Former bank CEO sentenced to prison time for tax fraud

SEATTLE — A former CEO of a community bank branch in Washington was sentenced in U.S. District Court in Wisconsin on Friday.

Victor Karpiak, 64, was sentenced to one year and one day in prison and one year of supervised release and was issued a $150,000 fine for filing a false tax return, U.S. Attorney Brian T. Moran announced.

Karpiak failed to report more than $2.3 million in income on his taxes between 2010 and 2016, officials said.

Karpiak was the CEO of First Savings Bank Northwest in Renton and retired in 2013. After retiring, Karpiak moved from the Seattle area to La Crosse, Wisconsin.

He was charged in Washington but chose to have his case resolved near his new home in Wisconsin, officials said.

Records filed in the case showed that Karpiak served as a trustee and consultant for a woman who was the beneficiary of a family and marital trust from 2010 to 2016.

Scroll down to continue reading

More news from KIRO 7

DOWNLOAD OUR FREE NEWS APP 

Officials said Karpiak became a trustee because the woman’s late husband was a “significant customer for the bank.”

“Over those years, Karpiak paid himself fees of $3,265,072 but on his taxes KARPIAK reported less than a third of that income ($943,322). The tax loss on more than $2,321,750 in income is $867,540. Karpiak will pay $867,540 to the IRS as well as any interest or civil penalties the IRS imposes in the case. The interest alone in this case could total more than $143,647,” a representative for Moran wrote in a news release.

Prosecutors noted in their sentencing memo that Karpiak engaged in the tax fraud while he earned a significant salary and benefits as the CEO of the bank branch.

"Today Mr. Karpiak was held accountable for willfully and intentionally violating his legal duty to declare and pay his taxes," said Justin Campbell, IRS-Criminal Investigation Special Agent in Charge of the Seattle field office.

"The U.S. tax system works because honest law-abiding taxpayers know that everyone, including corporate officers, are paying their fair share."

Cox Media Group