Elkhart business owner gets prison for hiding assets
Posted: 05/18/2012 at 1:15 am
By: Justin Leighty
Kenneth A. Gaipa was sentenced Thursday in U.S. District Court in South Bend, where he pleaded guilty to the crimes in February.
“I admit that I knowingly and willfully evaded federal income taxes for the years 2008 through 2010 ... in part by using business accounts for Kenneth G Rare Coins and Estate Jewelry to pay for personal expenses and having all of these expenses reported as if they were business expenses,” Gaipa wrote in his guilty plea.
“I also skimmed cash from the business throughout these years,” and didn’t tell his tax preparer that significant amounts of his personal expenses were passed off as business expenses, significantly under-reporting his income to the IRS, “in part to allow me to continue to receive Social Security disability payments to which I was not entitled,” he admitted.
Last year he told the Social Security Administration he hadn’t worked since 2006, which was a lie. “I earned substantial income during this period and I was the true owner of and operated Kenneth G Rare Coins and Estate Jewelry which earned substantial profits in 2008 through 2011,” he admitted.
He also admitted to filing a false bankruptcy petition in 2008 and hid assets, claiming he only lent his name to the business.
Nancy Gargula, U.S. Trustee for Indiana and part of Illinois, oversees bankruptcy administration and litigation for the U.S. Justice Department. Gargula said in a written statement, “Concealing assets in a bankruptcy proceeding is a crime that threatens the integrity of the bankruptcy process and public confidence in that process,” and she thanked law-enforcement officers and U.S. Attorney David Capp for their work on the case.
In addition to two years in prison, Judge Robert Miller ordered Gaipa, 43, of Elkhart, to spend two years on supervised release after prison and to pay $315,196.64 in restitution, a $30,000 fine and $500 in fees, according to Capp’s office.