Minnesota boat dealer pleads guilty to US$3.2m tax fraud

A Minnesota marine dealer has entered a guilty plea in Washington County District Court to defrauding the state out of approximately US$3.2m in sales tax, penalties and interest.

59-year-old Jeffery McKenzie, owner of 61 Marine and Sports, admitted to three felony counts of “knowingly aiding in the preparation of tax returns that were fraudulent or false,” according to the West Central Tribune.

A preliminary investigation in August of last year found that a sales tax audit had been initiated on the business by the Minnesota Department of Revenue, leading to a criminal investigation by the agency and the Washington County Sheriff’s Office.

According to the criminal complaint, McKenzie was charged with providing the monthly sales-tax collection information to the business accountant who filed the sales tax returns. The complaint alleges that McKenzie knowingly under-reported the monthly taxable sales to the accountant, who then filed the false sales tax returns.

The complaint states that computer files, sales tax returns and paper documentation seized during the execution of several search warrants showed the business under-remitted its monthly sales tax in 59 periods from January 2013 through September 2018.

61 Marine and Sports, which opened in August 1997, sells boats, boat motors, ATVs, snowmobiles and parts and accessories.

McKenzie is scheduled to be sentenced on 2 December.