MADISON, WIS. – Timothy M. O’Shea, Acting United States Attorney for the Western District of Wisconsin, announced that Leonard Kersten, 55, Wausau, Wisconsin, was sentenced on April 9 by U.S. District Judge William M. Conley to 30 months in federal prison, followed by three years of supervised release, for tax evasion. Kersten pleaded guilty to the charge on January 22, 2021. He was ordered to report to federal prison on May 24, 2021. He was also ordered to pay restitution of $347,979.96 to the Internal Revenue Service.
Kersten evaded taxes by failing to report as income $1.7 million he embezzled from his employer between 2007 and 2017. He used his position as a company accountant to embezzle funds by issuing checks to himself or his spouse. He then altered the company’s accounting records to make it appear that the checks were issued to pay legitimate company suppliers.
Under federal law, even embezzled funds are considered income for tax purposes. Kersten admitted at his guilty plea hearing that he knew the tax returns he filed were false because he knew the funds he embezzled were supposed to be included as income. By willingly failing to report the additional embezzled income on his tax returns, Kersten and his spouse paid approximately $350,000 less in taxes than they should have. This created a tax due and owing under federal tax law.
The charges against Kersten were the result of an investigation conducted by IRS Criminal Investigation. The United States also recognizes the assistance of the Office of the U.S. Trustee for the Western District of Wisconsin. The prosecution of the case has been handled by Assistant U.S. Attorney Meredith P. Duchemin.