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Friday, Nov 28, 2014

Prominent Hillsborough businessman gets 10 years for tax evasion

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TAMPA — John D. Stanton III stalled an Internal Revenue Service audit for four years, promising he would submit corporate tax returns for his company while secretly diverting tens of millions of dollars to himself.

The deception caught up to him Thursday, when a federal judge sentenced him to 10 years in prison for tax evasion.

“You defrauded the government out of millions of dollars. Your purposely evaded the IRS,” U.S. District Judge Virginia M. Hernandez Covington told the 64-year-old Stanton. “You’re a very intelligent and shrewd man and you engaged in a steady, ongoing pattern of criminal conduct.”

Thursday’s sentencing hearing gave lawyers an opportunity to go over the details of Stanton’s case but also featured the strained relationships between Stanton’s relatives.

The family drama emerged when a letter by ex-wife Susan Stanton was read aloud.

In the letter, Stanton called her ex-husband “devious” and said he should be given the maximum prison sentence allowed.

John Stanton III fled Tampa in December 2011, the letter said. An arrest warrant on a contempt of court charge was issued, stemming from a divorce case where Stanton defied an order to pay more than $6 million to his ex-wife.

“He fled and stayed in $240-a-night hotels,” Susan Stanton wrote. While he was on the run, John Stanton III fathered a child with a 32-year-old woman, the letter said.

“He has created a tangled web” of shell companies to hide money, the letter said. “He will not pay restitution. He will leave the country. He has enough money hidden that he could live a nice life. He has shown no remorse. His only remorse is that he got caught.”

Stanton’s son, John Stanton IV, spoke on his father’s behalf, saying his dad’s military record should earn him some leniency. John Stanton III fought in Vietnam and was awarded a Purple Heart and Bronze Star for his service, his son said, and did “a lot of good” over the years, donating to charities and schools.

The elder Stanton made “an error in judgement” when he failed to file taxes for Cast-Crete, the company Stanton III co-owned, John Stanton IV said.

Covington said an error in judgement shouldn’t have lasted for years and that Stanton’s generosity shouldn’t have come from “money that belongs to the U.S. government in the form of taxes.”

“With the pattern you engaged in, Cast-Crete was almost put out of business,” Covington told the defendant.

Stanton III, who was also ordered to pay $37 million in restitution, declined to speak at the hearing.

He was once the co-owner of Cast-Crete Corp. of Seffner, one of the nation’s biggest manufacturers of precast concrete materials. Between 2005 and 2007, the company made a profit of $108 million and owed taxes amounting to $37 million, which was never paid because tax returns for those years were never filed.

Stanton also didn’t file tax returns on his income or for another company he had set up during that time, prosecutors said.

He was siphoning off millions of dollars from Cast-Crete during those three years, according to court documents, paying himself or his shell company $12 million in 2005, $22 million in 2006 and $9 million in 2007.

“His plan was to drive the corporation into bankruptcy and clean up the tax mess in bankruptcy court,” U.S. Attorney Robert Monk said.

Stanton, who has a masters of business administration degree and was a certified public accountant, “made a pretense of cooperating” with the IRS audit “but in fact he stalled and impeded the agent’s ability to get at the truth,” court documents said.

Stanton created fake promissory notes, board resolutions and other documents to hide the deceit, prosecutors said. Stanton also tried to place the blame on Cast-Crete co-owner Ralph Hughes, a conservative power broker who died in 2008, Monk said.

The IRS said Stanton eventually owed a total of $60 million in taxes.

In 2011, Stanton left Tampa after refusing to pay Susan Stanton the $6 million the court said he owed her. John Stanton III was on the run for nine months, evading arrest until September 2012, when he was nabbed at a Fairfield Inn in Orlando.

Prosecutors said Stanton had been living out of various hotels, including a Hilton in South Florida where he stayed for three months, registered under a different name, running up a $22,000 bill. When he was arrested, Stanton said he was broke; prosecutors said they believe Stanton has hidden his money, perhaps millions of dollars.

“Maybe there’s money hidden in other countries,” Covington told Stanton after she sentenced him. “I don’t know. Today, I’m giving you the benefit of the doubt.”

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