JOHNSTOWN - Two former executives of a Duncansville bulk-mailing company have pleaded guilty to filing false tax returns, according to the U.S. Justice Department.
Michael Herman of Hollidaysburg, the founder and one-time president of North American Communications, failed to report $9,873,745 in taxable income for 2007 and 2008, resulting in a loss of $655,934 in income tax to the IRS, according to U.S. Attorney David J. Hickton.
Also pleading guilty to falsifying his tax returns in 2007 and 2008, leaving out $4,787,222 in taxable income, was company executive Robert Paltrow, of Palm Beach, Fla. Paltrows filing shorted the IRS $798,969, the Justice Department noted.
Paltrows attorney, Mark B. Sheppard, said Paltrow has already paid back the taxes owed and that both men have left the company to distance it from the situation. The two executive face up to six years in federal prison and a fine of up to $500,000.
"Mr. Paltrow's accepting responsibility for his actions and he's doing everything he can to make it right," the Philadelphia-based Sheppard said Monday. "Both he and Mr. Herman, they stepped up and tried to do the right thing by accepting responsibility."
U.S. District Judge Kim R. Gibson will sentence Herman and Paltrow on Sept. 30 at 10 a.m.
North American Communications, an international direct marketing firm, announced in early April the company would add 100 new jobs through 2014, after already adding nearly 60 jobs since September.