By Pat Maurer
Correspondent
According to a February 23rd, 2022 press release, Kurt Walls, the former owner of the Days Inn in Clare, and Harold Walls, the former manager of the Hotel, each pled guilty that day, in the US District Court for the Eastern District of Michigan, to Internal Revenue Service charges resulting from an Internal Revenue Service investigation into tax fraud and witness tampering.
Both were indicted last spring. An April 2, 2021 press release, from the US Department of Justice, Office of Public Affairs, said Harold Walls, according to the indictment returned March 3rd, had managed day-to-day operations of the Days Inn Clare, which was then owned by his father Karl Walls.
The indictment alleged that he, rather than paying himself regular wages, “caused himself to be paid by other means, including by paying personal expenses from the hotel’s operating account.”
The indictment also said he filed individual income tax returns for the years 2013 through 2017 that didn’t report “any income from the hotel, but did report income from his employment as a professor of hospitality management and income from the rental of farmland.”
Last week’s press release said, “According to court documents, Harold, 58, [also] provided false and incomplete information to the hotel’s tax return preparer for 2012 through 2017, resulting in the hotel’s business income being understated, that he didn’t disclose to the tax return preparer that the hotel had 11 “off book” rooms that were “not tracked in the hotel’s reservation system,” and that he provided documents to the tax preparer “that overstated the amount of property taxes the hotel had paid to the City of Clare.”
The release continued, “After the IRS began its investigation, Harold Walls obstructed the investigation by instructing a hotel employee to make false statements to the IRS about the nature and extent of his work at the hotel. He also denied to IRS special agents that he was employed at the hotel.”
“His father, Karl Walls, 86, also obstructed the investigation of his son,” the release said, “by directing two witnesses to lie to the grand jury.”
The release said that in “October, 2018, two days before a former hotel employee was scheduled to provide grand jury testimony, Karl Walls instructed the employee to testify that Harold Walls did not work at the hotel,” and that he also tried to convince his tax return preparer “to make a similar false statement to the grand jury about his son’s employment status.”
According to the 2021 indictment, Karl Walls “reported income and expenses for the Days Inn of Clare on Schedules C attached to his individual tax returns.”
Both men are scheduled to be sentenced at a later date. Harold Walls is facing up to three years in prison for filing a false tax return; and Karl Walls faces up to 30 years in prison for witness tampering.
Both will also face supervised release, restitution and fines. A federal district court judge will determine their sentences “after considering the U.S. Sentencing Guidelines and other statutory factors.”
Trial Attorney Melissa S. Siskind and Sam Bean of the Tax Division are prosecuting the case.
The hotel was sold in 2018 and has been renamed as a Quality Inn.