U.S. Department of Justice
United States Attorney
Eastern District of Michigan
Eastern District of Michigan
For Immediate Release
May 9, 2012
Barbara L. McQuade, United States Attorney
Michigan Man Sentenced to Eight Years in Prison for Tax Fraud Scheme and Gun Crime
WASHINGTON – Karl Herrington, of Parma, Mich., was sentenced today to 97 months in prison, following convictions at trial for corruptly endeavoring to obstruct the administration of the Internal Revenue laws, filing false tax forms with the Internal Revenue Service (IRS) and being a felon in possession of firearms, the Justice Department, the Treasury Inspector General for Tax Administration (TIGTA), the IRS and the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) announced today. U.S. District Judge Stephen J. Murphy III of the Eastern District of Michigan, presided over the trials and imposed the sentence.
Separate Detroit juries returned guilty verdicts on the tax charges on Aug. 24, 2011, and on the firearms charge on Aug. 25, 2011. Herrington was convicted of two counts of corruptly endeavoring to obstruct the administration of the Internal Revenue laws, four counts of filing false tax forms with the IRS, and one count of being a felon in possession of six different firearms.
According to the evidence at trial, Herrington submitted false forms to the IRS to intimidate and harass state and local government officials and employees. These included IRS Forms 1099-OID falsely reporting that Herrington paid original issue discount, which is taxable as interest, to law enforcement personnel and judges involved in a criminal case against him in Jackson County, Mich. In that case, Herrington was charged with being an accessory after the fact for harboring his wife, who was wanted for outstanding arrest warrants.
Further, the evidence established that Herrington sent false IRS Forms 1099-OID to federal attorneys prosecuting a criminal tax case against his wife in the Northern District of Ohio in order to interfere with that case. The tax forms included an individual income tax return for himself falsely reporting federal tax withholdings of more than $8 million.
Herrington was also convicted of possessing firearms on May 25, 2011, the day of his arrest on the underlying tax charges. According to the evidence at trial, Herrington was previously convicted of a felony offense. When he was arrested, Herrington possessed six different firearms, including five shotguns and a magnum rifle.
Special agents from TIGTA, IRS-Criminal Investigation and ATF conducted the investigation. Tax Division Trial Attorneys Kenneth Vert and Jeffrey McLellan prosecuted the case for the United States. Assistant Attorney General Kathryn Keneally of the Justice Department’s Tax Division commended the special agents and thanked U.S. Attorney Barbara L. McQuade and her entire office for their assistance.
More information about the Tax Division and its enforcement efforts can be found at www.justice.com/tax.