Businessman ordered to $556K in tax fraud case

A West Roxbury man is facing a year of home confinement, electronic monitoring and three years of probation after he pleaded guilty to one count of procuring a false tax return.

Harold Grabert, 55, of 46 Eastwood Court, West Roxbury, entered his plea on Monday in U.S. District Court. He was facing prosecution for offenses he committed while managing the finances of his family's Milton company, Leading Way Construction Company, Inc. In addition to his probation, Grabert was also ordered to repay about $556,000. If his case had gone to trial, he could have faced up to five years in prison.

According to court documents filed by Assistant U.S. Attorney Jonathan F. Mitchell, Grabert "engaged in a deliberate, repetitive effort to evade his tax obligations which resulted in the loss to the IRS of over a half-million dollars" because he concealed overtime wages from the firm's tax preparer. The money was hidden when Grabert paid overtime wages from an account connected to a shell company and made the checks out to fictitious employees.

Given that banks customarily only cash checks made out to real people, Grabert directed his workers to cash their checks at the Hyde Park Pub, which meant Grabert could evade payroll taxes. Grabert also concocted schemes to avoid paying income taxes by mischaracterizing personal expenses as business expenses. The IRS also said that Grabert lied to IRS officials before the criminal investigation about the extent of his assets.

Jessica Smith can be reached at jsmith@cnc.com