BUSINESSMAN SENTENCED FOR TAX FRAUD

FROM:  U.S. JUSTICE DEPARTMENT 
Monday, September 30, 2013
North Carolina Businessman Sentenced for Tax Fraud

William Robert Hupman Jr., of Mebane, N.C., was sentenced to serve 17 months in prison followed by one year of supervised release for tax fraud today, the Justice Department and the Internal Revenue Service (IRS) announced.  Hupman was also ordered to pay restitution to the IRS of $103,420.

Hupman pleaded guilty on May 31, 2013, to corruptly endeavoring to obstruct or impede the due administration of the Internal Revenue laws.  According to court documents and court proceedings, Hupman managed and controlled Security Concepts LLC (SC), a security alarm company based in Mebane, N.C.  Instead of receiving a salary from SC, Hupman received income by using an SC debit card to pay his expenses.  Despite receiving over $770,000 in such fees between 2007 and 2011, Hupman has not filed an individual income tax return since tax year 2006.

Court documents indicate that in addition to his failure to comply with his personal income tax responsibilities, Hupman also failed to comply with his employment tax responsibilities at SC.  As the person who managed and controlled SC, Hupman was responsible for withholding employment taxes and paying them over to the IRS on a periodic basis.  SC last paid over employment taxes and filed the required tax form for the third quarter of 2009, despite the fact that employment taxes were actually withheld from the wages of SC employees. Hupman did not pay employment taxes or file the required tax form for the fourth quarter of 2009 or any of the quarters in 2010 and 2011.  He also has not paid the federal unemployment taxes owed or filed the required tax form for years 2009, 2010 or 2011.  According to court documents and court proceedings, the criminal tax loss was $103,420.

Kathryn Keneally, Assistant Attorney General of the Justice Department’s Tax Division, thanked Special Agents of IRS - Criminal Investigation, who investigated the case, and Tax Division Trial Attorneys Todd Ellinwood and Kevin Lombardi for prosecuting the case.