Ex-construction contractor faces tax charges

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The owner of a Marinette construction subcontracting company has agreed to plead guilty to a felony for failing to pay $51,000 in federal taxes.

Joe Wilke, 56, is charged with one count of tax evasion and faces up to five years in prison, according to court papers filed Tuesday. The U.S. Attorney’s Office in Milwaukee has alleged that Wilke, who owned the now-defunct industrial pipefitting company HVAC-R of Marinette Inc., reported $62,118 in taxable income for his wife and him in 2007. He reported they owed $15,232 in taxes.

In reality, they made nearly double that income and owed $37,064. Wilke, who prepared the taxes, did not count income from another business, Kidz Ice, during that year.

According to a plea agreement filed Tuesday, Wilke, who has never been convicted of a crime, also underestimated his taxes in 2008 and 2009, bringing his total of unpaid taxes to $51,000.

“To conceal his operation of Kidz Ice, Wilke told his accountant that the bank account into which Wilke deposited receipts from Kidz Ice was dormant,” according to the plea agreement. “In addition, Wilke told his accountant that funds, which Wilke transferred from the Kidz Ice account to the operating account for HVAC-R, were personal funds …”

Assistant U.S. Attorney Matt Jacobs said he agreed not to charge Wilke for the tax crimes in 2008 and 2009 if Wilke pleaded guilty to the single tax evasion count. A plea hearing is set for July 7.

Per the agreement, Wilke also has to pay the Internal Revenue Service $108,178.14 for the unpaid taxes, as well as penalties and interest. Prosecutors also will recommend a lighter sentence in exchange for his accepting responsibility.

Reached by phone Wednesday, Wilke admitted to not paying his taxes. However, he said, he did not know he was filing them incorrectly until the IRS inquired.

“Basically, I didn’t carry my zero, dot my ‘i,’” he said. “I showed the money in my business and didn’t report it at the end of the year.”

But Wilke placed some of the blame on former HVAC-R employee Tim Garceau, who is Wilke’s cousin’s husband. Wilke said Garceau knew about the incorrect bookkeeping but didn’t say anything. After Garceau left the company as a “disgruntled employee,” he reported Wilke to the IRS, Wilke said.

Still, Wilke said that because the “taxes are in my name,” he is the one who got in trouble.

“I didn’t know I was doing it wrong until it was too late,” Wilke said.

Garceau denied reporting Wilke. Garceau added, though, that there was a lot of questionable activity in the three years he worked for Wilke.

“I’ve got no reason to turn him in,” Garceau said. “I washed my hands of him five years ago.”

Wilke’s unpaid taxes are not the only trouble Wilke had in recent years. He shut down Kidz Ice, which delivered ice to gas stations and other businesses, two years ago, and shut down HVAC-R in March. He said money problems contributed to his shuttering the businesses.

He now works for a contractor through the Kaukauna-based Plumbers & Steamfitters UA Local 400, though he would not name the company.

He also has an unpaid judgment worth $34,719.64, which stemmed from a lawsuit some former HVAC-R employees filed against him in federal court over not paying into their pension fund.

The IRS investigation has been pending for about five years, and while he is taking the blame, Wilke said he also took the plea agreement because of the cost of a trial.

“It was cheaper,” he said, “for me to do what I did instead of fight.” Follow @eheisigWLJ