Date: May 8, 2024 Contact: newsroom@ci.irs.gov Akron, OH — On May 1, 2024, Donald R. Martin was sentenced by United States District Judge Donald C. Nugent to 12 months and one day on prison, along with 36 months of probation, and ordered to pay restitution of $1,882,789 after pleading guilty. According to court documents, Martin worked for his father’s railroad scrap company that contracted with railroad companies to remove worn-out railroad track and sold the track to scrap companies. The railroad companies required advance payment from Martin’s father’s company before the track was removed. Martin was responsible for obtaining short-term loans from private investors to finance the advance payment to the railroad companies. Typically, Martin’s father’s company repaid the loans in full after the job was complete and payment for the scrap was received. According to court documents, in or around January 2013, Martin began misappropriating the company’s short-terms loans by depositing them into several bank accounts he owned or controlled. In some instances, Martin either used company funds to repay the short-term loans or repaid a portion of the loans from a bank account he owned or controlled. In other instances, the misappropriated loans were not repaid to the investors. According to court documents, Martin took control of business operations in 2014 after his father became ill. This control allowed Martin to continue his scheme to defraud the company and the investors. From around January 2014 through December 2016, Martin continued to use the company to fraudulently secure business loans from private investors under the guise that the loans would be used to fund business operations. Instead, Martin used portions of the company’s loan to pay personal expenses and acquire personal assets. To avoid paying taxes on the embezzled funds, Martin filed fraudulent Forms 1040 for tax years 2013 -2016 and failed to report $4,919,541 in total over the four tax years. As a result of Martin filing false tax forms, he created a tax deficiency on his accounts for these years totaling $1,287,769. Martin pleaded guilty to four counts of making and subscribing a false tax return in January 2024. The investigation was conducted by IRS Criminal Investigation (CI). The case was prosecuted by Assistant U.S. Attorney Edward D. Brydle. CI is the criminal investigative arm of the IRS, responsible for conducting financial crime investigations, including tax fraud, narcotics trafficking, money-laundering, public corruption, healthcare fraud, identity theft and more. CI special agents are the only federal law enforcement agents with investigative jurisdiction over violations of the Internal Revenue Code, obtaining a more than a 90 percent federal conviction rate. The agency has 20 field offices located across the U.S. and 12 attaché posts abroad.
