Paul Pogue – Texan Guilty of Tax Evasion – it is that time of year!

Pleading guilty, Paul Pogue of McKinney, Texas, admitted that he under reported his income by nearly 1/2 million dollars.

Pogue, stated, in court, that he was employed as a consultant for a construction company, acknowledged in court that he stated on his 2003 tax return that he only had taxable income of $4,594,052 for that year, when he knew he had taxable income of $5,588,249.70.  Pogue admitted in court documents that he also knowingly understated his taxable income on his 2004 and 2005 individual tax returns.  Pogue admitted reporting only $3,111,715 in taxable income for 2004, when he knew his taxable income was $3,686,784.40, and reporting only $2,908,235 in taxable income for 2005, when he knew he actually had $3,030,684.70 in taxable income that year.  Pogue acknowledged that the total tax loss resulting from his additional, unreported income was $473,680.53.

As you can imagine, failing to report income causes ire in the hallowed halls of the IRS.  Pogue faces up to three years in prison and likely repayment of the tax on the income he admitted was under reported.

UPDATE ON SENTENCING:  http://chuckgallagher.wordpress.com/2010/08/27/paul-pogue-prison-sentencing-set-for-august-27th-outcome-probation-or-prison/

EXPANDED DISCUSSION:

Comments were made which have since been retracted.  I respect the poster’s decision to retract, however, I will offer some comments relative to the posters comments while removing them from this blog:

A comment was made that inferred that Mr. Pogue did not do business with the government:  Doing business with the US Government has no impact on whether Mr. Pogue is guilty of tax evasion (or under reporting of taxable income).  All US Citizens are expected to report all income from all sources unless specifically exempt from tax per the US tax code.

Mr. Pogue’s guilty plea has a direct impact on his family and if that plea puts him in federal prison, then one could conclude that his workers may be out of a job.  The REALITY CHECK is that if ALL income had been reported, then we would not be discussing Mr. Pogue.

Only as a point of reference.  While I am not proud of this, I spent time in federal prison for tax evasion.  I, too, was a man of faith, in fact, I held the position of Director of Music in my church, deacon and was a community leader – sitting on several boards.  It’s funny in life, but it seems that anyone can make mistakes and it would seem that if what Paul plead guilty to is true – then he made a mistake that will cost him.

As mentioned above the specific comments related to Mr. Pogue’s CPA have been removed.  However, for anyone who pleads guilty of under reporting income, there will be questions raised as to whether the accountant was complicit in the evasion.  Notice, several of my blog entries reflect tax preparers being prosecuted for willful failure to properly report a clients income.  In this case, if Mr. Pogue was providing inaccurate information to his CPA, that would exonerate the accounting firm.  If not, well???

Now…with what little I know about the federal system, if his CPA was guilty of a tax crime, then he would be a bigger target than Paul.  I am reasonably certain that if the government feels that Paul’s CPA is somehow complicit they are looking that way.  I wonder, however, why the finger is being pointed at the CPA?  What did the CPA advise Paul that would have caused him (Mr. Pogue) to plead guilty to nearly 1/2 million of under reported income?  This is the part that is confusing.

Two comments: (1) Paul is not being put on trial.  He avoided that by pleading guilty.  (2) Regardless of his character or kindness, Paul plead GUILTY.  And, unless he is not, one fact remains – HE PLEAD GUILTY.  Guilt happens to kind men, men with character, men who otherwise by their actions deserve better.

EVERY CHOICE HAS A CONSEQUENCE.  It would seem that Paul made a choice that violated federal law – admitted it – and now will face the consequence.  For his sake and that of his family I hope he has a great attorney who can call upon the compassion of the court to recognize all that Mr. Higgins has stated and seek a minimal sentence for Mr. Pogue.

REALITY CHECK – The federal government has one method that is quite effective to encourage folks to obey the tax laws … FEAR.  Mr. Pogue likely reduced his sentence by making it easy for the government to convict.  But, his guilty plea and sentencing to follow make it yet another example of how the system works.  If you don’t file, don’t pay or don’t work to accurately reflect your taxable income – expect a nasty outcome.

