FORSYTH COUNTY, N.C. — A Kernersville man was sentenced to prison Monday for filing false tax returns, according to District Court Judge William Osteen, Jr.
Judge William Osteen, Jr. sentenced 41-year-old Brandon Michalak to one year and three months in federal prison. Michalak was also ordered to pay restitution of $956,028 in tax loss to the IRS.
In January of 2023, Michalak pled guilty to two counts of filing a false tax return, a violation of Title 26, United States Code, Section 7206(1).
According to court documents, Michalak was co-owner of a metal recycling business called Sarah’s Recycling, where they resold used catalytic converters. He ran the business from his home in Forsyth County, North Carolina.
After a four-year investigation from 2014-2018, Michalak left out $11,022,953 in sales from his catalytic converter business. Each year, Michalak reported minimal taxable income and claimed the Earned Income Tax Credit, which is a refundable credit designed to provide relief for low-to-moderate-income working people.
Simultaneously, Michalak lived a lavish lifestyle that included:
- Home and property purchases without financing
- Home renovations
- Pool installation
- Extravagant jewelry purchases in cash, and
- At least 20 vehicle purchases for himself and his family members
As an example, he paid approximately $136,788 in cash for the purchase of a 2018 BMW Alpina.
“Honest, hardworking citizens should be appalled by the conduct of the defendant in this case,” said United States Attorney Sandra J. Hairston. “Tax evasion hurts all of us, and we will aggressively prosecute anyone who willfully files false tax returns or fails to pay their fair share of taxes, especially in egregious cases like this.”
“The license to run a business is not a license to avoid paying taxes,” said Internal Revenue Service Criminal Investigation, Charlotte Field Office, SAC Donald “Trey” Eakins. The defendant’s misconduct, hiding income, and having his business pay his personal expenses, cheated all Americans who pay their fair share for the government services and protections that we enjoy.”
Sandra J. Hairston, U.S. Attorney for the Middle District of North Carolina, made the announcement after U.S. District Judge William Osteen, Jr. sentenced Michalak. The Internal Revenue Service-Criminal Investigation investigated the case and Assistant U.S. Attorney Clifton T. Barrett prosecuted the case.
