Walraven brothers get 40-month, 43-month prison terms, respectively, for tax evasion

     BAY CITY – Two local Harrison businessmen were sentenced to prison time Monday on tax evasion charges despite letters from community members pleading for leniency for the brothers due to their civic involvement.
     Timothy Walraven, 48, and William Walraven Jr., 45, are the owners and president and vice president, respectively, of Country Garden Fruit Markets in Harrison and Cadillac along with being owners and partners in Walraven’s Car Wash. They owned four car washes in Harrison, Gladwin and Beaverton.
     Judge Thomas Ludington sentenced the men in the U.S. District Court for the Eastern District of Michigan on two charges as part of a plea agreement reached Jan. 13.     The Walravens were sentenced on one count of conspiracy to defraud the Internal Revenue Service through income tax evasion and one count of income tax evasion. The remaining four charges of tax evasion against the brothers were dismissed.
    Timothy Walraven also had four counts of filing false corporate tax returns, signed under penalty of perjury, and a charge of aiding and abetting the creation of structured transactions to evade reporting requirements dismissed.
    William Walraven also had a charge of filing a false partnership tax return, signed under penalty of perjury, dismissed.
    Timothy Walraven was sentenced to 40 months in prison while William Walraven was sentenced to 43 months. Both brothers were sentenced to completion of a substance abuse treatment program, a financial responsibility program, three years of supervised probation, ordered to pay the cost of prosecution of $10,000 and more than $600,000 in restitution to the IRS. It was determined the restitution will be more than two million dollars with penalties and interest. The exact amount will be determined by the IRS.
The prosecution cost will be determined before the Walravens pay that amount as it was disputed whether they are responsible for $10,000.
     William’s attorney, Eric Nemeth, argued a minor offense from years ago changed the sentencing guidelines to 41 to 51 months for him.
     “What emerges here is two close brothers with community, friends and family support,” Nemeth said. “It was an incredible blindspot and lapse in judgment.”
     Nemeth said William’s family also has suffered as he has three minor children and his wife had to leave her school board position. “He has to face of a loss of reputation, the family business and legacy, assets and his liberty,” Nemeth argued. “He will be a convicted felon with all that conveys … He will never be able to hunt with his children again. That rite of passage that was lost will be a reminder every fall.”
     “He admitted to everyone that is was wrong and accepted responsibility,” said Walter Piszczatowski, attorney for Timothy. “Mr. Walraven is a productive member of society. He’s a good family man.”
Numerous letters were submitted to Ludington showing support for the Walravens as well as more than 40 friends and family members showing up to court.
     Despite pleas Timothy Walraven is being punished financially, by losing his reputation, by hurting his family and other ways, Ludington followed the sentencing guidelines of 37 to 46 months.
“I know what I did was wrong … I never wanted to hurt anyone. Now I have hurt my family, friends, the community,” Timothy pleaded. “I’ve learned my lesson and if I get a second chance you’ll never see me back here.
     “There’s not really a lot left to say,” William Walraven said. “I wish there was a way to punish me without punishing everyone else.”
     “The impact often falls as much on family and friends,” Ludington said. “The other justification was to provide the Walravens with time to adjust to the custodial sentence.”
     The prison sentence for each of the Walravens will begin after Jan. 4, 2010 so the families can adjust to running the businesses without the brothers and financial records can be put in order.
     “Not only is it a matter of not paying the full taxes, but the gravity of this is large,” Ludington said. He said when the search of the Walrvavens’ houses took place, there was more than $1,023,000 seized at Timothy’s house and $329,000 at William’s.
     U.S. Attorney Barbara Tanase said the loss of reputation, burdens to the family and other consequences were not unlike other defendants. She said despite being charitable and good community members, the Walravens had committed the crimes over the course of 14 years.
     “You have been a good husband, father, friend and neighbor. You will have that second chance,” Ludington said. “We need to confront the gravity of this offense.”
Timothy and William Walraven were president and vice president, respectively, of Country Garden Fruit Market Inc,. with locations in Harrison and Cadillac, along with being owners and partners of four Walraven’s Car Washes.
     U.S. Attorney Terrence Berg stated they engaged in other business activities which included the purchase and selling of heavy construction equipment and trucks, sale of real estate and loaning money to third parties.
     Between 1991 and 2008, the Walravens skimmed income from the fruit market and hoarded large amounts of currency in their personal residences.
     During tax years 2001 through 2005, Timothy received taxable income of at least $738,359, while reporting $159,872 to the IRS, Berg said. Between 2001 and 2005, William’s taxable income was $629,952.03 when he reported $50,465 to the IRS.
     “Skimming cash and concealing it from the IRS is a clear violation of the obligation to report income. Our system of federal income taxes relies upon the honesty, integrity and voluntary cooperation of every American,” Berg said.
      “They’re very remorseful for what happened,” Nemeth told The Clare Sentinel after the hearing. “The family will move on. The goal is to keep the businesses open and people employed in the community.”