TACOMA, Wash.—A federal judge has ordered former North American Tire International President Edward R. Langton to pay $20,000 for violating federal excise tax laws. In addition to the fine, Mr. Langton also must serve a 10-month home confinement sentence for knowing there "was a high probability" that NAT employee Douglas Wiseman was evading excise taxes on truck tires, according to court documents.
Mr. Wiseman currently is serving a 15-month prison term for federal excise tax evasion.
>From 1989 to 1993, Mr. Langton was president of Tacoma-based NAT, which was then known as North American Tire Inc. Mr. Wiseman was employed by NAT at that time and devised a scheme in which he purchased truck tires from Canadian dealers and imported them into the U.S. without paying taxes, according to court documents.
Mr. Wiseman informed dealers from whom he bought truck tires that NAT planned to export them to Mexico, but then sold them in the U.S.
In 1993 Mr. Wiseman left NAT to start his own firm, Network Tire, in Puyallup, Wash. He continued his tax evasion scheme by paying a third party $2 to $5 extra per tire to list that individual as the importer of record.
Tires exported from the U.S. are exempt from the tax. The scheme cost the federal government approximately $700,000 in excise taxes.
Although the illegal activity stopped occurring at NAT after Mr. Wiseman's departure, Mr. Langton "looked the other way" during Mr. Wiseman's tenure with the company, said his attorney, David Bukey.
Mr. Langton pleaded guilty to knowing of Mr. Wiseman's illegal activities and to acting with "deliberate disregard" of it in May, according to court documents. His home confinement sentence includes a work release, said Arlen Storm, assistant U.S. attorney for the Western Division of Washington.
Currently manager of NAT, Mr. Langton is a founder of the firm and "is relieved this chapter from his past business practices is behind him," Mr. Bukey said.
"He has learned a lesson for the need of careful supervision of the people who work for him," Mr. Bukey said. "He's accepted responsibility for his mistakes."