Ohio Insurance Salesman Pleads Guilty to Tax Obstruction and Currency Structuring

Friday, October 26, 2012

Ohio Insurance Salesman Pleads Guilty to Tax Obstruction and Currency Structuring

William R. Herder of Bellville, Ohio, pleaded guilty yesterday to corruptly endeavoring to obstruct the administration of the tax laws and currency structuring, Assistant Attorney General for the Justice Department's Tax Division Kathryn Keneally, U.S. Attorney for the Northern District of Ohio Stephen M. Dettelbach and Special Agent in Charge, Internal Revenue Service (IRS) - Criminal Investigation, Cincinnati Field Office, Darryl K. Williams announced. Herder was previously indicted in June of this year.

According to documents filed in the case, Herder, an independent insurance salesman for Aflac Inc., failed to file timely and accurate income tax returns for the years 2000-2009 despite earning substantial insurance commissions and receiving warnings and notices from the IRS. Herder filed returns for the years 2010 and 2011 on which he reported that he owed taxes to the government, but failed to pay the almost $50,000 in taxes that he owed for those years.

According to the plea agreement and indictment filed in this case, to prevent the IRS from collecting his unpaid taxes, Herder attempted to conceal his assets and income. In 2004, Herder formed two entities in Nevada--one for the purpose of hiding his automobiles and another for the purpose of hiding his insurance business. Herder also began converting his insurance commission checks to cash and paying his expenses in cash to prevent the IRS from collecting his taxes from his bank account.

The plea agreement and indictment filed in this case also stated that Herder submitted numerous obstructive letters and documents to the IRS, Aflac, and his credit union in an effort to prevent the IRS from assessing and collecting his taxes. In these letters, Herder falsely claimed, among other things, that the tax laws were not applicable to him. In 2005, Herder attempted to pay his taxes with a fake financial instrument called an "International Bill of Exchange."

Earlier this year, William A. Herder was found guilty at trial of tax evasion, corruptly endeavoring to obstruct the administration of the tax laws and five counts of failing to file tax returns and was sentenced to 37 months in prison. According to public records filed in that case, William A. Herder, who also sold insurance for Aflac Inc. as an independent contractor, is William R. Herder's father.

The case was investigated by Special Agents of IRS - Criminal Investigation and is being prosecuted by Tax Division Trial Attorneys Melissa S. Siskind and Jeffrey A. McLellan.

12-1293

Tax Division