TACOMA, Wash.—A federal judge sentenced a former North American Tire Inc. (NAT) employee to 15 months in prison for conspiring to evade more than $2.5 million in federal excise taxes on truck tires. In addition, Douglas Wiseman, 48, of Tacoma, Wash., was sentenced to 5 years of supervised release following his prison term. Mr. Wiseman had pleaded guilty to the conspiracy charges in 1997 as part of an agreement to help federal investigators find other parties involved in the scheme.
During his employment as a salesman with Tacoma, Wash.-based NAT from 1989 to 1993, Mr. Wiseman avoided paying taxes by purchasing truck tires from Canadian dealers and importing them into the U.S. without paying excise taxes, according to court records.
The federal highway excise tax is levied on truck tires sold by the manufacturer, producer or importer for use in the U.S. The tax is not imposed on tires exported out of the U.S.
Mr. Wiseman also used phony shipping documents to fool suppliers into believing the tires were being shipped to Mexico, when they actually were sold in the U.S., according to court documents.
After leaving NAT in 1993, Mr. Wiseman started a new business, Network Tire, in Puyallup, Wash., where he continued to evade excise taxes. He covered up his illegal activity by paying $2 to $5 extra per tire to a third party to obtain permission to list that individual, for whom he purchased a customs stamp, as the importer of record.
Mr. Wiseman also pleaded guilty to aiding others in defrauding U.S. Bank on a $600,000 line of credit. He and his co-conspirators overstated accounts receivable records to draw from the credit line.
Three co-conspirators, who are awaiting sentencing, also have pleaded guilty to tax evasion. Edward Langton, president of North American Tire, pleaded guilty to knowing there was ``a high probability'' truck tires would be resold in the U.S. by customers of NAT, but forwarded export certificates to the company that originally sold the tires to NAT, according to court documents.
Paul Poston Jr., owner of Poston Tire in Memphis, Tenn., pleaded guilty to evading the tax on truck tires he imported from Canada and other countries. He used Network Tire to buy the tires and did not collect or pay the tax, even though he resold the tires within the U.S.
Theodore Barney, owner of Barney Trading Import and Export in Graham, Wash., pleaded guilty to evading more than $550,000 in taxes on tires he imported and resold in the U.S.