The co-owner of an Iowa injection molder has pleaded guilty to two counts of filing false tax returns for diverting more than $500,000 from his business and failing to report it as income.
Thomas Dillavou, an owner of Plastic Injection Molders Inc. of Fertile, Iowa, pleaded guilty Jan. 24 in U.S. District Court in Sioux City, Iowa, according to a Jan. 29 news release from the U.S. Attorney's Office.
Dillavou diverted $598,172 from his company between 1997 and 2000 and used the money to make personal investments overseas, to pay for repairs and remodeling of his home, to make personal loan payments and to cover vacation expenses, according to the U.S. Attorney's office.
In a telephone interview, Dillavou called the court action ``an extremely unfortunate situation'' and said he had filed taxes in the way he was told to file, but was told later that they were not filed properly.
In the plea agreement, he admitted to failing to report the funds as income on his tax returns for those years. He originally was charged with four counts of filing false tax returns and one count of bank fraud, but two of the tax counts and the bank fraud charge are to be dismissed at sentencing April 23.
Each count carries a maximum sentence of three years in prison, a $250,000 fine, a $100 special assessment and three years of supervised release after prison. He also may be required to pay the tax due from the unreported income as well as interest and civil penalties.
The 15-employee custom injection molding shop is continuing normal operations, Dillavou said. PMI opened in 1986.