By Shereen Siewert
A 55-year-old Wausau man is accused of embezzling $1.7 million from his family’s lumber company and attempting to evade income tax owed by filing false tax returns.
Leonard Kersten was indicted Thursday in Madison by a federal grand jury on three counts of tax evasion, according to the U.S. Department of Justice.
The indictment alleges that Kersten attempted to evade income tax owed by him and his spouse by filing false tax returns which substantially understated his gross income for calendar years 2014, 2015, and 2016.
According to federal documents, Kersten, who was a bookkeeper for the Birnamwood company, wrote more than $1.7 million in unauthorized checks to himself and recorded them as payments to vendors. The checks were written over a 10-year span that ended in September 2017, when the alleged scam was uncovered by company officials.
Kersten was terminated from his employment and filed for bankruptcy protection one month later.
Federal bankruptcy court documents show Kersten did not list any of the embezzled funds as income on his bankruptcy petition or on his income tax returns. In September 2018, a foreign judgement was filed in Marathon County Circuit Court against Kersten and his wife, Jamie Kersten, for $1,753,086.35. A foreign judgment is one that is entered in another jurisdiction, such as another county or state, and recorded in another county for enforcement purposes.
Federal documents show a judgment for the same amount was also filed months earlier in U.S. Bankruptcy Court for the Western District of Wisconsin, ensuring that the debt to Leonard Kersten’s employer was not dischargeable in the couple’s bankruptcy filing.
If convicted, Leonard Kersten faces a maximum penalty of five years in federal prison on each count. Future court dates have not yet been set and Kersten is not in custody at this time.
No criminal charges have been filed against Jamie Kersten.
The charges are the result of an investigation by IRS Criminal Investigation, with assistance from the Office of the U.S. Bankruptcy Trustee.
Assistant U.S. Attorney Meredith P. Duchemin is handling the prosecution.