS out of more than $1 million, prosecutors said.
Gary T. Petersen, 55, of Crystal Lake, pleaded guilty on Monday to federal income tax evasion in front of U.S. District Judge Iain Johnston.
Petersen was president and sole shareholder of Petersen Sealcoating and Paving, Inc. (PSPI) based in Crystal Lake.
According to the written plea agreement, Petersen in 2016 deposited checks received by PSPI as payment for its services and products into his joint bank accounts with family members and a family members’ account that he controlled, instead of PSPI’s business bank accounts.
Petersen also cashed checks PSPI received as payment and personally retained the cash with the intention of excluding the money from income reported by PSPI to the Internal Revenue Service, prosecutors said.
For the calendar year 2016, Petersen provided PSPI income information to his tax preparer but concealed checks to PSPI that he deposited into his personal accounts.
On March 23, 2017, Petersen filed a false United States Individual Income Tax Return – Form 1040 with schedules and attachments, prosecutors allege.
Petersen claimed he and a co-filer had taxable income for the 2016 calendar year of $75,028 and that the amount of tax due was $10,919.
Prosecutors said that Petersen knew he and his co-filer actually had taxable income of approximately $1,174,261 and the additional amount of income tax due to the United States was approximately $402,431 for 2016, which was substantially more than he reported.
Petersen engaged in the same acts during the years 2012, 2013, 2014, and 2015 by underreporting PSPI’s income and his personal income on tax forms.
This resulted in an additional tax due of $33,216 in 2012, $82,388 in 2013, $146,853 in 2014, and $356,230 in 2015.
Petersen faces a maximum sentence of five years in prison, a term of supervised release of up to three years following imprisonment, and a fine of up to $250,000, or twice the gross gain or gross loss resulting from the crime, whichever is greater.
A judge is set to sentence Petersen on February 17.