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McMechen Roofing Contractor Sentenced for Tax Evasion and Mail Fraud
In a shocking case of dishonest business practices, Stephen J. Gretchen, a 45-year-old roofing and general contractor from McMechen, West Virginia, was sentenced to 12 months and 1 day in prison for failing to report cash payments to his employees and fraudulently collecting insurance benefits for staged damage to his vehicle.
Gretchen knowingly underreported the wages, tips, and other compensation that he paid to his employees, with some receiving their payments in cash ‘off the books.’ He filed quarterly tax returns that failed to report these cash payments and failed to withhold certain tax amounts on behalf of his employees. In the second quarter of 2011, Gretchen reported that he paid no wages, tips, or other compensation to his employees, when in fact he had paid approximately $22,880.00.
The investigation revealed that Gretchen owned a 2011 Coachman Freedom Express camping trailer, which he paid one of his employees to deliberately and repeatedly crash a dump truck into, causing damage that totally destroyed the camping trailer for insurance purposes. Gretchen filed a claim with his insurance company, falsely reporting that the damage was caused by a hit-and-run accident. The insurance company sent Gretchen a check for $27,776.85 via FedEx in June 2012.
Gretchen pled guilty in January 2015 to one count of ‘Filing a False Form 941, Employees’ Quarterly Federal Tax Return,’ and one count of ‘Mail Fraud.’ Assistant U.S. Attorney Robert McWilliams prosecuted the case on behalf of the government, with the Internal Revenue Service-Criminal Investigation, the United States Postal Inspection Service, and the West Virginia Offices of the Insurance Commissioner, Fraud Investigation Unit, conducting the investigation.
U.S. District Judge John Preston Bailey presided over the case, handing down the sentence to Gretchen.
Gretchen’s sentence marks the end of a long and complicated case, which highlights the importance of honest business practices and the consequences of fraudulent behavior. As the investigation revealed, Gretchen’s actions not only damaged his employees and his business but also cheated the system and put innocent people at risk.
Key Facts
- State: West Virginia
- Category: White Collar Crime|Fraud & Financial Crimes
- Source: DOJ Press Release â†â€â€
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