A former high-level employee of now-imprisoned Twin Cities water park developer Jeffrey Wirth has avoided incarceration after admitting to filing a false income tax return and wage report.
Paul W. Fox, 48, of Coon Rapids, was sentenced last week in federal court in Minneapolis to three years of probation and 300 hours of community service. Fox also was ordered to pay $35,536 in restitution to the IRS. He pleaded guilty last December.
Fox was one of four people implicated in what prosecutors described as a multiyear scheme to manipulate the finances of Wirth's real estate companies, draining money for personal uses and evading taxes. The case is considered to be one of the largest tax conspiracies ever in Minnesota.
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.
Fox admitted in court to knowingly not including car payments that 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 had faced up to one year in prison for the misdemeanor, as well as a year of supervised release and a fine of $2,000 to $20,000.
His cooperation with authorities in the larger investigation resulted in him avoiding prison time, according to court documents.
Fox worked for the Wirth Cos. for 14 years, from 1995 to 2009. For about a decade he was controller in charge of accounting. He went on to become director of operations and vice president.
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, who was 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 2011 on tax-related charges.
Wirth was recently sentenced to 4 1/2 years in federal prison and ordered to pay $6.45 million in restitution after pleading guilty to conspiring to evade paying federal taxes.
Damiani, who is divorced from Wirth, was sentenced to three months in federal prison after pleading guilty to filing a false federal individual income-tax return.
Murry was convicted and sentenced to 18 months in prison and fined $50,000 for preparing a false corporate tax return for the fallen commercial real estate firm.
Paul Walsh • 612-673-4482