A Dickinson construction materials company ignored years of Internal Revenue Service warnings before the corporation and its executives were indicted for tax fraud, a federal judge said Tuesday.
U.S. District Judge Daniel Hovland said IRS audits of Fisher Sand & Gravel Co. Inc., dating back to the 1970s, raised red flags over the way the corporation handled the payment of personal expenses for family members.
"The warnings from the IRS repeatedly fell on the deaf ears of Fisher family members," Hovland wrote in Tuesday's sentencing memorandum for Micheal Fisher.
Fisher, the former vice president and company director, has pleaded guilty to nine felony counts. Two other company executives, Amiel Schaff and Clyde Frank, pleaded guilty to conspiracy to commit tax fraud. They were sentenced to 12 months probation, including home confinement.
Fisher's attorney, Jon Jensen of Grand Forks, was out of town Tuesday and unavailable for comment, a spokeswoman said.
Hovland said brothers Micheal and Tom Fisher, who essentially owned and operated the company after 1998, were told by their sister, Suzanne Medley, that the handling of personal expenses was a major problem for the corporation.
"Surprisingly, both Micheal Fisher and Tom Fisher chose to also ignore their sister's concerns and thumbed their noses at the federal government, a tactic no reasonable person would ever understand in light of the annual net earnings of the corporation," Hovland wrote.
"Simply stated, there was far more than enough money to go around to take care of the family's personal expenses in a lawful manner than cheat the federal government who was loudly barking at their door," the judge said.
Hovland said federal guidelines call for a total sentence of between 37 months and 46 months for Micheal Fisher. The judge's memorandum came after he heard testimony on the extent of Fisher's role as a supervisor, the amount of money involved and the duration of the crime.
Authorities said Fisher used corporate funds to pay for a family cruise, build a home, remodel a gas station, prepare a prenuptial agreement and rent an Arizona condominium. Prosecutors said the case involves about $630,000 in unpaid taxes.
A sentencing date for Fisher has not been set.