Paul Fox, the firm's former controller, is cooperating with federal prosecutors.
A high-level former employee of Twin Cities water park developer Jeff Wirth pleaded guilty Thursday in federal court to filing a false income tax return and wage report, and is cooperating with authorities.
Paul W. Fox, 47, of Coon Rapids, is one of four people charged in what prosecutors describe as a multiyear scheme to manipulate the finances of Wirth's real estate companies, draining money for personal uses and evading taxes. In one instance, more than $2 million was allegedly funneled to buy lakeshore property and build Wirth's unfinished mansion on Lake Minnetonka, and never reported as income.
Wirth, head of the Wirth Cos. in Brooklyn Center, his former wife and colleague Holly Damiani and their tax preparer, Michael J. Murry, were indicted in August on tax-related charges. They pleaded not guilty. A trial date for all three has been set for April 23.
Fox, a former Wirth Cos. executive, was charged Dec. 1 with the one misdemeanor count.
On Thursday, Fox told U.S. District Judge Ann Montgomery in Minneapolis that he knowingly did not include car payments his employer made on his personal vehicle when he filed a Form W-2 wage report and income tax return in 2006, understating his taxable wages. Fox faces up to one year in prison for the misdemeanor, as well as one year of supervised release and a fine of $2,000 to $20,000.
That could be reduced because he's agreed to cooperate with law enforcement officials, Montgomery said. Fox also will be required to pay restitution of $33,536 for taxes, penalties and interest.
Assistant U.S. Attorney Bill Otteson did not indicate whether anyone else would be charged in the case.
Fox said he has an accounting degree from the University of Minnesota, and worked for the Wirth Cos. for 14 years, from 1995 to 2009. For about a decade he was controller in charge of accounting, and reported to Damiani, then chief financial officer. He went on to become director of operations and vice president.
He testified that from 1995 to 2005 the company made car payments totaling $45,600 on his personal car, payments that were excluded from his gross wages. Such car payments were a common practice at the company, he said.
Wirth's highest-profile projects include the Water Park of America near the Mall of America, the Water Park at Grand Rios in Brooklyn Park and the luxury Grand Hotel Minneapolis downtown.
Wirth, Damiani and Murry were all charged in August with conspiracy to defraud the federal government. Wirth and Damiani were charged with additional counts of filing false tax returns, and Murry was charged with procuring false tax returns.
Jennifer Bjorhus • 612-673-4683