Tax Fraud
Wisconsin-based 5R Processors CEO, Kevin Shibilski, was recently given a prison sentence of 33 months, due to his participation in a tax crime. Through a plea bargain between prosecutors and the defendant, CRT-related charges were dropped in exchange for Shibilski’s conviction of tax fraud.
Headquartered in Ladysmith, Wis., 5R Processors had numerous locations scattered throughout Wisconsin and one facility based in Tennessee. The organization provided services to many large companies, institutions, and manufacturers, who were participating in take-back programs.
In May of 2022, Shibilski was found guilty for not paying taxes to the IRS. On Tuesday, Feb. 21, he appeared before a federal judge and was handed down his sentence. This included imprisonment, plus three years of probation, and restitution in the amount of $197,000.
Millions of Pounds of CRT Materials Left Behind
The sudden closure of 5R Processors left a massive amount of CRT materials stockpiled in storage facilities, in both Wisconsin and Tennessee. Consequently, the state of Wisconsin is attempting to resolve the issue by cleaning up the affected sites.
In a plea agreement, Shibilski consented to plead guilty to one count of storing and disposing of hazardous waste (CRT glass) without a permit. In exchange, prosecutors dismissed the remaining eight counts of wire fraud.
Per the advisory sentencing guidelines, U.S. District Judge James D. Peterson ordered a prison term of 33 months for Shibilski, with a maximum length of 41 months. It was decided that April 4th, 2023, would be the date by which Shibilski must report to the Federal Bureau of Prisons to begin serving his sentence.
“Judge Peterson explained that a sentence of imprisonment was necessary in this case to send a deterrence message to two groups,” the U.S. Attorney’s Office stated in a press release. “One, business owners who willfully fail to pay their employment taxes and need to know their actions will have consequences and they will go to federal prison. Two, the general public who need to know that prison is not just for the impoverished or drug dealers.”
In September 2022, the former president of 5R, James Moss, was released from prison after serving a stint for hazardous waste and tax related crimes. Court records indicate that he had acted as a witness for the prosecution in the case against Shibilski.
Also, “three other former 5R leaders have already either agreed to plead guilty or pleaded guilty and went to prison.”
Wisconsin DNR offers Assistance
Last year, the Wisconsin Department of Natural Resources (DNR) enacted a project looking to restore former 5R sites.
Lawmakers unanimously passed a bill that will provide the DNR with up to $2.5 million for this purpose, expecting it to be concluded by June 30th, 2023. This clean-up initiative will focus on both publicly and privately owned properties.
For a cost of more than $1 million, clean-up of the land in Tennessee has already been completed at the owner’s expense.
Court Ordered Restitution
Under the terms of Shibilski’s plea deal, he is required to pay a total of $200,000 for necessary cleaning initiatives. $100,000 to the Department of Natural Resources, and an additional $100,000 to Tennessee property owner, Paint Oak LLC.
