Maui businessman Charles Loewen, 57, pleaded guilty Thursday to conspiring to defraud the U.S. and filing a false claim for a tax refund.
Loewen is the owner of Paradise Stone & Tile. He faces a maximum sentence of 10 years in prison. He is scheduled to be sentenced on July 3.
Prosecutors say Loewen conspired to use a scheme in which he and his wife falsely claimed tax refunds from the IRS totaling $2,353,173.22. They say he created fake supporting tax documentation, specifically phony 1099-OID Forms to make it appear as if the IRS owed him a large tax refund, when, in fact, the IRS did not.
According to evidence presented in court, Loewen further conspired to conceal his Paradise Stone & Tile business income from the IRS. After the State of Hawaii Department of Taxation levied two of Loewen's Territorial Savings Bank accounts, he closed the accounts.
Loewen's wife opened an Arizona bank account and Loewen began depositing his Paradise Stone & Tile business income into this Arizona account. Loewen later submitted false federal tax returns to the IRS claiming that he earned zero net income for three years, when, in fact, he had earned net income for those years.