Diane L. Kroupa, Tax Fraud Conspiracy, Minnesota 2023

Tax Judge and Husband Sentenced for Multi-Year Tax Fraud Conspiracy

A federal judge in St. Paul, Minnesota has sentenced a former United States Tax Court judge and her husband to prison for their roles in a multi-year tax fraud conspiracy. Diane L. Kroupa, 61, was sentenced to 34 months in prison, while her husband, Robert E. Fackler, 63, received a 24-month sentence.

The sentencing, which took place on [no date], marked the culmination of a nearly decade-long investigation into the couple's activities. According to court documents, Kroupa and Fackler conspired to defraud the Internal Revenue Service (IRS) from 2002 to 2012 by filing false tax returns that included personal expenses as business deductions.

The defendants, who were married from 2004 to 2013, owned a home in Plymouth, Minnesota, and leased a second residence in Easton, Maryland. They used the Maryland home as a personal residence while Kroupa fulfilled her duties as a Tax Court Judge in Washington, D.C. The couple's scheme involved deducting personal expenses, including rent and utilities for the Maryland home, pilates classes, spa and massage fees, and expenses for vacations to various countries.

Kroupa used her knowledge of tax laws to further the conspiracy, preparing and providing summaries of personal expenses to Fackler that were falsely described as business expense categories. The couple's scheme resulted in the fraudulent deduction of at least $500,000 in personal expenses as purported Schedule C business expenses between 2004 and 2010.

The sentencing of Kroupa and Fackler serves as a reminder that no one is above the law, regardless of their position of public trust. 'When a person in a position of trust violates that trust, the public is a victim,' Judge Wilhelmina M. Wright stated during the sentencing hearing.

The case was investigated by the IRS-Criminal Investigation and the United States Postal Inspection Service. 'Everyone in society must play by the same rules,' said Hubbard Burgess, Acting Special Agent in Charge, IRS-Criminal Investigation. 'We will protect the integrity of the tax system by ensuring everyone pays their fair share, including federal officials.'

Diane L. Kroupa, a former judge who was appointed to the United States Tax Court on June 13, 2003, for a term of 15 years, was sentenced to 34 months in prison. Robert E. Fackler, a self-employed lobbyist and political consultant who owned and operated a business known as Grassroots Consulting, received a 24-month sentence.

Source: https://www.justice.gov/usao-mn/pr/former-united-states-tax-court-judge-and-husband-sentenced-multi-year-tax-fraud