Sidney resident William Barry Van Hook admitted he filed a false income tax return by failing to report more than $400,000 in income for a year.
Van Hook, 55, pleaded guilty in U.S. District Court in Billings on Wednesday to one count of filing a false return for 2006. Two other counts in an indictment are to be dismissed at sentencing under the terms of a plea agreement.
Assistant U.S. Attorney Ryan Archer said Van Hook was charged after investigators reviewed Van Hook’s records while looking into another case of false billing involving Basic Energy Services Inc. Van Hook was involved in a bartering arrangement with two former Basic Energy employees who were convicted of defrauding the company.
Investigators found that Van Hook diverted to himself corporate receipts from Exploration Drilling, a company owned by his wife and his son, and failed to report the money as income on tax returns. The tax loss was $174,000, Archer said.
Customers who bought equipment and goods from Van Hook told investigators that they wrote checks to Exploration Drilling or to Van Hook’s wife, Archer said.
The records showed Van Hook deposited numerous checks written to his wife or the company into an account at Wells Fargo or cashed them rather than depositing the money into his corporate account at Stockman Bank.
Van Hook didn’t tell his tax preparer he was selling equipment to others or bartering with the Basic Energy employees, Archer said.
Van Hook knew he wasn’t reporting all of his income yet said his 2006 return was accurate by signing it under penalty of perjury, Archer said. Van Hook failed to report an additional $403,146 in other income.
The plea agreement calls for Van Hook to cooperate with federal officers to determine and pay his true tax liability.
Van Hook faces a maximum of three years in prison and a maximum $100,000 fine.
Senior U.S. District Judge Jack Shanstrom set sentencing for July 27 and continued Van Hook’s release.
A federal civil suit filed by Basic Energy against Van Hook and former Basic Energy employees is pending.