75ºF

Michigan real estate developer indicted for tax, bank fraud

Scott Chappelle is accused of making false statements to the IRS

A gavel
A gavel (WDIV)

GRAND RAPIDS, Mich. – A federal grand jury returned an indictment charging a Michigan businessman with tax evasion, filing false documents with the Internal Revenue Service (IRS), making false statements to IRS Criminal Investigation agents, and mortgage fraud.

According to the indictment, Scott Allan Chappelle, of Okemos and East Lansing, Michigan, was an attorney and former Certified Public Accountant who operated Terra Management Company LLC, Strathmore Development Company Michigan LLC, and Terra Holding LLC, companies involved in real estate development and property management.

Chappelle is accused of failing to pay over to the IRS employment taxes that were withheld from the wages of the companies’ employees. Chappelle is also accused of evading a payment of more than $830,000 in unpaid taxes by making false statements to the IRS about his and his companies’ assets.

He’s also charged with making false statements to IRS-CI agents during its criminal investigation. He’s accused of telling investigators that he hadn’t personally purchased any real estate during the last three years -- but he had purchased a condominium in East Lansing and a house in Powell, Ohio.

He’s accused of falsely telling investigators that the condominium was for his son and was paid for with student loans. He’s also charged with filing a tax return for Terra Holdings on which he falsely claimed the company had no employees.

The indictment also charges that Chappelle made false statements and submitted fraudulent documents to a bank when refinancing his lake house mortgage. Chappelle allegedly falsely represented that he was not a party to a lawsuit or owed any federal debt.

Chappelle is also alleged to have submitted fraudulent bank statements that showed a substantially higher balance in an account than the account actually had at that time.

If convicted, Chappelle faces a maximum term of imprisonment of five years for tax evasion and making a false statement, three years for filing a false document with the IRS, and 30 years for bank fraud (the mortgage fraud scheme).


About the Author: