Sathre to be sentenced for tax evasion in federal court today
Date posted: May 7, 2014
SHERIDAN — A Sheridan man is scheduled to appear in federal court in Cheyenne this afternoon to be sentenced for tax evasion. Robert Sathre pleaded guilty to the charge Feb. 26 after he and his wife, Judy Sathre, were indicted together for concealing money in an offshore bank account.
The charges were first filed in May of last year. The narrative provided with the federal case explained that the Sathres did not report income gained in 1995 as a result of selling a business to which Robert Sathre owned a controlling interest.
The sale agreement for the company, Industrial Custom Products, Ltd., stipulated the Sathres would receive $3.19 million in monthly installments through March of 1996. However, the Sathres’ 1995 tax return claims just under $65,000 in income.
On March 1, 1996, Sathre, under the name of the purported trust FOL Enterprises, purchased a property in Sheridan near the intersection of Fifth Street and Interstate 90 known as The Rock Stop. That same year, the Sathres opened the offshore bank account.
In 1998, Sathre opened an account at the Sheridan State Bank and signed a legal document falsely certifying he is not a U.S. citizen or resident.
In 2001, the couple executed a real estate transaction in Minnesota under the guise of the New West Investments trust. The Sathres also, in 2003, mortgaged their home at 7 Troon Place, at The Powder Horn, to the same trust.
Between 2006 and 2007, four deposits were made into an account on the Caribbean Island of Nevis, ranging from $75,000 to $629,000.
Sathre sold The Rock Stop for $2 million in 2007. Sathre sent $1.25 million from that sale to a law firm, and a few weeks later, the same unnamed law firm was directed to transfer $900,000 to the account in Nevis. The firm was told the funds were for payment of a promissory note and was specifically instructed to not include the Sathres’ names or the account number on the wire instructions for privacy reasons.
In August 2007, Sathre approached the Bank of Nevis and inquired about the process to establish a debit card to allow for access to funds in the account there. The same month, he also directed $8,100 of the Rock Stop sale proceeds be used to purchase a vehicle for his wife.
Neither of the Sathres claimed signatory authority over the Nevis account on their tax return for that year.
The husband and wife team, married 39 years, were indicted together. Robert Sathre was charged with conspiracy to defraud the United States and evasion of the payment of tax. Judy Sathre was also charged with conspiracy, tax evasion and willfully subscribing to a false return.
Both of Robert Sathre’s charges are punishable by up to five years in prison, a $250,000 fine and $100 special assessment. Therefore, he’s looking at a possible 10 years in prison and more than half a million dollars in fines.
Judy Sathre was charged with two of the same crimes, and the possible sentence is the same. Filing a false tax return is also punishable by up to three years in prison, a $250,000 fine and $100 special assessment. Judy Sathre’s total possible punishment is up to 13 years in prison and more than $750,000 in fines.
In addition to the potential prison time and fines, the Sathres will also owe restitution on the unpaid taxes they gained as personal income as a result of their financial transactions. If the taxes had been paid the year they were due, they would have amounted to less than $1 million, but with penalties and interest dating back to the mid-90s, the Internal Revenue Service calculates the restitution amount to be $3,113,882.
The question of how the restitution will be paid is still under negotiation. Robert Sathre’s income today is $1,500 per month in Social Security, which will stop if he enters prison. Judy Sathre’s income from working within Sheridan County School District 2 is $1,300 for nine months of the year.
At one point during the proceedings leading up to a federal grand jury trial, the Sathres had filed a motion with the court to have their cases separated because of antagonistic defenses. The motion purported Judy Sathre intended to use the “innocent spouse” defense and she would claim she just did what her husband told her to do. Meanwhile, Robert Sathre’s defense would be that he did not commit the crimes. The motion was ultimately denied by U.S. District Judge Alan Johnson on the grounds that one defendant accusing the other of a crime does not immediately make their defenses mutually exclusive.
A few weeks later, a private plea agreement was reached with Robert Sathre, and he pleaded guilty to one count of tax evasion. Judy Sathre’s case is still open, but has not advanced since her husband pleaded guilty. A document negotiating the terms of repayment of restitution indicates that if the plea agreement is executed, Robert Sathre will be 68 or 69 years old when he is released from correctional custody.
Robert Sathre’s sentencing will occur in Cheyenne at 1:30 p.m. today. His defense lawyer is Ryan Healey of Sheridan. The Sheridan Press will report the sentence in tomorrow’s edition.