A Texas man was sentenced today to 37 months in prison, three years of supervised release, and ordered to pay $529,551 in restitution to the United States for evading taxes on income he earned from his business.
According to court documents, John L. Petrone owned and operated a business that sold an herbal extract known as “kratom,” along with other related products. Despite earning hundreds of thousands of dollars from his business, Petrone did not file individual income tax returns for 2014 through 2019, nor did he pay income taxes for those years. To evade his income taxes, Petrone employed several methods, including not withholding federal taxes from his paychecks, operating the business under different names, dealing in cash, using business bank accounts to pay for personal expenses, and lying to the IRS during an audit. Additionally, Petrone did not pay his business’s employment taxes.
Through his actions, Petrone caused a tax loss to the IRS of over $529,000.
Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division made the announcement.
IRS Criminal Investigation (IRS-CI) investigated the case, uncovering Petrone’s elaborate scheme to hide his income and avoid tax liabilities. The case highlights the importance of compliance with tax laws and the consequences of willful evasion. Individuals and business owners must understand that deliberate actions to defraud the tax system will be met with rigorous investigation and prosecution.
Assistant Chief David Zisserson and Trial Attorney Andres Chinchilla of the Tax Division prosecuted the case, with assistance and support from the U.S. Attorney’s Office for the Western District of Texas. The collaborative effort between the IRS and the Department of Justice Tax Division was instrumental in bringing this case to a successful resolution. This case serves as a reminder of the severe penalties for tax evasion and the ongoing efforts of federal agencies to enforce tax compliance.
In addition to the prison sentence and restitution, Petrone’s three years of supervised release will include strict compliance with tax laws and regular reporting to a probation officer. This case serves as a reminder of the severe penalties for tax evasion and the ongoing efforts of federal agencies to enforce tax compliance.
Image: Depositphotos
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