A Letcher County business owner who admitted understating his income by nearly $6 million to avoid paying taxes has been sentenced to two years and six months in prison.
U.S. District Judge Amul R. Thapar also sentenced Jarrod C. Breeding, 38, to pay restitution of $258,210 to the Internal Revenue Service, representing the amount of taxes he avoided in 2011, 2012 and 2013.
Breeding’s attorneys said in a court motion that he had sold equipment, signed for a loan and taken other measures to raise the money needed to make restitution by the time he was sentenced.
Breeding, of Isom, ran several businesses, including a scrap recycling business called Southern Steel, Iron and Metal, and a car-racing track called 201 Speedway Racing.
Prosecutors said in one motion that Breeding grossed $8.3 million in three years, but reported only $2.3 million for tax purposes.
Prosecutors said Breeding often cashed checks worth more than $10,000, but took between $9,000 and $9,999 in cash and put a small amount in his account.
That was to avoid a rule requiring banks to report any cash transaction over $10,000. That meant a lot of money never showed up on Breeding’s bank statements, which he used in filing returns, according to a news release from Carlton S. Shier IV, acting U.S. Attorney for the Eastern District of Kentucky.
Breeding’s attorneys sought a sentence of probation for him, saying he started his scrap business digging junk appliances out of creek banks and worked 16-hour days to build it into a successful enterprise.
Breeding had helped the community, sponsoring youth sports teams, helping charities and letting poor people take car parts off junk vehicles for free, his attorneys said.
Prosecutors, however, argued Breeding took part in a methodical scheme to avoid taxes and deserved at least 30 months in prison.
Thapar sentenced Breeding Tuesday. He is to report to prison on May 18.