For roughly 30 years under the stewardship of co-founder Jim Pielsticker, Arrow Trucking Company not only survived but also thrived and employed thousands of people in Tulsa and beyond. But, the successful chapter in the company’s history seemed to come to a close with the tragic death of Jim Pielsticker in a small plane crash during a hunting trip in 2001. His son, Doug Pielsticker, took over as company CEO.
Under Doug Pielsticker’s leadership, the company would hardly make it through the decade. Only three days before Christmas in 2009, Arrow’s lender decided that the reversal in the company’s fortunes made it imprudent for the bank to loan the trucking company any more money. That day, company executives told employees to go home and closed the company. By January 2010, the company declared bankruptcy. Arrow truck drivers on the road were apparently not informed of the company’s closure and found out when their gas cards would not work and they were left stranded.
Employees allege that Doug Pielsticker was nothing like his father who, originally, was a truck driver & a lawyer. While the younger Pielsticker claims he attempted to keep the company in growth mode, employees tell a different story. One employee alleged that Doug Pielsticker lived extravagantly and hired college friends to replace dependable workers and managers. It appears that the employee’s allegations had at least some merit. Last December Doug Pielsticker was indicted on 23 tax and other fraud charges.
According to allegations leveled by federal prosecutors, Pielsticker improperly used company funds to finance his lavish lifestyle. The scheme by Pielsticker involved the violation of the company’s duties and obligations associated with the payroll tax. Under the U.S. Tax Code businesses have an obligation to account for, hold, and pay over employment payroll taxes to the government.
Under the scheme, Pielsticker and other Arrow Trucking executives conspired to and actually defrauded the United Stated by failing to account for and pay over greater than $9 million in trust fund taxes. Trust fund taxes that went unaccounted for and unpaid included Medicare, Social Security, and federal income tax payments for employees.
After initially pleading not guilty to the 23-count indictment in December 2014, Pielsticker reversed course and decided to plead guilty to the tax evasion charges regarding his personal income tax filing in February 2015. The former CEO pleaded guilty under 18 USC 371 and 18 USC 7201. 18 USC 371 sets forth the crime of and criminal penalties for conspiracy to defraud the United States. 18 USC 7201 sets forth the crime of and penalties for criminal tax evasion. Criminal tax evasion can occur whenever a taxpayer willfully endeavors to or actually defeats the assessment of tax or fails to pay over tax established as due and owing.
As part of the plea, Pielsticker admitted that Arrow Trucking Company funds were used to make payments on behalf of the conspirators for:
As part of the plea agreement, Pielsticker also admitted to providing the Transportation Alliance Bank with inaccurate and fraudulent invoices that resulted in the company being compensated in excess of the c contractual agreement between the companies.
Since pleading guilty, Pielsticker has been on the hook for up to a 10-year federal prison sentence. Furthermore, Pielsticker also faces monetary judgments against him to recover the fraudulent proceeds of the bank and tax fraud scheme. While PIelsticker was scheduled to be sentenced this month, a scheduling conflict has pushed the sentencing hearing back until October. And thus, a once prominent CEO is now left with the anxiety and uncertainty of what exact sentence he will face and serve once the court reconvenes.
If you are facing serious tax fraud or tax evasion charges, the stakes are too high to go it alone. A tax fraud conviction can result in the loss of your freedom and can cause significant damage to your standing and reputation. The experienced and dedicated tax professionals of the Tax Law Office of David W. Klasing provides taxpayers accused of serious crimes with potential legal options to mitigate the charges you face. To schedule a reduced-rate tax consultation, call 800-681-1295 or contact us online today.