The owner of a trucking company is being charged with fraud and tax evasion after he allegedly used over $700,000 in employee payroll taxes to fund what prosecutors are calling his “extravagant personal expenses.”
Michael Gerstenberg owns Pennsylvania-based AE Logistics. Gerstenberg withheld federal income, Medicare, and Social Security taxes from his employees’ paychecks as expected. But, from 2010 and 2015, prosecutors say that instead of paying that money to the IRS, the company kept it.
Gerstenberg took a Caribbean vacation, gambled, paid his country club dues, went to night clubs, bought jewelry, and more. The money for those things allegedly came out of the company’s accounts – accounts which were padded with employee payroll taxes.
Prosecutors claim that AE Logistics failed to pay $732,291 in tax.
According to Lehigh Valley Live, investigators also discovered that Gerstenberg had allegedly filed a false income tax return for his girlfriend in 2012 and 2013, inflating her income. Court documents suggest that she did not know about the fraudulent tax return.
Gerstenberg has been charged with tax evasion and fraud.