Former president and employee of auto parts manufacturing company sentenced for conspiring to defraud the United States

 

Date: April 7, 2022

Contact: newsroom@ci.irs.gov

The former president and a former employee of H/A Industries, Inc., located in Sterling Heights, Michigan, were sentenced today on charges they conspired to defraud the United States by failing to report income on their federal tax returns, United States Attorney Dawn N. Ison announced. They pleaded guilty to the charges in November 2021 before U.S. District Judge Stephen J. Murphy, III.

Ison was joined in the announcement by Sarah Kull, Special Agent in Charge of the Internal Revenue Service Criminal Investigation Division.

Sentenced by Judge Murphy were Gordon J. Pesola, of Oakland Township, and Kenneth R. Sanborn, of Grosse Pointe Park. Pesola received a sentence of 21 months in prison and a $10,000 fine and was ordered to pay restitution to the United States in the amount of $1,004,000. Sanborn received a sentence of one year of home confinement and a $10,000 fine and was ordered to pay restitution to the United States in the amount of $1,004,000, jointly and severally with Pesola.

According to court records, Pesola was the president of H/A Industries, Inc., a company that designed and assembled systems used to manufacture component parts, mostly for the automotive industry. Sanborn was an employee of H/A Industries. From 2009 through 2013, Pesola transferred H/A Industries funds to himself, Sanborn, and a third conspirator through the use of shell companies, most of which were established in the British Virgin Islands. By using the shell companies, the defendants were able to make the transfer of H/A Industries funds appear to be payments by H/A Industries to its suppliers and contractors when in fact they used the funds for their own personal benefit and the personal benefit of their families. Neither Pesola nor Sanborn reported that income on their federal income tax returns. The total income not reported to the IRS by the Pesola, Sanborn, and the third conspirator was approximately $3,375,000. The income tax loss to the government was approximately $1,004,000. The third conspirator passed away in 2015.

The investigation of this case was conducted by the Internal Revenue Service – Criminal Investigation, and it was prosecuted by Assistant U.S. Attorney Stephen Hiyama.