Crime

Nearly 6 years in prison, a $19.2 million tax bill. Fraud ends badly for Kentucky businessman.

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Tom Bartholomy, president of the Better Business Bureau of Southern Piedmont, talks about scammers playing on millennials' fears over trying to find internships and jobs to target them with fraudulent offers that dupe them out of money.

A Garrard County business owner has been sentenced to five years and 11 months in prison for his role in a massive tax-fraud conspiracy.

Clarence Michel Jr., 48, of Lancaster, also is responsible for $19,227,376 in restitution to the Internal Revenue Service, according to a release from U.S. Attorney Robert M. Duncan Jr.

Michel pleaded guilty to conspiring to defraud the government and to helping prepare false tax returns. He operated several businesses in Garrard and Boyle counties that provided industrial staffing, according to the indictment.

The companies withheld income taxes from employees’ paychecks but didn’t pay the money to the IRS, according to the indictment.

Michel and a man indicted with him, Warren Griffin II, allegedly changed the names of companies repeatedly to make it harder for the IRS to track the cheating, and also paid other people to act as owners of companies.

Meanwhile, the money owed the IRS went to both men via checks from the companies’ accounts that the pair instructed an employee to write to them, according to the indictment. In addition, accounts at the companies paid expenses for the two men.

In total, the companies failed to pay $16.8 million in taxes, and Michel didn’t pay $2.4 million in personal income taxes, according to his plea agreement.

Michel’s attorney argued he deserved a lesser sentence, citing among other things his donations to his church, a youth football program and other charities.

However, Assistant U.S. Attorney Dmitriy Slaven argued against a lower sentence, pointing to lavish spending by Michel at the same time he wasn’t paying his taxes.

Among other things, Michel bought two Bentley cars at a cost of more then $200,000 each, according to a court document.

“This was a brazen hoarding of money without any justification,” Slaven wrote.

Slaven also pointed to two prior federal bank-fraud convictions against Michel.

The 71-month sentence U.S. District Judge Karen K. Caldwell handed down was the maximum under advisory federal sentencing guidelines.

Caldwell sentenced Michel Thursday.

The charges against Griffin are pending.

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