FOR IMMEDIATE RELEASE
August 6, 2004
FORMER OWNER OF DENVER AUTO PARTS COMPANY SENTENCED FOR THEFT OF PENSION FUNDS AND TAX FRAUD
DENVER – John Suthers, United States Attorney for the District of Colorado, Terry L. Stuart, Special Agent In Charge of the IRS-Criminal Investigation, Denver Field Office and Steven R. Eischen, Regional Director, Kansas City Regional Office, Department of Labor Employee Benefits Security Administration, announced today that GARY CHRIS PAPPAS, JR., age 37, of Highlands Ranch, Colorado, was sentenced this morning by U.S. District Court Judge Robert E. Blackburn to serve 3 years probation, including 10 months of home detention, for theft of pension funds and tax fraud. PAPPAS was also ordered to pay restitution in the amount of $65,778.36 to the Internal Revenue Service and $13,916.76 to the victims of the crime.
PAPPAS pled guilty on May 6, 2004 to embezzlement from an employee benefit plan, failure to pay employee federal payroll taxes, and filing a false tax refund claim with the Internal Revenue Service. PAPPAS was indicted by a federal grand jury in Denver on August, 20, 2003.
According to the indictment, PAPPAS was the owner and operator of Pro Auto Parts Inc., a Denver auto parts supply business. In August of 1999 through January of 2000, PAPPAS embezzled funds from the company’s employee pension. He also took funds from the employee welfare benefit plan and failed to forward health insurance premiums.
The indictment also stated that PAPPAS failed to pay $61,402.55 in employee payroll taxes for three quarters in 1999, failed to file an Employer’s Quarterly Federal Tax Return for each of the three quarters in 1999, and filed a false tax refund claim in the amount of $5,463.00 on his 1999 federal income tax return with the Internal Revenue Service. Pro Auto Parts, Inc. ceased operations in November 1999.
“Business owners should be pillars of our community, not the architects of tax fraud schemes that victimize their employee benefit plans,” said John Suthers, United States Attorney.
Terry L. Stuart, Special Agent In Charge of the IRS-Criminal Investigation, stated, “Free enterprise is very important, but it certainly doesn't include tax fraud and stealing people’s benefit payments from honest taxpayers.”
“Persons and organizations engaging in this type of employee exploitation and fraud will continue to be a high priority in our enforcement efforts,” said Steven R. Eischen, Regional Director, Kansas City Regional Office, Department of Labor Employee Benefits Security Administration.
The PAPPAS case was investigated by Special Agents from the IRS-Criminal Investigation , and investigators from the US Department of Labor, Employee Benefits Security Administration. The case was prosecuted by Assistant United States Attorney Kenneth M. Harmon.
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