BREAKING NEWS: Steven Ingersoll, convicted on March 10, 2015 of three counts of tax evasion and conspiracy, was sentenced today by United States District Judge Thomas L. Ludington to 41 months in federal prison. (Ingersoll faced a maximum of 60 months in prison.)
Ingersoll will be required to report within the next 30 days.
In its December 15, 2016 sentencing memorandum, the government stated:
In general, the four purposes of sentencing are retribution, deterrence, incapacitation, and rehabilitation. In a tax case such as this, the sentencing purposes of retribution and deterrence are especially important. A sentence within the guideline range of 41 to 51 months is necessary to accomplish those purposes.
“When looking first at the need for retribution, Ingersoll has committed a serious offense, and his sentence should reflect it. His offense was not a one-time lapse in judgement, or a record-keeping mistake with purely civil tax consequences. His criminal tax-loss amount exceeds a million dollars. And he was convicted of tax evasion and fraud with respect to three years of false income tax returns.
Ingersoll has done nothing to repay the money that he owes. To the contrary, he has continued to violate the tax laws to this day by failing to file any personal income tax return since 2012.
The profit and loss statement that Ingersoll previously filed with the court shows that from 2012 to 2015, he earned over two million dollars in gross income. The only income tax payment he has made for those tax periods, however, was a $10,000 payment submitted when he applied for an extension to file his 2012 return.
Defendant’s repeated and significant criminal conduct warrants a lengthy sentence.”
“Ingersoll has been indicted and convicted of federal tax charges. He noted that his professional life has been ruined (though he still has income related to his intellectual property) and his name has been “dragged through the mud.” Yet, none of that has deterred him from continuing to violate the tax laws. A substantial sentence within the guidelines is necessary to deter Ingersoll from continued criminal conduct.”
Continuing, the government's sentencing memorandum states:
“Because of its limited resources, the IRS cannot investigate many of the schemes involving false returns, and many tax-related crimes go unprosecuted. The government seeks a guideline sentence in order to deter other potential tax-cheats, including those like the defendant who believe that tax laws have purely civil—as opposed to criminal—sanctions. A sentence of probation or a custodial sentence below his guidelines (as requested by Ingersoll) would send the wrong message to the public.”
Request for a variance:
Ingersoll made several non-health related arguments related to his request for a sentencing variance. The government argued that none of his arguments support a variance. (Ingersoll filed health-related arguments under seal.)
“Ingersoll argues that he merely failed to document shareholder loans, and that the evidence in this case is consistent with the proposition that defendant believed that his intercompany transfers were shareholder loans.
This argument is inconsistent with the jury’s verdict finding that the defendant acted willfully.
If defendant truly believed that the transfers were shareholder loans, he would not have repeatedly argued to this Court that he was a mere conduit for his businesses and that the transfers to him should have no taxable effect.
Defendant also claims that his unreported income would have been lower—to the tune of $840,000—if his historical tax credits had been approved and if the federal government had not blocked them.
It appears that Ingersoll is trying to blame the federal government’s denial of historical tax credits for his own income tax violations.
The Department of Interior denied Ingersoll’s request for historical tax credits after it determined that the Bay City Academy renovations did not comply with Department of Interior requirements.
Even if the credits had been approved, a significant portion of them would be paid to Tim Hunnicutt, the project manager for the renovations at Bay City Academy. Nobody knows what Ingersoll would have done with the remaining credits.”
Ingersoll also argued that the grand jury would not have indicted this case, had it not been for the allegations of bank fraud and the allegations that he took money from the Grand Traverse Academy.
“Again, Ingersoll appears to be trying to shift the blame for his situation to the government, but with baseless speculation. A grand jury’s job is to determine whether there is probable cause for a criminal charge. In this case, the petit jury convicted Ingersoll of tax violations even after the Court dismissed Count 1, and despite the Court’s evidentiary rulings regarding GTA. It seems highly unlikely that the grand jury would not have indicted when the standard of proof is so much lower for an indictment than what is required for a conviction.”
Finally, Ingersoll presented the court with numerous sentencing tables to argue that probation or a below-guideline custodial sentence would “avoid unwarranted sentencing disparities.”
According to the government, the sentencing tables provided very limited information.
“They do not reflect offense-specific characteristics, such as acceptance of responsibility, role in the offense, or substantial assistance to the government. The best way to avoid unwarranted sentencing disparities in this case is to impose a sentence within the guidelines.”
The government recommended that Judge Ludington sentence Ingersoll within the guideline range of 41 to 51 months:
“Defendant does not qualify for a downward departure or variance. His criminal tax-loss amount is substantial—in the range of $550,000 to $1,500,000. Ingersoll played a leadership role in the conspiracy to defraud the government, and he continues to violate the tax laws by not filing income tax returns.”