EAST LANSING, Mich. A Michigan real estate developer pleaded guilty to tax evasion following allegations that he withheld employee taxes but did not pay them to the IRS.
Scott Chappelle, 61, of Okemos and East Lansing, was a former certified public accountant and owner of Terra Management Company, Strathmore Development Company Michigan LLC, and Terra Holdings LLC. According to court records, the businesses were engaged in real estate development and property management in the East Lansing area.
Chappelle admitted to the Department of Justice that he did not pay employee taxes to the IRS. When the IRS attempted to collect the unpaid taxes, officials allege that Chappelle lied about his personal assets and income, concealed his vacation home on Lake Michigan, and purchased real estate in nominee names rather than his own.
He is also accused of lying to the IRS about his inability to pay his debts while maintaining personal expenses, which included mortgage payments on two homes and a condominium, college tuition for his children, personal credit card bills, life insurance premiums, car payments for himself and one of his children, and expenses associated with boats he owned.
According to authorities, Chappelle lied to IRS investigators, claiming he had not purchased property since the agency began collecting. He concealed the source of funds used to purchase an East Lansing condo, officials said.
According to the DOJ, Chappelle also filed a false employment tax return on behalf of Terra Holdings LLC, claiming the company had no employees and paid no wages during the time period covered by the return. During this time period, he approved submissions to the company’s payroll provider.
Chappelle also admitted to lying on a loan application when refinancing the mortgage on his Lake Michigan vacation home in Harbor Springs, the DOJ said.
Chappelle’s sentencing is scheduled for Aug. 2. He faces a maximum five-year prison sentence for tax evasion. Additionally, he faces a supervised release period, restitution, and monetary penalties.