COMMENTS WELCOME!

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37 Responses to Paul Pogue – Texan Guilty of Tax Evasion – it is that time of year!

  1. Friend of Paul Pogue says:

    This is a sad situation. I’ve known Paul for 25 years. He is a good man and a ver decent human being. The flag that likely got the IRS’s attention was the fact that Paul is known as a man that gives huge amounts of money to charities. From a personal side, I feel for Paul. From a business side, I would say that (1) report all of your income (2) know that your charitable giving can be a red flag to the IRS.

  2. To all…I do not pass judgment on Paul. I, too, (not proud of this) served time in federal prison for tax evasion. I know what Paul faces and have experienced incarceration as a result of not paying taxes on ALL monies.

    It is the duty of the court to look at the crime (in this case he admitted that he didn’t report all his income) and pass judgment. As much as I’m sure many won’t want to hear, but there is a strong likelihood that a prison sentence of some amount will be handed down.

    The government works like this – we pay our taxes based on a system of voluntary compliance…if putting Paul in prison for a short time…get’s people’s attention and thereby causes them to more accurately report and pay – then the government has accomplished its objective.

    I am sorry that Paul and his family are having to go through this.

  3. Jim made the statement about Paul doing business with the gov’t due to so many on these forums saying that he was doing business with the gov’t and cheating them out of taxes at the same time. That’s not true. He doesn’t do business with the federal gov’t. Paul has built a lot of schools. As far as I know, he didn’t plead guilty for not paying his school taxes.

    These forums are generally not chock full of thinking people. Nor is the public in general.

    Let’s add up the numbers.

    Paul made around $12,305,717 during these years. He has admittedly not paid taxes on an additional $1.7 million. The gov’t says that adds up to around $473,000. That’s roughly 28 percent of what was not reported.

    Now, any rational business mind (that can add, subtract, divide and multiply) would see, Paul Pogue PAID almost $3.5 million in taxes during this time.

    The gov’t is out the expense of investigating him and prosecuting him. God only knows how much they spent to do that.

    If the gov’t makes him do time for this, then he’s taken out of circulation (and business), so he will be paying how much in taxes? Ahhhh….let’s see. Zero! Nada! Zilch! So, the gov’t loses a pile of money MORE!

    Now, let’s see. The gov’t spends thousands in incarcerating him.

    How can any of this make any sense? What they are going to do, Chuck, is punish this man for achieving his dreams. I know Paul. He went from near nothing to where he is.

    Could this be why all the moronic behavior of the gov’t has gotten us into the trillions of dollars of debt that they have put us in? Could this be why they would run the biggest Ponzi scheme in history (called the Social Security Administration)?

    Come on. Surely we can at least be rational about this. I’m not saying that he shouldn’t have to pay his taxes. He should and I am confident that he will pay (with exorbitant interest and penalties). BUT, that SHOULD be ALL! Just work the numbers and put a little bit of thought to it.

    • Having been there allow me to share a different perspective…a perspective that I have personally experienced. The government has one mechanism to enforce the tax laws – FEAR! Paul, I am sure, did everything you and others have said. He is a kind, decent man, who gave substantial monies away and made others lives better. But, if the Govt. allowed him to walk free with just a slap on the wrist for not obeying the law there would be NO FEAR. Others who disagreed with the law would then do the same – not report all their income.

      So…GOVERNMENT OBJECTIVE – strongly encourage COMPLIANCE by showing that even good men face the consequences of their choices. Take Wesley Snipes, who failed to file for three years…he was sentenced to three years in prison even though he’s paid his back taxes. Fair – MAKES NO DIFFERENCE – prison is a deterrent and IF Paul is sentenced to prison he will serve as a message to others.

      I agree that he should pay up – pay penalties and interest – and walk. But, again from personal experience – PRISON instills fear in others and promotes compliance. The Govt. could care less about the jobs he creates or good he does. To them (Govt.) his example has a far greater impact on compliance and others will fill his shoes in job creation and giving.

