Prominent businessman and former Utah Republican Party Chairman Charles W. "Chuck" Akerlow was sentenced Tuesday to a year in prison for his role in a scheme that cost taxpayers $600,000.
With his wife and children weeping quietly at the rear of the courtroom, Akerlow pointed to his accomplishments and pleaded for mercy while prosecutors portrayed him as an unscrupulous tax cheater.U.S. District Judge David K. Winder said Akerlow is "unquestionably a good husband and father" and noted that he had achieved success in the community and in politics. "And, frankly, the sentence would be more harsh if not for that side of the equation."
Akerlow and a business partner, Richard J. Anderson, pleaded guilty Jan. 25 to six misdemeanor counts of failure to file and pay federal excise taxes on diesel fuel sold by his company. Felony charges against them were dropped as part of a plea bargain. Anderson will be sentenced next month.
According to Assistant U.S. Attorney Gordon Campbell, Akerlow directed employees of his companies - Pacific Western Resources and Pacific Western Industries - not to remit to the government excise taxes that were collected in 1983 and 1984.
Akerlow diverted the money to personal use after determining that he could not be held personally liable for the tax debt, Campbell said.
And since the corporation is defunct, no one is liable, which means taxpayers have lost $600,000.
Noting that Akerlow is broke, Winder said he would not impose a fine in addition to the prison term. However, he ordered Akerlow to perform 200 hours of community service. Also, the judge added five years probation to the sentence.
Akerlow said, "I am deeply sorry for this whole mistake, this crime, this whole thing that has happened . . . I can say to you from the bottom of my soul that this mistake I made in 1983-84 was the first and last such mistake of my life."
He said he should have known better, but that at the time, his life was not in focus. "I was a mile wide and an inch deep," he said, adding that he is now concentrating on his family and on a job offer in California, "subject to what happens here."
Akerlow denied that he had conspired with anyone to break the law or that he had tried to place the blame for the violation on others.
But Campbell said Akerlow ignored warnings from his employees that the excise taxes should be paid and that his attitude was "If the IRS shows up, we'll blame the accountant."
The prosecutor also said he was informed Monday that Akerlow had failed to pay the withholding taxes he owed last year for Microsize Inc., his latest business venture. That failure, Campbell said, proves that the previous offense was not an aberration. "It was not inconsistent with his lifestyle. All these things show how Mr. Akerlow does business."
Akerlow, once a multimillionaire and a boy-wonder land developer, served as GOP party head from 1981 to 1985. He was an elector in the 1988 election, casting one of five Utah votes in the Electoral College for President Bush. He was involved in the business failures of the Governor's Plaza Condominiums and the Salt Palace Holiday Inn Hotel.