Lakewood man sentenced to jail, ordered to pay nearly $1.8 million for tax fraud involving yacht and luxury travel
Tuesday, August 16, 2016
A Lakewood man was sentenced to a year in custody and ordered to pay nearly $1.8 million restitution and fines for taking improper write-offs and not reporting taxable income, said Carole S. Rendon, United States Attorney for the Northern District of Ohio, and Kathy Enstrom, Special Agent in Charge, IRS Criminal Investigation, Cincinnati Field Office.
Thomas G. Klocker, 47, was previously found guilty of four counts of tax evasion. U.S. District Judge James Gwin sentenced Klocker to six months incarceration followed by six months of home confinement. Klocker was fined $500,000 and has paid nearly $1.3 million in restitution to the IRS.
“This defendant tried to take the government on a ride by claiming costs associated with cruises on his luxury yacht as business expenses,” Rendon said. “Now he has to pay up, both financially and with his freedom.”
“Tax evasion is not a victimless crime," Enstrom said. "We all pay when others swindle the government. Tax evasion and tax fraud of this magnitude and with this degree of trickery, dishonesty and deceit, deserves to be punished."
Klocker was the sole shareholder and operator of All Metal Sales (AMS) in Westlake. He also operated TT Charter Leasing, which was in the business of chartering the luxury yacht “Tommy Time”, according to court documents.
Klocker diverted corporate funds from AMS for his own use to benefit his personal lifestyle and avoid personal income liabilities between 2007 and 2010. For example, Klocker diverted funds from AMS to construct a waterfront residence in Lakewood and to maintain his 68’ Sunseeker yacht, as well as to pay for luxury travel and to make cash withdrawals. He reported substantial business losses arising from the operating costs and expenses arising from the personal use of the TT Charter Leasing yacht, according to court documents.
He also misrepresented his personal expenses entered into AMS’ books and records by falsely describing them as legitimate business expenses. Klocker also provided false information to his tax-return preparers about expenses he described as business-related which were, in fact, personal in nature – including luxury travel with his family, according to court documents.
This case is being prosecuted by Assistant U.S. Attorneys Robert J. Patton and Suzana Koch following an investigation by the Internal Revenue Service – Criminal Investigations, with assistance from the Federal Bureau of Investigation – Cleveland Field Office.