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United States of America v. Frederick G. Kriemelmeyer
Case Number: 3:19-cr-00090-wmc
Judge: William M. Conley
Court: United States District Court for the Western District of Wisconsin (Dane County)
Plaintiff's Attorney: United States District Attorney’s Office
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The United States of America charged Frederick G. Kriemelmeyer with tax evasion.
A La Crosse, Wisconsin, dentist was sentenced to 72 months in prison today for tax evasion, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division and U.S. Attorney Scott C. Blader for the Western District of Wisconsin.
According to evidence presented at trial, Frederick G. Kriemelmeyer, 71, operated a dental practice in La Crosse, Wisconsin. In 2007, Kriemelmeyer was ordered by the U.S. District Court for the Western District of Wisconsin to pay $135,337 to the Internal Revenue Service (IRS) for unpaid income taxes. By 2012, the IRS had assessed Kriemelmeyer for more than $450,000 in taxes, interest, and penalties. Evidence presented at the trial showed Kriemelmeyer took a number of actions to evade paying the taxes he owed. From at least 2013 through 2015, Kriemelmeyer did not file tax returns reporting the income from his dental practice, directed his patients to pay him in cash or by check with blank payee lines, and paid his business and personal expenses with third-party checks and cash.
In addition to the term of imprisonment, U.S. District Judge William M. Conley ordered Kriemelmeyer to serve three years of supervised release and to pay $226,839 in restitution to the United States. Kriemelmeyer was remanded to the custody of the Bureau of Prisons.
Principal Deputy Assistant Attorney General Zuckerman and U.S. Attorney Blader commended special agents of the IRS-Criminal Investigation Division, who conducted the investigation, and Trial Attorney Eric C. Schmale of the Tax Division and Assistant U.S. Attorney Elizabeth Altman, who prosecuted the case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.
26:7201.F ATTEMPT TO EVADE OR DEFEAT TAX
Except as otherwise specifically provided in this Act, in this Act, the following definitions shall apply:
(1) Appropriate State regulatory authority
The term “appropriate State regulatory authority” means the State agency or other authority responsible for the licensure or other regulation of the practice of accounting in the State or States having jurisdiction over a registered public accounting firm or associated person thereof, with respect to the matter in question.
The term “audit” means an examination of the financial statements of any issuer by an independent public accounting firm in accordance with the rules of the Board or the Commission (or, for the period preceding the adoption of applicable rules of the Board under section 7213 of this title, in accordance with then-applicable generally accepted auditing and related standards for such purposes), for the purpose of expressing an opinion on such statements.
(3) Audit committee
The term “audit committee” means—
(A) a committee (or equivalent body) established by and amongst the board of directors of an issuer for the purpose of overseeing the accounting and financial reporting processes of the issuer and audits of the financial statements of the issuer; and
(B) if no such committee exists with respect to an issuer, the entire board of directors of the issuer.
(4) Audit report
The term “audit report” means a document or other record—
(A) prepared following an audit performed for purposes of compliance by an issuer with the requirements of the securities laws; and
(B) in which a public accounting firm either—
(i) sets forth the opinion of that firm regarding a financial statement, report, or other document; or
(ii) asserts that no such opinion can be expressed.
The term “Board” means the Public Company Accounting Oversight Board established under section 7211 of this title.
The term “Commission” means the Securities and Exchange Commission.
The term “issuer” means an issuer (as defined in section 78c of this title), the securities of which are registered under section 78l of this title, or that is required to file reports under section 78o(d) of this title, or that files or has filed a registration statement that has not yet become effective under the Securities Act of 1933 (15 U.S.C. 77a et seq.), and that it has not withdrawn.
(8) Non-audit services
The term “non-audit services” means any professional services provided to an issuer by a registered public accounting firm, other than those provided to an issuer in connection with an audit or a review of the financial statements of an issuer.
(9) Person associated with a public accounting firm
(A) In general
The terms “person associated with a public accounting firm” (or with a “registered public accounting firm”) and “associated person of a public accounting firm” (or of a “registered public accounting firm”) mean any individual proprietor, partner, shareholder, principal, accountant, or other professional employee of a public accounting firm, or any other independent contractor or entity that, in connection with the preparation or issuance of any audit report—
(i) shares in the profits of, or receives compensation in any other form from, that firm; or
(ii) participates as agent or otherwise on behalf of such accounting firm in any activity of that firm.
(B) Exemption authority
The Board may, by rule, exempt persons engaged only in ministerial tasks from the definition in subparagraph (A), to the extent that the Board determines that any such exemption is consistent with the purposes of this Act, the public interest, or the protection of investors.
