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Shorting the IRS lands Shakopee man in a workhouse

  • Article by: PAUL WALSH
  • Star Tribune
  • September 11, 2012 - 11:09 PM

A onetime Shakopee businessman has been sentenced to a workhouse for diverting nearly $1 million in taxes due to the IRS from his company over a time when he earned a six-figure annual income and collected vintage cars and motorcycles.

Stephen P. Clough, 65, of Minnetonka, was sentenced in federal court in St. Paul to four months in the workhouse, three years of probation and fined $25,000 for failing from 2003 to 2010 to pay federal income and employment taxes from workers at Gamma Vacuum, which makes industrial pumps and vacuums.

Clough's long-running crime resulted in losses to the IRS totaling more than $944,000. He pleaded guilty in May, and the company paid the employment portion.

In arguing to the court for prison time, prosecutors noted that Clough's personal wealth grew to more than $2 million and his income at Gamma was about $500,000 for each of last three years he worked there.

He also owned two homes, several vintage cars and motorcycles, and had a personal cash reserve.

Clough's defense countered in a presentencing motion that Clough should receive home confinement because his crime was motivated by trying to keep the company viable.

His defense also argued for leniency because of Clough's service to his community as a youth hockey coach in Hopkins and an assistant Sunday school director for his church.

Paul Walsh • 612-673-4482

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