Making Ends Meet

44969068 - office work and filling in tax returns close up

Sometimes, it’s hard to make ends meet when more money is flowing out than in. With some careful planning though, most people can manage to pay the bills and save a little on the side by simply adhering to a budget or getting a second job. Today’s fraudster is the former Chief Executive Officer of a Pacific Northwest community bank who didn’t have any trouble making ends meet. He actually had a problem with adhering to a reasonable budget and used his second job to carry out a $2.3 million tax fraud scheme that enabled him to live quite the comfortable life.

The banker from Renton, Washington was evidently a trusted and revered individual who was chosen as a trustee for a former customer’s estate. When the customer passed away, the CEO assisted the surviving wife with her inherited estate. The bank executive paid himself more than $3.2 million in fees for the services he provided; however, he only reported $943,322 of the extra income he earned while also earning a really good salary at the Seattle-area bank. (By neglecting to report more than $2,321,750 in income, the Internal Revenue Service (IRS) incurred a loss of $867,540 in unpaid taxes.)

The tax fraud scheme went on for seven years, continuing three more years after the former bank executive retired and moved to LaCrosse, Wisconsin. During those years, he enjoyed four homes in two states, multiple luxury vehicles and a nice $150,000 annual pension. (It is quite evident that the fraudster did not need to cheat on his taxes to make ends meet.)

The 64-year-old former banker pleaded guilty to tax fraud for failing to report $2.3 million in income. He was sentenced to one year and a day in prison, will need to serve one year of supervised release, and pay a $150,000 fine for filing a false tax return. It also looks like the fraudster will pay more than $867,000 to the IRS plus the interest he owes, which is around $143,000. (I guess you could say that while trying to meet ends, this fraudster’s tax fraud scheme has officially met its end.)

Today’s “Fraud of the Day” is based on an article, Former bank CEO sentenced to prison time for tax fraud,” posted on on May 17, 2019.  

SEATTLE – A former CEO of a community bank branch in Washington was sentenced in U.S. District Court in Wisconsin on Friday. 

Victor Karpiak, 64, was sentenced to one year and one day in prison and one year of supervised release and was issued a $150,000 fine for filing a false tax return, U.S. Attorney Brian T. Moran announced. 

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Larry Benson, Senior Director of Strategic Alliances, LexisNexis Risk Solutions - Government

Larry Benson is responsible for developing strategic partnerships and solutions for the government vertical. His expertise focuses on how government programs are defrauded by criminal groups, and the approaches necessary to prevent them from succeeding.

Mr. Benson has 30 years of experience in sales and business development. Before joining LexisNexis® Risk Solutions, he spent 12 years founding and managing two software technology startups. During the 1990s he spent 10 years as a Regional Director helping to grow a New England-based technology company from 300 employees to 7,000. He started his career with Martin Marietta Aerospace working on laser guided weapons and day/night vision systems.

A sought-after speaker and accomplished writer, Mr. Benson is the principal author of “Fraud of the Day,” a website dedicated to educating government officials about how criminals are defrauding government programs. He has co-authored WTF? Where’s the Fraud? How to Unmask and Stop Identity Fraud’s Drain on Our Government, and Data Personified, How Fraud is Changing the Meaning of Identity.

Benson holds a Bachelor of Science in Physics from Albright College, and earned two graduate degrees – a Master of Business Administration from Florida Institute of Technology, and a Master of Science in Engineering from Lehigh University.