James L. Santelle, the United States Attorney for the Eastern District of Wisconsin, announced that on June 1, 2011, Chief U.S. District Judge Charles N. Clevert sentenced James Wierzbicki (age:63), of Kenosha, Wisconsin, and two of his children, Eric Wierzbicki (age: 35) and Erin Morton (nee Wierzbicki) (age: 33) in connection with federal tax violations arising out of their involvement in the family’s commercial painting business.

Judge Clevert sentenced James to 32 months in prison, to be followed by three years of supervised release, and ordered him to pay restitution to the Internal Revenue Service in the amount of $418,522.66. Eric Wierzbicki, who is James’s son, was sentenced to five years probation, 4 months in jail, and ordered him to pay restitution to the IRS, along with his father, in the amount of $300,922.39. Erin Morton was sentenced to five years probation, 60 days in jail, and ordered to pay restitution, along with her father, to the IRS in the amount of $96,000.

James Wierzbicki previously pleaded guilty to conspiring to defraud the United States for the purpose of impeding the IRS. Eric pleaded guilty to two counts of failing to pay payroll taxes. Erin Morton pleaded guilty to conspiring with her family to fail to pay payroll taxes.

These convictions arose out of the Wierzbickis’ involvement in one or more of a series of commercial painting and dry walling businesses operated in the Kenosha area, including Southport Remodeling and Construction, SRC Painting, and PBN, LLC, and their failure to pay payroll taxes that had been withheld from employee wages. The Wierzbickis failed to file quarterly payroll tax returns, filed false payroll tax returns, and paid employees in cash to avoid payroll taxes.

In addition, after accumulating substantial payroll tax liabilities, the Wierzbickis would abandon one business, transfer the business operation to a successor business, and recruit someone to act as the nominee owner for the new business. The Wierzbickis also deposited business receipts from one business into their personal accounts, as well as to accounts for successor businesses

In addition, James Wierzbicki’s other son, Edmund Wierzbicki,(age: 37) previously pleaded guilty to failing to file a federal income tax return for the year 2003, when he was being paid by his family’s painting businesses. Judge Clevert sentenced Edmund to four years probation, 14 days in jail, and ordered him to pay a $3,275 fine.

These matters were investigated by Internal Revenue Service-Criminal Investigation special agents and were prosecuted by Assistant United States Attorney Matthew L. Jacobs.

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