Fugitive tax ‘pirate’ sentenced to prison
SAN ANTONIO — A tax protester who fancied himself as a pirate was ordered Friday to dry dock for 41 months for dodging more than $400,000 in taxes before fleeing to Mexico in 2005.
Chief U.S. District Judge Fred Biery imposed the prison sentence on Sterling R. Benningfield, 66, and also ordered him to pay $422,302 in restitution — what he owed in taxes between 1998 and 2000.
“He saw himself as a pirate, always working against the establishment and the government,” Assistant U.S. Attorney Tom McHugh has said.
McHugh said Benningfield’s pirate fixation extended to flying the Jolly Roger at both his home and office, the latter of which was fixed up to resemble a frigate — right down to wooden planks.
After nine years on the run, Benningfield pleaded guilty July 3 to a single count of tax evasion.
“Let today’s sentencing of Mr. Benningfield serve as a reminder that there are serious criminal penalties for those who choose to create elaborate schemes to conceal their income and evade the taxes that they owe,” said William Cotter, acting special agent in charge of the Internal Revenue Service’s Criminal Investigation Division in San Antonio. “Those who believe they can steal from the American taxpayer and then flee the country to avoid facing the penalties of their criminal actions will be aggressively pursued, no matter how long it takes, and brought to justice.”
Benningfield ran several companies, including one at the center of his woes with the IRS: Federation of Associated Health Systems Inc.
He also set up a shell company, VACCO Inc., that he used in the tax evasion. He would send payments from FAHS to VACCO, then used the money from VACCO for personal and living expenses.
“VACCO had no business purpose and was used by Benningfield to conceal income received from FAHS,” his plea deal states.
In June 2000, he sold FAHS to Carnegie International Corp., which retained him as a consultant at the rate of $150,000 per year. Under his instructions, the consulting fees were paid to VACCO.
Benningfield admitted he kept a lot of information from his accountant and that he placed funds in the names of his sister and daughter to conceal his lifestyle and spending.
When the charges became public in 2005, Benningfield no longer was living in Helotes. He fled to Mexico and was listed as a fugitive until earlier this year. After his story aired on local television in February, investigators received a tip that he was back in town to receive health care treatment. He was arrested at that time.
