Federal authorities say that an Indiana man was sentenced to more than 4 years in prison for a fraud scheme he allegedly perpetrated against the owners of a trucking company.
On January 17, Douglas Ray Thomas was sentenced to 51 months in prison, two years of supervised release, and $692,457.13 in restitution in the U.S. District Court in Minneapolis, Minnesota.
Thomas had previously pled guilty to one count of wire fraud and one count of failing to account for and pay over employment taxes.
The Internal Revenue Service (IRS) detailed the scheme:
According to the defendant’s guilty plea and documents filed in court, from September 2013 through June 2014, Thomas devised and executed a fraud scheme to gain control over the assets and revenue of Northwoods Trucking, Inc., a transportation company located in Duluth, Minnesota. On October 18, 2013, Thomas and the former owners of Northwoods Trucking entered into a stock purchase agreement in which Thomas agreed to purchase all outstanding shares of the company for $730,000. As part of the agreement, Thomas agreed to make an initial payment within five days of closing. Despite failing to make the initial payment, as well as subsequent payments pursuant to the purchase agreement, Thomas assumed control of the company in December of 2013 and, shortly thereafter, began transferring Northwoods Trucking’s business revenue into a bank account that Thomas alone controlled.
According to the defendant’s guilty plea and documents filed in court, while he owned and operated the company, Thomas repeatedly failed to pay many of the company’s liabilities, including fuel and insurance for the company’s trucks, payroll to employees and employment taxes due to the Internal Revenue Service (IRS). Instead, Thomas used a significant portion of Northwoods Trucking’s business revenue to pay personal expenses and debts, including housing, furniture and a family vacation. The total loss caused by Thomas’s fraud scheme is approximately $730,000, in addition to $57,792.13 in employment taxes that he failed to pay to the IRS.
The Internal Revenue Service-Criminal Investigation Division and the FBI assisted in the investigation into the scheme.