      HERE’S THE BIG REALITY CHECK – Had Paul fought this – the Govt. would have come at him with all they have and his punishment would have been greater. As it stands, I would predict that he will be sentenced to 1 year to 18 months in federal prison with three years probation following. And as a side note, prison is a business and all businesses have to have inventory. An INMATE is inventory…so unless the Govt. wishes to contract, the reality is Paul is just the newest potential piece of inventory into a new business system.

  4. Chuck, it is a scary system. The gov’t continues to live off of trillions of dollars that do not exist and run up a debt that they’ll never repay. The general public hears about a case like this one and, because of their own lack of living out their potential (as Paul has done) and having the guts to pursue their dreams and opportunities (as Paul has done), they do exactly what Big Brother U.S. Govt. wants. They hate a guy like Paul and defend a very screwed up government. Its insane.

  5. Steve Hackworth says:

    I have had the privilege and pleasure to both work for and know Paul Pogue. Let me state that he is one of the fairest people I have ever known. I have seen first hand how he treats and deals with other people. He has obviously make a mistake and I am sure no one regrets it more than he does. Let him pay what he owes and move on with his life. Sentence him to community service in lieu of incarcerating him. Put his knowledge and skills to work helping people, which he loves to do anyway.

  6. Robert Lane says:

    I too have had working relationships with Paul and Pogue Construction. I will agree with Steve on most of the feeling about Paul, however I have seen him as a Sub working with him on jobs. Paul is a very crude business man that can be very harsh on business deals and makes his subs walk the line on every issue. In my view Paul is too smart of a business man for this to be a “mistake”. I also think that allowing people just walk when they break the law is simply not justice to tax payers. His company takes tax payers bond money, makes money off of that money and then he didnt pay his taxes.

  7. R says:

    This is the tip of the iceberg for Paul, why do you think he turned the business over to his son.

  8. Michael Murphy says:

    Construction is done by contract law. General Contractors must tote the line in doing business with the government, school districts, etc. Everyone totes the line. If you are a knowledgable and professional subcontractor, you have no problem with that.

    • Robert Lane says:

      Taxes are paid according to Tax Law. General citizens tote the line by pay taxes so that the government, schools districts, etc can be built. If you are an honest and reasonable citizen you have no problem with paying your taxes or go to jail.

  9. T says:

    WE AGREE WITH ROBERT LANE, AS A SUB HE DID NOT CARE IF YOU MADE ANYTHING, HE WOULD CUT YOUR THROAT AND YOU WOULD END UP WITH NOTHING, ESPECIALLY IF THEY DECIDED THEY DIDN’T HAVE TO PAY …. ALOT OF PEOPLE DID TRUST HIM AS A CHRISTIAN, BUT I GUESS THEY DONT DO BUSINESS WITH THE LORD’S CONVICTIONS OF THE LAW…

  10. tim thompson says:

    I worked for jc millwork in princeton tx and was let go for a health reason,when i contacted p p about a fellon super. at jc they only told jc about it and sent a lawyer letter to me. hmmm

  11. who am I ? says:

    I’m sorry you have to go to jail and now I have to find a new BFF to fly me around in their plane maybe Benny will stil have his jet after hi wife divorces him. You guys need to stop screwing up or i’m gonna have to fly commercial again with all the common folk that should be washin my feet. DAMNIT Paul!!!! DAMNIT Benny!!!

  12. Friend says:

    Paul is not going to jail. Who told you that? God is in control of Paul’s destiny and presently that has been flying Dr’s to Haiti.

  13. Bob Lane says:

    I have not heard what ever happen in this case. Does anyone know what the courts have done or when Mr Pogue will get his court date.

  14. Surprised At You says:

    Chuck,

    I’m really surprised at your posting about this story. Being a Christian yourself as well as having been through a similar situation, I’m dumbfounded that you would be a party to “shout” this story from the rooftops. What happened to allowing the Lord to take care of the situation without any help from people like you?

