The president of a family-run mineral processing plant in Beaver County managed to avoid prison on Wednesday for cheating on taxes but has to pay the government $277,000 in fines and restitution, most of which he has already paid.
U.S. District Judge Arthur Schwab imposed three years of probation on Paul Austin, 60, of Mt. Lebanon, who runs J.P. Austin Associates in Beaver Falls and had declared his kids’ college tuition as business expenses.
The judge ordered him to pay $222,255 to the IRS plus a $55,000 fine.
Sentencing guidelines called for up to a year behind bars. Austin’s Philadelphia lawyer, Richard Zack, asked for probation, saying Austin’s company provides jobs in an area devastated by the collapse of industry and the opioid epidemic.
Austin had waived indictment earlier this year and pleaded guilty following a probe by the criminal investigation division of the IRS.
From 2012 through 2017, Austin was president of the company and his wife was the treasurer. They jointly filed Form 1040 for those calendar years.
Austin admitted that he had his company pay for college expenses for his two sons, including tuition and student loan payments, and then categorized them as business expenses under bogus vendor names.
The couple’s tax preparer didn’t know about the college expenses, prosecutors said, and the payments weren’t included as taxable income on the 1040 forms filed with the IRS. Austin’s wife didn’t know, either, according to prosecutors.
As a result, Austin underreported his income. In June, he paid the $222,255 in restitution to the IRS.
Zack said his client and his wife left the Pittsburgh region in the 1980s after college to start careers in Detroit but that Austin returned after his father died to take over the family business. Austin, he said, made no excuses for his crime and took responsibility right away when the IRS began investigating.
“I am deeply remorseful, ashamed, and saddened for putting my family, friends, and employees through this painful experience,” he wrote to the probation office. “I know that I have no one to blame but myself. I apologize to the United States taxpayers for failing to pay my fair share of taxes.”
Torsten covers the courts for the Pittsburgh Post-Gazette, but he's currently on strike. Reach him at jtorsteno@gmail.com.
