A Salt Lake businessman at the center of a $12.7 million banking scandal was sentenced to a year in prison Wednesday in an unrelated tax fraud case.
Steven C. Christensen, who up until summer oeprated a high-flying employee leasing company called Paragon Business Solutions of America, was also ordered to pay the government more than $309,000 he owes in back taxes."This in my opinion is an aggravated case," said U.S. District Senior Judge David K. Winder as he imposed the maximum sentence allowed under federal guidelines. "That tax loss was just enormous."
Moreover, at the same time that Christensen was dodging taxes, he maintained a lavish lifestyle on an income that in recent years topped $25,000 a month, Winder said.
In fact, before Christensen and his wife Diane, who was not charged in connection with the tax fraud, surrendered most of their assets to settle a civil fraud lawsuit filed by First Utah Bank, they had a net worth of more than $1.5 million, the judge added.
Christensen was charged on July 10 with felony attempted tax evasion for failing to file personal and corporate tax returns in 1992, though Winder noted, "This man hasn't filed a tax return since 1991." At the time of the tax offense, Christensen was operating another employee leasing company, Wasatch Services Inc.
He pleaded guilty to the charge on Sept. 2 after federal prosecutors agreed not to bring additional charges against him and to recommend that the judge apply 1992 sentencing guidelines rather than the more severe 1997-98 guidelines.
While accepting the agreement, Winder declined to impose a sentence at the lower end of the guidelines or allow Christensen to serve part of the sentence in home confinement.
Christensen's attorney, Max D. Wheeler, had asked for leniency, arguing that his client had accepted responsibility for the offense and was "destitute" as a result of the civil case in state court.
Wheeler was referring to a lawsuit that First Utah Bank filed against the Christensens and their Paragon Business Solutions of America companies after discovering $12.7 million missing from bank funds. The lawsuit alleged that the Christensen's had essentially engaged in a massive and ongoing overdraft scheme involving unauthorized electronic withdrawals from the bank's operations accounts.
The Christensens settled the 3rd District Court lawsuit on Oct. 26 by agreeing to surrender just about everything they owned. At Wednesday's sentencing hearing, Winder read from a pre-sentence report that indicated the Christensen's net worth was down to less than $20,000.