    Paul has pleaded guilty regardless of all the circumstances that led to this. I don’t see any benefit in you posting this story. I know, you’ll say its public info and you’re just “reporting the news.” That doesn’t justify your actions.

    It’s really ironic that you are now a “consultant” or “speaker” on ethics but you can’t seem to find restraint in your own will to exhibit moral decency by not providing more fuel to the fire.

    The only reason I can see for you to “highlight” this story is to sell your “services” by supposedly taking the moral higher road and hiding behind the “I’ve been there” façade. You’ve “been there” is no excuse. I guess your time in prison just made you a craftier thief. This time you steal and rob humanity of its attempt to live a decent life by promoting stories of this nature. All it does is give more ammunition to the devil and you’ve allowed yourself to be used by him.

    Posting these types of stories does no one any good. It’s a form of implied marketing that you’re hoping would drive some business to your organization. Like they say in politics…follow the money. It seems obvious you’ve given up on allowing the Holy Spirit to guide your conscience on making wise choices. Do you need to drum up business that bad? I’m more saddened for your soul as you will have to answer to the Lord one day for your actions.

    In the future, think with a heart of God before you post trash found in other “landfills”. Remember, you or I could be one mistake away from having our lives turned upside down and find ourselves in situations like Paul. Don’t take glory in someone else’s folly. You might be next.

    Signed,

    Surprised

    • Surprised…thank you for your comments. I find it interesting however that you equate being a “Christian” to being silent when a transgression of the law occurs. As a nation under God…we have laws and both Paul and I broke those laws. In fact, motivation to uphold the law is founded on the knowledge that breaking the law has consequences. I broke the law and experienced the consequences. The same is true for Paul Pogue. But, you say, “Posting these types of stories does no one any good.” I disagree. When people see that transgressions have consequences – real consequences – some STOP and THINK before making the same choice. In fact, posting a story like this serves as a warning and proves to be a deterrent to committing these crimes.

      It is a fact that when Wesley Snipes was convicted and sentenced to prison for tax crimes the incidence of those crimes decreased. On the other hand, if that had received no press…then folks would equate no visible consequence to the crime and be encouraged to commit similar crimes.

      Paul Pogue committed a crime and it states in the Bible that you reap what you sow. Being exposed in order to prevent others from replicating the crime is a small price compared to Paul’s time in prison.

      I do find it quite interesting that you, touting Christianity, are quick to judge. Didn’t the Bible say something about not judging…? But you say, “I guess your time in prison just made you a craftier thief.” Surprised…you know not of what you speak! Paul Pogue robbed himself of the privilege of living a decent life by the choices he made. I did the same. Here’s the reality…both of us can use our experience to help others to see the redemptive value that God can bring to our lives and how we can be a voice to share with others the real truth that – every choice has a consequence.

      God bless you and I hope that you will take some reflective time to see how the acknowledgment of wrong can help others make right decisions.

      • Surprised says:

        Chuck,

        Thanks for the reply. I agree there are consequences for our actions. You faced it and so will Paul. Being a Christian doesn’t mean that you have to “hide” any wrong doings but you do have a responsibility of how anothers discretions are handled. The book of James teaches us this.

        You stated that as a Christian we are “not to judge.” You are mistaken in this interpretation. To love someone or have compassion about something requires an element of judgement. You look at a person, understand all their good and bad and decide whether you love them enough to be with them. This is a judgement call. To have compassion on a situation means to state “this situation is wrong” (a judgement call) and decide to take some action about it. Judgement in the passage you refer to is around the context of hypocritical judgements. That my friend is wrong, and Jesus makes that very clear.

        The fact that Paul’s situation is now in the courts HAS taken the correct course of action. That IS the consequences to his actions. My point is that you don’t echo the story anymore than what has been reported. You are not a reporter, investigator or law enforcement agency that has an obligation to publish a fact. Being in the business of teaching ethics and deriving your livelihood from these speaking engagements easily highlights the fact that publishing these type of stories only provides “reasons” why someone needs to hire your organization…thus my reference to implied marketing.

