Herbert C. Watts Jailed for Tax Evasion on $2.3M Cash Haul

Herbert C. Watts, 70, of Grayslake, Illinois, is headed to federal prison for nine months after systematically hiding more than $2.3 million in cash receipts from the IRS. The businessman, owner and president of Branko Perforating FWD Inc. in Bristol, Wisconsin, admitted to concealing income from scrap metal sales during every tax year from 2009 to 2014.

Watts funneled over $2.3 million in cash from a Cicero-based scrap buyer directly into personal and business use—bypassing accounting records and tax filings. The transactions were never logged in company books, and Watts deliberately withheld the information from accountants preparing his personal and corporate returns. The scheme allowed him to file false tax returns year after year.

In court, Assistant U.S. Attorney Patrick King didn’t mince words: “Defendant’s conduct was little more than repetitive evasion motivated by greed.” King emphasized in a sentencing memorandum that such actions erode public trust in the tax system and embolden others to cheat. “Evasion feeds on itself, reducing respect for the integrity of the tax system and leading to more cheating,” he wrote.

U.S. District Judge John Robert Blakey imposed the nine-month sentence and slapped Watts with a $10,000 fine. Before sentencing, Watts coughed up all back taxes owed to both the federal government and the state of Illinois—a rare move that likely spared him additional charges but didn’t erase his criminal liability.

The case is part of a broader crackdown by federal investigators targeting cash-heavy operations in the regional scrap metal trade. Authorities have already secured multiple convictions tied to unreported transactions, revealing a pattern of financial secrecy and deliberate tax avoidance in the industry.

The sentencing was announced by Zachary T. Fardon, U.S. Attorney for the Northern District of Illinois, and James D. Robnett, Special Agent-in-Charge of IRS Criminal Investigation in Chicago. They reaffirmed their commitment to rooting out financial crimes that undermine public revenue—especially those fueled by cash, concealment, and long-term deception.