By Ryan Storz
Carl J. Neff, 61, the owner of Bourbon Metal Recycling, has been sentenced to 18 months in prison for under reporting his income and defrauding social security by not reporting his income.
The United States Attorney’s Office announced the sentencing on Friday. Neff will also be ordered to pay restitution of $432,628.
Neff was arrested back in April. The IRS found that Neff was not reporting any income from Bourbon Metal Recycling.
He did not provide information about the business to a commercial tax return preparer.
He pleaded guilty in April to one felony count of filing a false tax return and one felony county of social security fraud.
Neff was sentenced by United States District Judge Rodney W. Sippel in St. Louis.
As part of his plea, Neff has agreed to the forfeiture of $66,413 derived from the legal activity.
For the calendar years 2003-2006, the business gross receipts were approximately $1,557,618. None of this income was reported on Neff’s tax returns for those years and the existence of the business was omitted from the returns.
The total additional tax due and owing for the four years is $378,354.
Bourbon Metal Recycling begun operations in 2002. The business purchases scrap metal from the public and resells it to larger scrap metal companies, mostly in the St. Louis area.
Neff paid cash to his customers to purchase the scrap metal and oversaw all business decisions, including hiring, firing, prices and decisions about where to sell the scrap metal.
Employees of the business were paid in cash.
During the time he was operating the business, he was also receiving Social Security disability payments because of an injury to his hand. In order to receive these payments, he could not be substantially and gainfully employed.
In addition, Neff periodically had to complete forms for the Social Security Administration, which provided information concerning both his disability and his work, including the amount he was earning.
Despite the fact that he was operating the business and making significant income doing so, he reported to Social Security that he continued to be disabled and was earning only a small amount of money.
During the time period September 2003 through October 2008, Neff received Social Security payments to which he was not entitled in the amount of $54,274.
“No matter what the source of income, all income is taxable,” said Toni Weirauch, Special Agent in Charge of IRS Criminal Investigation, St. Louis. “Tax evasion is not a victimless crime. We all pay when others swindle the government.”