PORTLAND, OR. – On Tuesday, January 5, 2015, U.S. District Court Chief Judge Ann Aiken sentenced Gary L. Ford, 55, of Bend, Oregon, today to 18 months in prison for filing false tax returns in 2007, 2008, and 2009. Judge Aiken also sentenced Ford to serve one year of supervised release and ordered him to pay $580,454 in restitution, representing the amount Ford failed to report to the IRS.
According to court documents, since 1992 Gary Ford has been the sole proprietor of Summit Plumbing in Bend, Oregon, specializing in new residential construction in Central Oregon. Ford’s company routinely undercut competitor’s bids. This imbalance in the marketplace greatly benefitted Ford’s business. In 2007, on a loan application for a new $1.2 million vacation home in the PGA West golf club and resort in La Quinta, CA, Ford claimed he earned $26,500 per month. Ford’s spending habits supported this claim. In 2009 alone, he spent more than $900,000 on personal expenses, $355,000 on real estate, and $280,000 on other investments. These were Ford’s personal expenses in excess of his business expenses.
Meanwhile, Ford filed tax returns claiming he lived at or below the poverty line, even going so far as to claim refunds for the years in question. In reality, between 2006 and 2009, Ford failed to report almost $1.7 million in income and to pay more than $580,000 in federal income taxes. In fact, in most years, Ford paid more in interest on his three properties than he claimed as income. Ford evaded his full tax obligation by simply failing to include as income monies received from customers who did not issue him a Form 1099. In other words, the only income Ford reported was the payments that his customers independently reported to the IRS.
“Mr. Ford’s case is an example of what happens when someone selfishly puts their own unfettered wants above the common good and the law,” stated Special Agent in Charge Teri Alexander of IRS Criminal Investigation. “Mr. Ford accumulated properties and spent lavishly while utterly shirking his civic duty to pay an honest tax. Not only that, but he left many competitors in the lurch as he undercut their bids due to the simple fact that knowing he would not be paying his taxes allowed him to recklessly offer lower bids. That’s not fair, that’s not just, and IRS CI will always fight to ensure everyone on the playing field is playing by the same rules.”
This case was investigated by Internal Revenue Service-Criminal Investigations. It was prosecuted by Assistant U.S. Attorney Scott E. Bradford.