Dive Brief:
- Peter John Mizioch, owner of Phoenix-based construction firm SPAC Enterprises Inc. as well as other companies, pleaded guilty Thursday to a felony federal charge involving claims that he and Goodyear insurance company owner James Francis Bieleniewicz conspired to lower his taxes illegally. He could serve to up to three years in prison.
- Federal prosecutors said that in the scheme, Mizioch would dole out made-up fees to consulting firms in order to lower the company's business income, thus reducing the eventual tax bill. The insurance agent would then cash those fake consulting firm checks and give the money back to Mizioch — after taking an 18% cut for himself.
- Mizioch and Bieleniewicz conducted the scheme between 2004 and 2009, racking up as much as $700,000 in kickbacks, federal prosecutors and the IRS reported.
Dive Insight:
Mizioch initially pleaded not guilty to the federal charge, and his trial was scheduled for November. Now that he changed his plea, however, he has agreed to pay more than $566,000 in restitution costs.
The insurance company owner had already pleaded guilty to two felony tax charges earlier this year.
In 2010, Mizioch and Bieleniewicz were also involved in a dispute regarding life insurance payments after the death of Mizioch's wife. Mizioch was the beneficiary of two of his wife's insurance policies, and Bieleniewicz was the insurance agent. The wife's sons from a former marriage entered a lawsuit into civil court in an attempt to keep Mizioch from receiving he $4.5 million in insurance payments from her policies. The litigation, however, ended in 2012, and Mizioch collected all of the insurance money. No charges were ever brought in the case, and it remains unsolved.
Officials have been cracking down on corrupt practices in the construction industry recently. Earlier this week, four Miami developers and a major Fort Lauderdale contractor pleaded guilty to theft of government funds in an affordable housing scam that cost taxpayers $36 million.
