Ex-U.S. Tax Court Judge, Husband Indicted in Tax Evasion Case

 

As reported by the Associates Press, NBC and other news organizations a former U.S. Tax Court judge and her husband have been indicted on charges in Minnesota that they conspired to evade at least $400,000 in federal taxes, the U.S. Attorney's office said Monday.

Diane Kroupa, 60, and her 62-year-old husband, Robert Fackler, are charged with conspiracy to defraud the United States, tax evasion, making and subscribing false tax returns and obstruction of an IRS audit, U.S. Attorney Andrew Luger announced.

Kroupa was appointed to a 15-year term as a tax court judge by then-President George W. Bush in 2003 and retired in 2014. According to the charges, between 2004 and 2010, the Minnetonka couple understated their taxable income by about $1 million and the amount they owed in taxes by at least $400,000.

Federal prosecutors accuse Kroupa and Fackler of fraudulently deducting at least $500,000 of personal expenses they listed as expenses at Fackler's consulting firm, and another $450,000 in purported business costs for which clients had reimbursed Fackler.

The charges allege expenses labeled as business costs for Fackler's Grassroots Consulting instead went toward Pilates classes, wine club fees, Chinese tutoring and airline flights. Kroupa also failed to report about $44,520 that she received from a 2010 land sale in South Dakota, instead claiming it was part of an unrelated inheritance, court documents allege.

Richard Weber, chief of IRS Criminal Investigation, said the allegations were "particularly troubling" because as a tax court judge, Kroupa dealt regularly with tax cheats.

"Reporting personal expenses as business expenses on your tax returns is not tolerated, regardless of your job or position," Weber said in the statement.