Thursday, January 18, 2018
News Roundup

Cast-Crete president said he did not want to file inaccurate returns

TAMPA — One by one, the prosecutor took John D. Stanton III through the tax returns he hadn't filed for himself and his company, Cast-Crete Inc.

Stanton said he simply couldn't file the taxes because a series of complex business deals affecting Cast-Crete's bottom line made doing so impossible.

Better to file late, he said, than to file inaccurately.

Stanton, 64, former president of the building-supply company, testified in his federal tax trial Friday, providing his first public explanation about why he took tens of millions of dollars out of Cast-Crete while corporate and personal tax returns were not filed.

After a week of testimony, closing arguments are scheduled Monday with jurors getting the case by that afternoon.

Stanton is charged with failing to file Cast-Crete's and his own tax returns for multiple years after 2002. Also charged with obstructing the IRS, he faces 15 years in prison if convicted.

Stanton testified for five hours wearing an ill-fitting jacket, hardly looking the part of the former president of a company with $160 million in profits from 2001 to 2007.

Tax cases can be complex nightmares. But prosecutor Robert Monk has maintained to jurors this case is really quite simple. Tax returns were required to be filed and they were not, he said.

Monk noted to Stanton that the difficulties filing the tax returns hadn't prevented him from taking millions of dollars out of Seffner-based Cast-Crete.

Stanton had little choice but to agree: It hadn't.

Stanton told jurors he had worked for years on a complex set of business deals, attempting to merge a slew of unprofitable companies with Cast-Crete, so Cast-Crete could claim their losses and erase its tax liability.

But those deals, he said, were "never completed. So the taxes couldn't be filed properly."

Stanton, who noted he wasn't the only Cast-Crete officer responsible for the company's corporate taxes, said he didn't want to file Cast-Crete and his own taxes for fear the numbers would be inaccurate.

And after the 2008 death of Ralph Hughes, Cast-Crete's chairman of the board, the bank acting as the trustee for Hughes' $50 million estate refused to allow him to handle company taxes.

Stanton said Hughes was fully aware why Cast-Crete's taxes hadn't been filed and agreed they shouldn't be.

"Ralph Hughes was one of the brightest people I ever met," Stanton testified. "He was very smart, very tough. … I found him a very valuable partner for running ideas by."

Stanton said much of the more than $43 million he collected from Cast-Crete after 2001, either directly or to a holding company he controlled, was used to buy unprofitable businesses that would shield Cast-Crete from a big tax liability, he said.

But Monk asked Stanton if he bought personal items, including luxury automobiles, and made big payments to family members from that fund.

Stanton admitted he had.

Stanton also said a tax-redemption agreement involving Hughes also was delayed, providing another reason for not filing. "We were in limbo," he said.

Stanton denied that he obstructed the IRS, saying Cast-Crete's financial controller, who later admitted embezzling money from the company, had access to corporate records sought by the IRS.

Stanton often refuted statements and behavior attributed to him by the testimony of other witnesses.

"I recall a lot of testimony," he said, "that Mr. Stanton did something that Mr. Stanton didn't do."

William R. Levesque can be reached at [email protected]

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