        Chuck, I’m not saying your services are not needed or important. I’m saying that you don’t need to stoop down to these levels to present your services. God will provide all that you need by taking a higher moral road.

        Be blessed,
        Surprised

      • Surprises…I suppose we will respectfully agree to disagree. In this day and age, bloggers are the modern day reporters not finding their bias from paid main stream media. That said, the whole issue behind Paul is, in large part, similar to the main issue in mine. Paul is, no doubt, a good man. Yet, he, like I, failed when it came to compliance with the tax law. Why did I report this – simple – to identify for others the statement in Galatians – you do reap what you sow. Perhaps Paul and my example can be a lesson to others to render unto Caesar what is Caesar’s.

        I’m sure Paul appreciates your support and knowing what he and his family is going through I hope that they can find peace in the midst of the storm they are experiencing.

      • Bob Lane says:

        Any update to the case?

  15. Knows how the System works says:

    The point of the entire matter is, if the Feds and the DOJ want you, they will get you. They will put enough pressure on you and your family and your business to get you to capitulate and plead out.

    How many of our members of Congress have done the same thing? How many members of our federal administration have done the same thing?

    There is not equal law or equal justice for all. For Mr. Pogue, his acts are treated as malevolent and felonious. For Tim Geithner and Charley Rangel, it was a mere “oversight” or “accounting error”.

  16. Michael Murphy says:

    Justice has been served. Mr. Pogue received 3 years probation today in court. That’s the end of that story!

  17. Jack Shelby says:

    I caught wind today that Mr Pogue has new problems with the IRS. If anyone has new info please post.

  18. Integrity says:

    Not true. He is upstanding citizen and has been found not guilty , but is doing 1000 hours community service to suffice the IRS. This man has done more for others than anyone I know. See what our government does with $14 trillion in debt which has doubled from $7 trillion since Obama took office. This file needs to be closed and let Paul move on with his life. Paul has taken care of the debt he owed to IRS plus penalties so what’s the problem?

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  20. Paythepiper says:

    Wether it is true or false gossip is a sin and there will be a price to pay

    http://www.heavensinspirations.com/word-gossip.html

    Gossiping is bearing false witness, and that brings the death penalty

    http://www.towards-success.com/dejnarde_files/bible_study_gossip.htm

    • Hum…February 24, 2010 – PLANO, Texas – U.S. Attorney John M. Bales announced today that a McKinney, Texas man has pleaded guilty to federal income tax violations in the Eastern District of Texas.

      Paul Pogue pleaded guilty to making false statements on his federal income tax returns today before U.S. Magistrate Judge Don D. Bush.

      According to information presented in court, Pogue, who stated he was employed as a consultant for a construction company, acknowledged in court that he stated on his 2003 tax return that he only had taxable income of $4,594,052 for that year, when he knew he had taxable income of $5,588,249.70.

      Pogue admitted in court documents that he also knowingly understated his taxable income on his 2004 and 2005 individual tax returns. Pogue admitted reporting only $3,111,715 in taxable income for 2004, when he knew his taxable income was $3,686,784.40, and reporting only $2,908,235 in taxable income for 2005, when he knew he actually had $3,030,684.70 in taxable income that year.

      Pogue acknowledged that the total tax loss resulting from his additional, unreported income was $473,680.53.

      Pogue faces up to 3 years in federal prison. A sentencing date has not been set.

      This case is being investigated by the Internal Revenue Service, Criminal Investigations Division, and prosecuted by Assistant U.S. Attorney Andy Williams.

      HELP ME UNDERSTAND HOW HAVE I BARED FALSE WITNESS WHEN THIS WAS REPORTED IN PUBLIC FORUMS?

  21. Paythepiper says:

    Chuck, you will have to account for gossip and rumors on judgement day. Paul was found innocent and the judge gave him 1000 hours community duty to make the IRS go away. In fact the judged Scholded the IRS for the treatment of Mr. Pogue. Mr. Gallagher you are making a living of someone else’s demise which is spreading rumors and gossip wether it be true or not. You really didn’t learn anything in prison from embezzling money and tax evasion. You know how ruthless and heartless this blog makes you look. Obviously you forgo Christianity and went the way of the world. I am not sure how you sleep at night by exposing other people’s downfalls.