(C) Investigative and enforcement authority
For purposes of sections 7202(c), 7211(c), 7215, and 7217(c) of this title and the rules of the Board and Commission issued thereunder, except to the extent specifically excepted by such rules, the terms defined in subparagraph (A) shall include any person associated, seeking to become associated, or formerly associated with a public accounting firm, except that—
(i) the authority to conduct an investigation of such person under section 7215(b) of this title shall apply only with respect to any act or practice, or omission to act, by the person while such person was associated or seeking to become associated with a registered public accounting firm; and
(ii) the authority to commence a disciplinary proceeding under section 7215(c)(1) of this title, or impose sanctions under section 7215(c)(4) of this title, against such person shall apply only with respect to—
(I) conduct occurring while such person was associated or seeking to become associated with a registered public accounting firm; or
(II) non-cooperation, as described in section 7215(b)(3) of this title, with respect to a demand in a Board investigation for testimony, documents, or other information relating to a period when such person was associated or seeking to become associated with a registered public accounting firm.
(10) Professional standards
The term “professional standards” means—
(A) accounting principles that are—
(i) established by the standard setting body described in section 19(b) of the Securities Act of 1933 [15 U.S.C. 77s(b)], or prescribed by the Commission under section 19(a) of that Act [15 U.S.C. 77s(a)] or section 78m(b) of this title; and
(ii) relevant to audit reports for particular issuers, or dealt with in the quality control system of a particular registered public accounting firm; and
(B) auditing standards, standards for attestation engagements, quality control policies and procedures, ethical and competency standards, and independence standards (including rules implementing title II) that the Board or the Commission determines—
(i) relate to the preparation or issuance of audit reports for issuers; and
(ii) are established or adopted by the Board under section 7213(a) of this title, or are promulgated as rules of the Commission.
(11) Public accounting firm
The term “public accounting firm” means—
(A) a proprietorship, partnership, incorporated association, corporation, limited liability company, limited liability partnership, or other legal entity that is engaged in the practice of public accounting or preparing or issuing audit reports; and
(B) to the extent so designated by the rules of the Board, any associated person of any entity described in subparagraph (A).
(12) Registered public accounting firm
The term “registered public accounting firm” means a public accounting firm registered with the Board in accordance with this Act.
(13) Rules of the Board
The term “rules of the Board” means the bylaws and rules of the Board (as submitted to, and approved, modified, or amended by the Commission, in accordance with section 7217 of this title), and those stated policies, practices, and interpretations of the Board that the Commission, by rule, may deem to be rules of the Board, as necessary or appropriate in the public interest or for the protection of investors.
The term “security” has the same meaning as in section 78c(a) of this title.
(15) Securities laws
The term “securities laws” means the provisions of law referred to in section 78c(a)(47) of this title and includes the rules, regulations, and orders issued by the Commission thereunder.
The term “State” means any State of the United States, the District of Columbia, Puerto Rico, the Virgin Islands, or any other territory or possession of the United States.
(17) Foreign auditor oversight authority
The term “foreign auditor oversight authority” means any governmental body or other entity empowered by a foreign government to conduct inspections of public accounting firms or otherwise to administer or enforce laws related to the regulation of public accounting firms.
Outcome: Defendant was order to serve three years of supervised release and to pay $226,839 in restitution to the United States. Kriemelmeyer was remanded to the custody of the Bureau of Prisons.
Sentencing Memorandum by United States of America as to Frederick G. Kriemelmeyer (Attachments:
# 1 Exhibit 1194 Trascript Excerpts,
# 2 Exhibit 1991 MN State Court Decision Letter,
# 3 Exhibit JNC re 1995 State Tax Conviction,
# 4 Exhibit 2004 WI Notice,
# 5 Exhibit WI DOR Summary of Oustanding Taxes Owed,
# 6 Exhibit 1988 Form 1040,
# 7 Exhibit 1998 IRS Letter,
# 8 Exhibit Insurance Letters with FK Note,
# 9 Exhibit Police Report re Private Exempt Plates,
# 10 Exhibit MN v. Kriemelmeyer Docket,
# 11 Exhibit 2019.10.31 Ex. to Notice of Motion for Reconsideration,
# 12 Exhibit 2019.10.31 Notice of Motion for Reconsideration,
# 13 Exhibit 2019.08.30 Brief in Support of Motion,
# 14 Exhibit 2019.10.01 Motion Hearing,
# 15 Exhibit 7 Jan 14 Dental License Injuction,
# 16 Exhibit 29 Dec 14 Dental License Injunction) (Altman, Elizabeth) (Entered: 05/15/2020)