FAYETTEVILLE -- A Lincoln man was sentenced to federal prison and ordered to pay more than $400,000 in restitution for tax evasion.
Derek E. Sands, 37, was sentenced to nine months in federal prison to be followed by another nine months of home detention while under electronic monitoring and a term of supervised release for 27 months.
Sands was further ordered to pay a total of $409,958 in restitution for his conviction on one felony count of attempt to evade or defeat tax.
According to court records, Sands owned and operated a fencing business using the names Sands Fencing, Sands Fencing & Outdoor Living Areas, and Sands Enterprises, Inc. The Internal Revenue Service Criminal Investigation Division began looking into Sands after receiving information that he was, among other things, cashing thousands of dollars of his customer's checks instead of depositing the checks into a bank account. The investigation found Sands last filed a personal federal income tax return for the tax year 2009, and had not filed personal federal income tax returns for tax years 2010-2017, even though he earned income and was required to file a return during each of those years.
The investigation found Sands willfully evaded payment and assessment of income tax. He paid his employees in cash and converted customer's checks to cash. Sands also gave a family member out-of-state customer's checks to deposit into a family member's bank account and then had the family write Sands a check for the same amount so he could cash it at his local bank. When customers paid Sands by credit card, he ran the credit card through his company's material supplier's bank account and then had the credit applied to his materials account.
Sands was charged in June. United States Magistrate Judge Erin L. Wiedemann accepted Sands' guilty plea.
U.S. District Judge Timothy L. Brooks presided over the sentencing hearing. Assistant U.S. Attorney Kimberly Harris prosecuted the case.
NW News on 10/11/2019