The Herald, Sharon, Pa.

April 10, 2014

Probation, fines ordered in couple’s tax evasion case

By Joe Pinchot
Herald Staff Writer

HERMITAGE — A Hermitage couple has resolved their criminal cases over federal tax evasion charges, but still face civil proceedings with the IRS.

Eric Graven, 57, and his wife, Barbara, 58, of 711 Audubon Drive, each pleaded guilty Monday – the day after their 35th wedding anniversary – to charges of conspiracy to commit tax evasion.

They were sentenced the same day, Graven to 3 years’ probation with 150 hours’ community service and a $4,000 fine and Mrs. Graven to 2 years’ probation and a $2,000 fine.

They also must pay $35,805 restitution.

According to the U.S. Attorney’s Office, Pittsburgh, the Gravens, owners of Custom Stone and Tile Inc., Hermitage, failed to report cash earnings from 2005 through 2008 to avoid paying income tax on those earnings.

Investigators were tipped off by disgruntled employees of the company, prosecutors said, and the business was searched Aug. 6, 2009.

The parties met for about four years to resolve the case but, when no settlement was reached, prosecutors secured an indictment Aug. 6.

The parties disagree as to where the money went. The Gravens said it went to pay employee bonuses at Custom Stone and their other business, Susi Builders Supply, Hermitage. Prosecutors acknowledged money went for bonuses but alleged others funds were diverted “for personal use.”

Although sentence guidelines recommended a prison term of 10 to 16 months for Graven and 6 to 12 months for his wife, prosecutors did not object to a probationary sentence.

In a sentencing memorandum, Mrs. Graven’s attorney depicted her as “a devoted wife, mother and civil servant who is deeply remorseful for her actions.”

Her community service efforts include significant time spent with Children’s Services of Mercer County, Hermitage Business Association and Faith Presbyterian Church, Hermitage.

The Gravens, who have three grown children, have donated construction materials for various worthy causes and given jobs to people who have served time incarcerated, who otherwise likely would have trouble getting jobs, and have substance-abuse issues.

Graven also cited his community service, with Penn-Northwest Development Corp., Mercer County Builders Association, Hermitage Municipal Authority and his church.

“He regrets what he did and understands that there is no legal or moral excuse for his actions,” his attorney said.

The Gravens in 2012 paid the tax loss due as restitution, but acknowledged they will have to file corrected or amended tax returns that could require payment of penalties and interest.

“Following the imposition of sentence, the civil side of the IRS will calculate tax due and owing for the subject years,” prosecutors said. “That calculation of tax loss may be different from the tax loss calculated for criminal purposes.”