John Chandler Propstra, Tax Evasion, Arizona 2023

PHOENIX – A Paradise Valley man has been sentenced to 21 months in prison for his role in a massive tax evasion scheme that left the IRS with a staggering bill of $700,000.

U.S. District Judge Steven P. Logan handed down the sentence to John Chandler Propstra, 47, on charges of tax evasion. Propstra was also ordered to pay three years of supervised release and the $700,000 in restitution to the Internal Revenue Service.

According to court documents, Propstra owned and operated several professional employment organizations that contracted with small business owners to provide payroll services. However, instead of paying the federal employment taxes to the IRS as he contracted to do, Propstra kept a significant portion of the taxes for his own personal use.

To conceal his theft, Propstra filed false employment tax returns with the IRS, which overstated the tax payments he purportedly made. He eventually stopped filing employment tax returns altogether. Propstra also failed to file accurate wage reports with the Social Security Administration, which the IRS could have used to cross-check against Propstra’s IRS filings and tax payments.

The investigation in this case was conducted by Internal Revenue Service Criminal Investigation. The prosecution was handled by Bridget Minder and Peter Sexton, Assistant United States Attorneys, District of Arizona, Phoenix.

The scheme, which spanned two years, saw Propstra collect $710,819.05 in federal employment taxes from his companies Star Human Resources, Star H Resources, Star HR, and Prop HR. However, instead of paying the taxes over to the IRS, Propstra kept the money for himself.

Propstra’s other companies included Guaranteed HR Consulting, HR Rock, Rock HR, Consulting Guaranteed, and Rock Solid Consulting. It is unclear whether these companies are still in operation.

The sentence is a stark reminder of the consequences of tax evasion and the importance of transparency in financial dealings. It is a warning to those who think they can cheat the system and get away with it.

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