CLEVELAND Tax cheats to pay penalty

IRS-imposed penalties and interest could more than double the scrap dealers' tax liability.
CLEVELAND -- A Minerva man was sentenced Thursday to six months of electronically monitored house arrest and three years' probation, and fined $20,000 on charges of conspiring to impede the IRS and filing false tax returns from 1990-94. U.S. District Judge Dan Polster also ordered Daniel Swindell to pay back taxes, penalties and interest due the IRS.
The federal indictment said Swindell entered into an agreement to sell scrap metal produced from Valley Forge Inc. of Salem, of which he was a part owner, to the Frank Sherman Co. -- a Youngstown scrap metal dealer -- for cash payments Swindell did not report as income.
How scheme worked: As part of the scheme, the Frank Sherman Co. prepared false invoices, which did not bear Swindell's name, the U.S. attorney said. Over a six-year period, Swindell received $178,218 in unreported income, the government added.
Jacob Klein and Kenneth Kreco, president and vice president, respectively, of Frank Sherman Co., were charged with conspiracy to defraud the U.S. government in the same scheme, and each was sentenced to six months of home confinement and two years' probation. Klein was fined $15,000 and Greco, $10,000.
Other scrap dealers who received cash and didn't report it as income also have pleaded guilty and been sentenced. They are subject to IRS-imposed penalties and interest, which could more than double their original tax liability, the U.S. attorney's office said.
John W. Rutana of Poland was sentenced to five months in a halfway house and a year's probation.
Other sentences: The rest of them were sentenced to between one and six months of house arrest, plus between one and five years' probation, and fined between $1,000 and $3,000: Ralph E. Unis Jr. of Pittsburgh; Richard A. Boccia of Warren; James E. Reichard of Salem; Michael D. Ritzert and James R. Elliot, both of Ellwood City (both also sentenced to a month in prison); Ronald G. Watson of Conneaut; and Joseph J. Corvino of East Palestine.
The IRS Criminal Investigation Division in Youngstown investigated the case.