A Missouri business owner who engaged in a $4 million scheme to defraud his customers was sentenced in federal court for tax evasion after failing to pay more than $768,000 in state and federal taxes.
“Not only did this defendant steal millions of dollars from his customers, but he stole from the public by evading taxes he owed on his lucrative business operations,” said Acting U.S. Attorney Teresa Moore. “Despite his many efforts to hide his income and property from the IRS, he has been held accountable for his criminal actions and will be forced to pay his fair share.”
Michael David Dismer, 53, of Rogersville, was sentenced by U.S. District Judge Roseann Ketchmark to five years in federal prison without parole. The court also ordered Dismer to pay $4,335,656 in restitution to his fraud victims, $721,218 to the IRS, and $46,943 to the Missouri Department of Revenue.
“As shown by Mr. Dismer’s sentencing, operating a complex fraud scheme involving numerous victims and committing tax fraud will get you shipped to prison,” said IRS Criminal Investigation Special Agent in Charge Tyler Hatcher. “IRS-CI is committed to investigating not only income and employment tax fraud but also fraud schemes which target innocent customers.”
“The FBI is committed to protecting individuals and businesses from fraud schemes such as the one Mr. Dismer has been sentenced for,” said Charles Dayoub, Special Agent in Charge, FBI Kansas City Division. “Dismer defrauded not only the federal government but also individuals and communities to support his personal and lavish lifestyle. His betrayal of trust was twofold: not only did he betray his employees, but he also betrayed the confidence and trust of his clients. His fraud scheme disrupted the operations of commerce, by not providing large boats, barges, and tugboats to customers around the world. Instead, he deceived these individuals, with no regard to the impact his scheme would have and betrayed his employee by failing to pay employment taxes over 10 years. As a consumer, you have the right to expect to receive the goods and services you have contracted for, and as an employee, you have the right to expect your employment tax obligation to be paid on your behalf.”
On April 14, 2021, Dismer pleaded guilty to tax evasion. Dismer has operated at least eight different businesses (most recently, Worldwide Construction, Inc., and Lakeland Marine Builders, LLC, at Stockton, Mo.) that built large boats, barges, and tugboats for customers around the world since 1993. Dismer engaged in a practice known as “pyramiding” – he ceased operating under business names that accumulated unpaid tax assessment and continued to earn income through newly created business entities.
Dismer admitted that he defrauded 22 customers of his boat-building businesses from 2013 to 2018. Dismer received $4,335,656 from those customers for the construction of specific vessels but failed to deliver the promised completed vessels. Instead, Dismer admitted, he diverted substantial funds to his personal use.
Dismer made false representations (including providing misleading photographs) to his customers, claiming that the construction of their boats had reached progress points or milestones to induce customers to make their next incremental payments. At least 14 customers received incomplete, inoperable, or unseaworthy vessels from Dismer after paying him more than $2.9 million. At least seven customers who paid Dismer more than $1.3 million received nothing in return.
For example, Dismer received $96,250 from the Village of Igiugig (an unincorporated Native American village in Alaska), which was the proceeds of a federal economic development grant, in December 2015. Dismer immediately withdrew $70,000 of those funds and used it to purchase his Stockton construction facility, including the land and shop. Dismer then transferred title to the Stockton property to Cardgames on Motorcycles, Inc., in which the sole shareholder was a 21-year-old person, to attempt to keep the real estate out of the reach of the IRS and other creditors. The Igiugig Tribal Council paid Dismer a total of $242,375 to build a push-style truckable tugboat but received nothing in return.
Under the terms of his plea agreement, Dismer was required to sell the Stockton property, with the net proceeds of the sale to be paid as restitution to his victims. Dismer also was required to liquidate all of his other assets so that the proceeds can be used to pay restitution to his victims.
Dismer also admitted that he did not file business or personal income tax returns for tax years 2009 through 2017. Dismer’s total tax liability for tax years 2012 through 2016 was at least $291,441, based on a gross income that totaled more than $4 million. Additionally, the state of Missouri suffered an income tax loss of $46,942 from 2012 to 2016.
In an effort to evade paying taxes, Dismer used 28 different bank accounts at six different banks and transferred funds between those accounts, mingling business and personal accounts. Dismer kept no contemporaneous business books and records that would have enabled him to accurately and timely file his individual tax returns. Dismer admitted he made false statements to law enforcement officials during an interview.
Dismer also admitted that he collected payroll taxes from his employees but failed to pay over to the government a total of $429,777 of federal income tax and payroll taxes between 1996 and 2007. From 2012 to 2017, Dismer treated his workers as contract labor rather than employees to avoid additional employment tax liabilities.
This case was prosecuted by Assistant U.S. Attorney Shannon Kempf. It was investigated by IRS-Criminal Investigation and the FBI.