A man was sentenced in federal court to two years in prison and ordered to pay almost $1 million in restitution to investors and the federal government.
Larry Lough, 58, of West Chester Township, pleaded guilty in February to wire and mail fraud and tax evasion charges.
On Tuesday, Senior U.S. District Court Judge Herman J. Weber ordered Lough to repay $757,751 to 32 Tri E Technologies investors he and now deceased partner John Grinstead defrauded in 2003, according to court records.
Tri E Technologies (TET) was a research and development company that specialized in removing lead from glass. He and Grinstead solicited $2.3 million from investors to fund research and development of TET products. Investment documents, showing TET was turning a profit, were mailed to the investors. The company was actually not doing well, folded, and investors lost their money.
A third man, James Jackson, 68, of Cincinnati, was Lough's accountant. He plead guilty in March to one count of conspiracy to defraud the IRS. He received one day of incarceration, a year of house arrest and another year on court supervision. He was ordered to pay a $3,000 fine.
Jackson helped Lough file false employment and income tax forms in 2005 and 2006. Lough now owes the IRS $145,175 for taxes that were not paid on his own earned income and that of his nine-or-so employees. Lough filed tax returns with the quarterly employment tax returns with the IRS in 2005 and 2006, showing the company paid its employees a total of $124,929 for the two years. In actuality they were paid a total of $882,684.
Records show $109,118 Lough received in income in 2005 was listed as a loan on payroll records instead of income, thus cheating the IRS out of $29,927.
U.S. Attorney Carter M. Stewart warned others not to try what Lough did.
"Individuals who engage in fraud schemes in order to secure money from investors under false pretenses are committing serious crimes," he said. "Perpetrators of fraud schemes such as this will be prosecuted, with a clear message that such offenders act at their own peril."
By Denise G. Callahan - Hamilton JournalNews (MCT)
(c)2012 the Hamilton JournalNews (Hamilton, Ohio)
Visit the Hamilton JournalNews (Hamilton, Ohio) at www.journal-news.com
Distributed by MCT Information Services