WASHINGTON (AP) — An Oregon man has been sentenced to a year and a day in prison for failing to pay more than $879,000 in federal taxes on a secret liquor bottling operation that also produced wine containing dangerous heavy metals.
William Myers, of Cottage Grove, Ore., ran up the tax bill while falsely telling the government that he had conducted no business at his company, officials said in a court filing distributed Wednesday. In addition to secretly blending and bottling bulk liquor, Myers operated an illegal still for local wineries, the filing said.
The sentence marks an unusually public, double-barreled victory for the Treasury Department office that collects taxes on alcohol and ensures that it is being produced safely.
In addition to the prison sentence, Myers, 66, was ordered to pay more than $873,000 in restitution to the Treasury bureau and undergo three years of supervised release.
Myers' company, Side Pocket Food Co., was licensed by Treasury's Alcohol and Tobacco Tax and Trade Bureau, or TTB, to process, blend and bottle wholesale liquor, according to court documents. The company was not authorized to distill alcohol.
The bureau wears many hats in its work with the liquor industry. It collects federal excise taxes after liquor is produced, tests products for safety and writes and enforces rules.
The TTB is the third-biggest revenue collector in the federal government, after the Internal Revenue Service and Customs. It has criminal law enforcement authority, but until recently did not have the budget to hire agents and pursue criminal wrongdoing. With a still-small budget and limited staff, the agency seeks to encourage companies to comply with the law voluntarily.
As a result public criminal findings like the case against Myers are relatively rare.
Side Pocket was supposed to pay taxes on behalf of clients — companies for which it bottled liquor. Myers collected those payments but used the money to pay his credit card, mortgage and car bills, according to court papers. He told the government that his business wasn't operational so he owed no taxes.
"Failure to pay taxes is not a victimless crime," Timothy Marsh, the bureau's deputy director for criminal enforcement, said in a statement. "It robs the community of revenue and hurts law-abiding businesses."
Myers had pleaded guilty in October to filing false tax returns as part of a deal to avoid additional charges.