  22. Thanks for the update. Knowing that is was reported that Paul plead guilty…I had not, till your comments, heard an update. But, I do have to why 1,000 hours of community service is he was found innocent. Innocent people don’t have to do squat if they are innocent. My sources tell me that Paul plead guilty and his punishment was 1,000 hours of community service.

    Now is Paul a criminal – heavens now…no more than I am. He is a good man who made wrong choices and every choice has a consequence.

    Interesting you judge me yet you espouse your Christianity. In Galatians it says, you reap what you sow. If I sowed bad seeds then I reaped the harvest which was prison. Paul made wrong choices which cost him almost 1/2 year of community service. Choices and consequences.

    The real question is why is this so personal to you?

  23. Paythepiper says:

    He is a good man and has giving millions to non profit orginazations and has built hundreds of churches in Mexico and takes clothes and presents to children with nothing but the grass shack over their head several times a year. A mistake by his accountant cost him 4 years of hell with the IRS. As I said the judge Scholded the IRS publicly for their treatment of Mr Pogue and gave him 1000 hours of Community service to suffice the IRS to leave him Alone or they could have reopened the case if he had been found innocent. The reason he pleaded guilty was to keep all of his employees from being interrogated by the IRS. I would appreciate it if you could remove this post and respect the Pogue family.

  24. Paythepiper…I don’t disagree. I am sure that Paul is a good man. I also understand that dealing with the IRS is at times unfair. Mistakes are costly and I know, from my experience, that dealing with the IRS can be a challenge to say the least.

    That said, to say I would face the death penalty on judgement day is a bit much, don’t you think. All I did was report the truth. Paul did plead guilty. He did so to bring an end to the IRS nightmare and to any who read, they will soon come to understand that Paul did the best he could for all concerned under the circumstances.

    Reports related to Paul are not just generated by me, in fact, the US Attorney’s report is what caused this to catch my eye along with reports that still are available using a simple google search. I can’t help what happened, what I can do is allow this blog to be a place where people can find the truth and the outcome.

  25. Paythepiper says:

    No truth to be found here. Just someone making a living on someone else’s demise. You must be a sad Lonley man Chuck.

  26. David Ballard says:

    Mr. Gallagher, this article is quite old, yet it continues to pop up first-page in some searches of the construction company; interesting. Here are a couple of thoughts relating to this article:

    You noted a lack of familiarity with the federal system; this article might reflect that in one respect. Federal prosecutors are graded by their success in prosecuting crimes, and often the notoriety of those accused furthers the personal agendas of said prosecutors. In this case, the name of someone like Mr. Pogue would bear greater significance than that of a lesser-known CPA. It would, therefore, be a more attractive target to a prosecutor.

    Also, some federal prosecutors work very hard outside of court, wielding their significant power in questionable ways. There have been complaints in the past of coerced plea bargains. It is not hard to imagine prosecutors could make closed-door threats against accuseds’ businesses and families, which could serve to discredit reputations. Consider also the cost and distraction that defending against such accusations would require.

    I learned that Mr. Pogue was not sentenced to any imprisonment, and that, in court, the sentencing judge chastised the prosecutors for pursuing this case in the manner they did. If you wish to read the sentencing transcripts, it may help you update this article.

    Much thanks for your consideration.

    • David…thanks for your comment. Likewise, would welcome the opportunity to read the sentencing transcripts. Wonder if you have access to them or could provide a link where I might find them. Google controls rank in search engines…so perhaps its time to revisit and get some more positive publicity for Mr. Pogue.

      • David Ballard says:

        Mr. Gallagher, I tried to find transcripts online, but unsuccessful so far. The prosecutor’s site (DOJ, Eastern District) only shows the plea and sentencing results, and no sources for court documents that may include transcripts of actual trial proceedings. If I locate, will certainly pass on to you. Much thanks.

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