Wayzata resident Michael Tobak, 55, has been sentenced to two years in federal prison for hiding payments received by his nonprofit and falsifying tax documents.
Tobak, who once ran International Health Care Services, a Golden Valley-based home health care agency, pleaded guilty to tax fraud in November and was sentenced June 29 in U.S. District Court in Minneapolis.
According to documents filed in court, Tobak obtained approximately $3.3 million in income between 2006 and 2013 from the nonprofit that he did not report on his individual income tax returns.
In pleading guilty, Tobak admitted to willfully filing false income tax returns, causing a total tax loss for all eight years of nearly $1.4 million. He will be required to pay all outstanding taxes, interest and penalties.
The case is the result of an investigation conducted by the Criminal Investigation Division of the Internal Revenue Service.
According to court documents, Tobak maintained two business bank accounts that were used to receive payments for services that International Health Care Services provided to Medicaid beneficiaries and purposefully omitted from accounting records the activity in one of those bank accounts. Tobak then used the business income received in that bank account to make payments on his home mortgage, pay personal credit card debt and to transfer money to other accounts he controlled, including large transfers to personal investment accounts.
The Minnesota attorney general’s office began investigating Tobak and International Health Care Services in August 2016. According to a court filing by Attorney General Lori Swanson, Tobak and his family used money from the nonprofit to fund shopping trips and to pay six-figure salaries to himself and family members.
Tobak’s sentence also requires a year of supervised release after he leaves prison.