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Easton Man Sentenced for Tax Evasion

An Easton man was sentenced Friday to 366 days imprisonment for tax evasion. James L. McCarthy, 62, of Adirondack Trail, Easton, was sentenced by U.S. District Judge Ellen Bree Burns in New Haven for not reporting more than $1 million in taxable income.

Court documents and testimony revealed that McCarthy controlled two companies located in Stratford, American Boiler Inc. and Industrial Property Management. AB maintained, repaired and occasionally installed industrial boilers, and IPM maintained the Stratford Army Engine Plant under a contract with the U.S. Army.

From 1999 to 2002, checks received by AB for work it performed were deposited to the IPM checking account, either by McCarthy or at his direction. That income was never recorded in AB's books, nor was it reported on AB's federal corporate tax returns for those years. McCarthy also used checks drawn from the IPM account for personal benefit.

On Aug. 3, McCarthy pleaded guilty to one count of aiding and assisting in the preparation of AB's fraudulent federal tax return for 2000. The return – which was filed Sept. 5, 2001 – showed gross receipts of $1.1 million and taxable income of $30,808.

Burns ordered McCarthy to pay taxes due on both AB income and his personal income in the total amount of $1,202,049.

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