Piper sentenced for embezzlement against carferry. 

September 3, 2020

Piper sentenced for embezzlement against carferry.

By Rob Alway, Editor-in-Chief.

GRAND RAPIDS — Paul Patrick Piper, 58, of Pere Marquette Township, was sentenced today, Thursday, Sept. 3, 2020, in U.S. District Court to 63 to 78 months (5 to 7 years) imprisonment with three years supervised release on charges of felony bank fraud and federal income tax offenses. Piper, who owned Piper Tax and Accounting and served as a Pere Marquette Township trustee, was formally charged with the crimes on Feb. 21, 2020 and pleaded guilty to the two counts on June 1, 2020.

Piper, who had worked for many years as the financial controller for Lake Michigan Carferry and Pere Marquette Shipping, defrauded various financial institutions and LMC in the amount of at least $550,000 by overriding normal accounting systems and writing checks directly to himself and to two of his affiliated company owners on the checks, or used a signature stamp without the authorization of the owners of LMC.

He hid the transactions in the account system by booking the checks to an insurance expense code and by otherwise making false entries to balance company accounts.

Additionally, he filed false personal income tax returns with the Internal Revenue Service because he supposedly knowingly failed to include the income he allegedly stole from LMC, and other income earned from his tax business, Piper Accounting and Taxes, on his federal income tax returns.

“Mr. Piper took advantage of the Car Ferry starting in around 2007 in an effort to maintain a lifestyle for him and his family and support struggling business ventures,” Piper’s attorney, Matthew Borgula of Springstead Bartish Borgula & Lynch wrote in a sentencing memorandum filed last month. 

“As detailed in the pre-sentence report, Mr. Piper wrote checks to himself and then ‘masked’ those checks by manipulating the Car Ferry’s books and records to hide his crime. As a result of stealing money that he did not want to report on his tax returns, Mr. Piper filed a false return underreporting his income. Mr. Piper has never defrauded anyone other than the Car Ferry or the IRS.”

The U.S. Attorney’s office described the case slightly different. 

“Beginning in at least 2007, Defendant began lining his pockets with the hard-earned revenue of the Car Ferry. Specifically, Defendant began masking checks: that is, he would use the company accounting software to make a check payable to himself, print the check, delete evidence that he was the payee, insert the name of one of the company’s legitimate insurance vendors as the payee, and then book the check to an insurance expense code in the general ledger. Additionally, Defendant stole more money form the Car Ferry by writing checks payable to himself or his tax preparation business, Piper Tax & Accounting, for financial and accounting.”

In addition to the prison sentence, Chief U.S. District Judge Robert J. Jonker also ordered that Piper’s attorney and the U.S. district attorney finalize restitution in 30 days. Jonker ordered restitution to be at least $1.7 million to LMC and $363,926 to the IRS. He also ordered a financial penalty of $1.7 million. Piper also turned over his pickup truck, which has been sold, and paid the U.S. Marshal Service $2,000 for the return of his wife’s car. 

The investigation into the charges began in May 2018 when officials from LMC reported Piper’s fraudulent activities to the FBI, according to a memo from Piper’s attorney. “After a relatively short investigation, authorities executed a search warrant at his home and business in September, 2018. Mr. Piper retained the undersigned to represent him and by February, 2019, Mr. Piper sat for an interview at the U.S Attorney’s Office, anticipating that he would accept responsibility for his conduct and later plead guilty to the fraud.”

Bank fraud is a felony punishable by imprisonment up to 30 years along with a fine of $250,000 or twice the gross gain or gross loss resulting from the offense and a mandatory assessment of $100. Filing a false tax return is punishable by up to three years imprisonment and a fine of $250,000 or twice the gross gain or gross loss resulting from the offense, whichever is greater, plus a mandatory assessment of $100. 

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