Date: January 27, 2020
Two West Virginian business owners were sentenced to prison today for conspiring to defraud the United States of employment and income taxes. Russell Rucker was sentenced to serve 18 months in prison, and his wife, Karen Rucker, was sentenced to six months in prison.
According to court documents and statements made in court, the Ruckers operated Rucker, Billups and Fowler Inc. (RBF), an insurance agency located in Huntington, West Virginia. Russell Rucker was the president of RBF and since approximately late 2013, Karen Rucker served as a financial officer. Between September 2015 and September 2018, the Ruckers withheld approximately $143,226 in payroll taxes from the wages of RBF's employees, which they did not pay over to the Internal Revenue Service (IRS). Instead, the Ruckers diverted portions of the withheld funds for their own personal benefit. For instance, from 2014 through 2016 the Ruckers continued to pay themselves over $500,000 in salary. In response to IRS collection efforts and in an attempt to conceal funds from the IRS, the Ruckers deposited money into the bank account of another individual. The Ruckers also attempted to evade IRS levies by using a series of bank accounts that they did not disclose to the IRS and by paying many of their bills in cash, including their mortgage.
In addition, the Ruckers sought to evade payment of Russell Rucker's 2001, 2002, and 2005 individual income taxes by disguising paychecks issued to Russell Rucker as non-taxable "note proceeds," and they failed to file their individual income tax returns and RBF's corporate returns for 2014 through 2017. The intended tax loss caused to the IRS by their conduct is more than $250,000.
In addition to the term of imprisonment, U.S. District Robert Chamber ordered the Ruckers to each serve three years of supervised release and to pay approximately $258,137 in restitution to the United States.
This case was investigated by special agents of IRS-Criminal Investigation and prosecuted by Trial Attorneys Alexander Effendi and Lauren Archer of the Tax Division.