A former Washington state bank CEO was sentenced Friday in U.S. District Court in Wisconsin to one year in prison for multi-year tax fraud of more than $800,000, according to the U.S. Department of Justice.
U.S. District Judge William M. Conley sentenced Victor Karpiak, 64, of La Crosse, formerly of Seattle, to one year and one day in prison, one year of supervised release and a $150,000 fine for filing a false tax return.
Karpiak failed to report more than $2.3 million in income on his taxes while President and CEO of First Savings Bank Northwest in Renton, Wash., according to the U.S. Justice Department.
According to the Justice Department:
Karpiak, who retired in 2013, was originally charged in the Western District of Washington but chose to have the case moved to La Crosse after moving to the Midwest.
Karpiak was a trustee and consultant for a woman who was the beneficiary of a family and marital trust for about six years, between 2010 and 2016. During that time, he paid himself more than $3 million but reported less than a third of that income, about $940,000.
The tax loss on more than $2 million in income is about $860,000. Karpiak will pay the IRS about $860,000, as well as any civil penalties or interest. Interest alone could amount to more than $140,000.
Prosecutors said Karpiak engaged in tax fraud despite having a high salary and benefits as a bank CEO. Karpiak has four homes across two states, multiple luxury vehicles and a pension of more than $150,000 annually, according to the Justice Department.
As part of his sentencing hearing, Karpiak made a payment on his tax obligation of more than $1 million.
“Our system of government relies on individuals -- particularly high-earners such as Karpiak -- to pay a modest portion of earnings toward communal projects and programs. … (T)he true victim of Karpiak’s greed remains the public and his fellow taxpayers, from whom he effectively stole,” prosecutors wrote in their sentencing memo.