By Kevin Murphy
For the Times
MADISON - A Brooklyn man who underreported his body shop's business income resulting in a $166,343 tax loss was placed on two years' probation Wednesday in federal court and ordered to speak to groups about violating tax laws.
Because Eric Grace already paid $329,439 in criminal and civil penalties District Judge James Peterson said he added the public speaking condition to contradict the perception that Grace bought his probation-only sentence.
"Probation-only may be perceived as a light sentence, so I want you to speak to other groups to dispel that notion," Peterson told Grace, who operates E.J's Paint and Repair. "You need to spread the word that you can't buy your way out of a sentence."
IRS Agent Robert Martin told Peterson that in his seven years investigating tax fraud he had never seen an individual pay all the criminal and civil tax penalties and interest prior to sentencing.
Grace faced 12-18 months in prison under advisory sentencing guidelines after pleading guilty to tax evasion in June. However, his attorney Stephen Kravit said Wednesday that the advance payment, coupled with his client's complete cooperation with the IRS and having never served a prison sentence warranted a just probation.
Peterson noted that Grace was a relatively wealthy man able to pay his substantial tax liability and penalties, although it resulted in greatly diminishing his net worth.
Kravit sought probation-only to allow Grace to continue operating his one-man shop which would permit him to fund his financial obligations to his family.
"More importantly it allows him continued access to his (two) sons," Kravit said.
Reading from a written statement Grace choked up as he mentioned he was "embarrassed" and "regretted" his mistake. He said he also understands the impact his crime had on his family and friends and that "this will never happen again."
Although Grace kept accurate records of business expenses, when customers made out checks to him personally he deposited them in his personal bank account and not his business account, Peterson said.
Grace discarded invoices paid for with checks made out to him and provided false information to his tax accountant from 2008-11 in a scheme to evade paying the proper amount of taxes, said Peterson.
Peterson called it a "repetitive, systematic pattern," Grace used to underreport his income and lessen his tax liability.
This occurred in spite of Grace being a "caring, hardworking individual," said Peterson.
Peterson received 25 letters of support from Grace's family members and friends, including from Rick Francois, of Francois Ford, of Belleville, who wrote that:
"Brooklyn's motto, "A small community with a big heart' fit Grace to a tee," since he was so community-minded in helping out others.
Kravit reiterated that Grace has already been sufficiently punished by the loss of his net worth, public embarrassment that he has not hid from and that probation was an appropriate sentence.
"He's like other people who've spent 1 percent of their lives doing wrong and 99 percent doing right, but suddenly that 1 percent of their lives becomes 90 percent. This is real life punishment to people with a conscience," Kravit said.
For the Times
MADISON - A Brooklyn man who underreported his body shop's business income resulting in a $166,343 tax loss was placed on two years' probation Wednesday in federal court and ordered to speak to groups about violating tax laws.
Because Eric Grace already paid $329,439 in criminal and civil penalties District Judge James Peterson said he added the public speaking condition to contradict the perception that Grace bought his probation-only sentence.
"Probation-only may be perceived as a light sentence, so I want you to speak to other groups to dispel that notion," Peterson told Grace, who operates E.J's Paint and Repair. "You need to spread the word that you can't buy your way out of a sentence."
IRS Agent Robert Martin told Peterson that in his seven years investigating tax fraud he had never seen an individual pay all the criminal and civil tax penalties and interest prior to sentencing.
Grace faced 12-18 months in prison under advisory sentencing guidelines after pleading guilty to tax evasion in June. However, his attorney Stephen Kravit said Wednesday that the advance payment, coupled with his client's complete cooperation with the IRS and having never served a prison sentence warranted a just probation.
Peterson noted that Grace was a relatively wealthy man able to pay his substantial tax liability and penalties, although it resulted in greatly diminishing his net worth.
Kravit sought probation-only to allow Grace to continue operating his one-man shop which would permit him to fund his financial obligations to his family.
"More importantly it allows him continued access to his (two) sons," Kravit said.
Reading from a written statement Grace choked up as he mentioned he was "embarrassed" and "regretted" his mistake. He said he also understands the impact his crime had on his family and friends and that "this will never happen again."
Although Grace kept accurate records of business expenses, when customers made out checks to him personally he deposited them in his personal bank account and not his business account, Peterson said.
Grace discarded invoices paid for with checks made out to him and provided false information to his tax accountant from 2008-11 in a scheme to evade paying the proper amount of taxes, said Peterson.
Peterson called it a "repetitive, systematic pattern," Grace used to underreport his income and lessen his tax liability.
This occurred in spite of Grace being a "caring, hardworking individual," said Peterson.
Peterson received 25 letters of support from Grace's family members and friends, including from Rick Francois, of Francois Ford, of Belleville, who wrote that:
"Brooklyn's motto, "A small community with a big heart' fit Grace to a tee," since he was so community-minded in helping out others.
Kravit reiterated that Grace has already been sufficiently punished by the loss of his net worth, public embarrassment that he has not hid from and that probation was an appropriate sentence.
"He's like other people who've spent 1 percent of their lives doing wrong and 99 percent doing right, but suddenly that 1 percent of their lives becomes 90 percent. This is real life punishment to people with a conscience," Kravit said.