A west Michigan man convicted of tax evasion has been sentenced to prison, officials said.
James Phillip Scholten was given 20 months in prison by a federal judge, U.S. Attorney for the Western District of Michigan Timothy VerHey announced Tuesday.
The Byron Center resident was also ordered to three years of supervised release following his prison sentence and to pay the IRS $868,707 in restitution, according to authorities.
“Cheating on your taxes is not only illegal, it’s also not worth the risk,” VerHey said. “Scholten knew he owed a lot of money to the government, had the money to pay, but decided to keep it for himself. Now he is going to prison and will have to pay his taxes anyway. I ask everyone to voluntarily pay the taxes they owe so that cases like this become unnecessary.”
Reached Wednesday, Scholten’s attorney, Peter Alan VanGelderen, said he and his client “believe this is a fair sentence in light of the circumstances.”
He added: “Mr. Scholten remains remorseful and focused on repayment of the restitution.”
Prosecutors alleged the 51-year-old failed to report $3.4 million of income generated through the sale of scrap material over 13 years. At the time, Scholten worked for a manufacturing company and regularly sold scrap metal to a recycling company, according to court documents.
He never told his certified public accountant about the income when tax returns were filed on Scholten’s behalf from 2011 until 2023.
Federal agents said Scholten admitted to intentionally failing to provide his accountant with recycling payment records and the amounts of his recycling income to evade assessment of tax due and owing on that income.
Scholten pleaded guilty to federal tax evasion in January and agreed to pay the IRS restitution.
He faced a maximum of five years in prison.
“Today, justice is served, and James Scholten has been held accountable for his criminal actions,” Karen Wingerd, Special Agent in Charge of the IRS Criminal Investigation’s Detroit Field Office, said in a statement. “Stealing materials from your employer and using them for your own profit can only be hidden for so long.
“IRS special agents work tirelessly every day to identify and bring to prosecution both those who commit fraud, and those who evade their tax obligation on that fraudulent money — it’s a matter of maintaining public confidence in our system of taxation as well as the justice system.”
Scholten is among Michigan residents recently accused of tax evasion.
Last September, a Torch Lake man was charged with tax evasion in connection with an illegal Otsego County marijuana grow operation. He pleaded no contest to misdemeanor charges in November and was sentenced in January to one year of probation, according to court records.
Last August, two church leaders were indicted by a federal grand jury in Detroit for money laundering and forcing people to work at call centers in Michigan, Florida, Texas, and Missouri.
In October 2024, an Oakland County man pleaded guilty to evading about $318,000 in federal income taxes.
cramirez@detroitnews.com
@CharlesERamirez
This article originally appeared on The Detroit News: West Michigan man gets prison for tax evasion
Reporting by Charles E. Ramirez, The Detroit News / The Detroit News
USA TODAY Network via Reuters Connect
