A partner of the owners of Excavation Construction Inc., a major area construction company beset by legal troubles, was sentenced yesterday to nine months in prison and a $5,000 fine for evading taxes on more than $60,000 in personal income.
Richard L. Bennett pleaded guilty in U.S. court in Baltimore to one count of income tax evasion in a plea bargain that included dropping other charges against him and enlisting his cooperation in ongoing investigations.
Bennett owns 12.5 percent of two related companies -- Suburban Paving Co. Inc. and Asphalt Construction Inc. The rest of the stock in those companies is held by the owners of Excavation Construction -- John W. Lyon and Larry A. Campbell. Lyon, who also is president of Parking Management Inc. (PMI), and Campbell also are charged with failing to pay income taxes on corporate funds used for personal purposes. Their trials are scheduled for October.
U.S. District Court Judge Edward S. Northrop called Bennett's conduct among the most flagrant he had seen. He said it was "clear from the evidence" that Bennett evaded his taxes with intent and design.
According to the indictment against Bennett, he used Suburban Paving and Asphalt Construction to pay for personal items, primarily renovation of a farmhouse in Mitchellville, in Prince George's County, that he bought in 1975 for $90,000 and recently sold for $220,000.
The indictment charged that Bennett contracted with various companies to do renovation work and paid for it out of company funds with the payments disguised through false bookkeeping entries. He also was charged with causing one of the firms to issue three checks called bonuses. According to company records, of the $15,000 in bonuses, only $5,000 went to Bennett, with the rest divided among two employes, who reported it on their tax returns.
In reality, federal prosecutors charged, the money went to Bennett and the company later compensated the two employes for taxes they paid on it. Bennett was charged with evading approximately $11,000 in taxes in each of two years, 1975 and 1976. His guilty plea was to the 1975 count.
Bennett was indicted last October and charged with two counts of income tax evasion and other tax-related charges. He also was charged in a separate case along with Suburban Paving and Asphalt Construction with numerous counts of mail fraud and making false statement to a federal agency to obtain a contract intended for a small business.
Suburban has pleaded guilty to one count of mail fraud and one count of false statements; Asphalt Construction has pleaded guilty to one count of making false statements.
A Nevada holding company called ICE, which is owned by Lyon and Campbell, owns 87.5 percent of the stock of Suburban and Asphalt Construction. The holding company also owns Excavation Construction and a network of about 30 other construction and related companies in the area.