Tax Evasion of Nearly $400,000 by Ohio Scrap Metal Dealer

A scrap metal dealer was charged with three counts of tax evasion for the years 2007, 2008 and 2009 after he allegedly evaded nearly $400,000 in taxes by selling scrap metal for cash, sometimes traveling long distances with the metal to sell to businesses that agreed to pay in cash.

John W. Hufgard, 59, of Bath, Ohio, was the sole proprietor of Universal Service and Repair, which sold manufacturing racks to metal scrap dealers. Hufgard failed to report the proceeds on his federal income tax returns.

Hufgard concealed his scheme by selling racks for cash, by depositing business income into his personal account, diverting business income into his personal account, and falsely recording business income as short-term loans from himself, according to court records.

He also tried to conceal his scheme by moving large amounts of scrapped metal racks long distances to scrap dealers who were willing to pay cash rather than using unknown dealers who might pay by check, according to the government.

Through this scheme, Hufgard evaded approximately $397,659 in federal taxes.

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