Late Thursday afternoon, federal judge Thomas B. Russell sentenced Jim Scott to 12 months and one day in the federal penitentiary.
That's just three months shy of the 15-month federal guideline for this crime, despite the fact that Western President Gary Ransdell, former "Boys and Girls Club" Executive-Director Stan England, Scotty's former business partners Mike Murphy and Lawrence White, and former Mayor Johnny Webb, gave glowing testimonies of Scotty's generosity and character.
They also explained how devastating this would be on Scotty's son, 46-year-old Tony Scott, who suffers brain damage from a 1980 auto accident.
Attorney Scott Cox says Scott will report to prison in six to eight weeks, and serve eight to ten months. Last March Scott pleaded guilty to deducting more than $900,000 as business expenses that he used to build a new home.
Cox says they're hoping Scotty can serve his time at the federal prison camp in Manchester.
Official U.S. Dept. of Justice News Release:
Former Road Contractor Sentenced for Tax Fraud
Bowling Green man required to pay approximately $3 million in taxes, penalties, and interest.
David L. Huber, United States Attorney for the Western District of Kentucky, announced today that JAMES D. SCOTT, age 68, of Bowling Green, Kentucky, former owner of Scotty’s Paving and Contracting, was sentenced in United States District Court, Bowling Green, Kentucky, for tax fraud.
Thomas B. Russell, Judge, United States District Court, sentenced Scott to serve one year and one day in prison, followed by one year of supervised release. Prior to the sentencing hearing, the defendant paid approximately $3,000,000 in back taxes, penalties and interest due and owing to the IRS arising out of the matters charged in the indictment and related matters.
Scott pled guilty in March 2006 to defrauding the Internal Revenue Service for the years 1995 through 1996 by filing tax returns for those years which fraudulently under reported his gross income as a result of improper deductions he took for expenses associated with the construction of his personal residence. By the terms of his plea agreement, Scott admitted to under reporting his gross earnings in tax returns filed with the IRS in excess of $986,000.00 as a result of the fraudulent deductions described above. Scott, while building a private residence in a gated subdivision called Rivergreen in Bowling Green, ran expenses associated with building his house through his paving company and these business deductions lowered his gross income for those years by $986,000.
The provisions of the plea agreement required Scott to pay $1.2 million in taxes, penalties, and interest to the IRS which Scott paid in full in February, 2006.
This case was prosecuted by Assistant United States Attorney Jim Lesousky, and it was investigated by the Internal Revenue Service Criminal Investigation.