Missouri News: Jury Convicts Former Kansas City Business Owner, Barrett Prelogar, of Tax Crime

KANSAS CITY, MO (STL.News) – An owner of a former Kansas City business, Barrett Prelogar, 48, was convicted by a federal trial jury today of corruptly endeavoring to impede the due administration of the internal revenue laws.

Prelogar was a founding par tner of the now-defunct Winntech Digital Systems, Inc.  The company primarily produced electronic displays used in stores or at trade shows.

Prelogar failed to pay over to the government the payroll taxes withheld from Winntech employees’ paychecks in 2002 and 2003.  He then obstructed the TRS’s collection process of the Trust Fund Recovery Penalty, which had been assessed against him personally for the unpaid trust fund taxes of Winntech.  He also obstructed the IRS’s collection of the income taxes he owed for 2008.

On Oct. 28, 2009, Prelogar filed his 2008 tax return.  The return reported over $500,000 in gross income and a tax due and owing of $120,103.  Prelogar did not submit any payments with the 2008 tax return.  Yet, from November 2009 through April 2011, he paid a total of more than $362,000 towards a house at the Lake of the Ozarks, a house near the Plaza in Kansas City, Mo., a house in Leawood, Kan., a Porsche, a Jeep, and a boat.  During that time, he made no payments on his 2008 tax debt.

Subsequently, Prelogar engaged in several strategies from May 2011 to March 28, 2016, to obstruct the collection of taxes and penalties he owed to the government.  Prelogar used corporate funds to pay his personal expenses, structured cash withdrawals from Winntech’s bank account to avoid federal bank reporting requirements, and cashed his payroll checks from his wife’s company, Bare Skull Innovation, LLC, rather than placing the money into a personal bank account, all to avoid IRS collections.

Following the presentation of evidence, the jury in the U.S. District Court in Kansas City, Mo., deliberated for approximately 3 1/2 hours before returning the guilty verdict to U.S. District Judge Stephen R. Bough, ending a trial that began Monday, April 1, 2019.

Under federal statutes, Prelogar is subject to a sentence of up to three years in federal prison without parole.  The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendant will be determined by the court based on the advisory sentencing guidelines and other statutory factors.  A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.

This case is being prosecuted by Assistant U.S. Attorney Paul S. Becker and Trial Attorney David Zisserson of the U.S. Department of Justice’s Tax Division.  It was investigated by IRS-Criminal Investigation.