Thursday morning, a federal judge ordered Kenneth Gaipa to spend two years in prison after he pleaded guilty in February to Social Security and bank fraud as well as tax evasion. Gaipa owns Kenneth G Rare Coins in Mishawaka and Goshen. Both stores remain open for business.
From 2008 to 2010, Gaipa filed false tax returns to the Internal Revenue Service … "significantly under-reporting" income for himself, his wife and his business.
He also admitted to skimming cash from the business and failed to disclose to his tax return preparer that significant amounts of his personal expenses were run through the business as "business expenses."
In February, Gaipa admitted to a judge he lied to the Social Security Administration, saying he hadn’t worked between February 2006 and June 2011 when, in fact, he was earning “substantial profits” at his business. He did this so he could continue to receive Social Security Disability payments in an amount greater than was due and when no payment was authorized.
United States Attorney Donald Schmid asked the judge for leniency in sentencing Gaipa since he accepted responsibility for his actions.
According to sentencing guidelines, Gaipa could have received up to 25 years in prison and could have been made to pay about $1.25 million in fines, plus the roughly $368,000 he owes the IRS.
In Thursday’s sentencing it was noted that after prison, Gaipa will have two years of supervised release. He also has a $30,000 fine and is suppose to pay the IRS more than $315,000.