A former Harrisburg-area businessman who went from wealth to financial ruin is now headed for federal prison in a tax fraud case.
U.S. Middle District Chief Judge Christopher C. Conner on Monday sentenced Paul M. Biko, 66, to 18 months behind bars for failing to forward federal income taxes he collected from employees of his businesses to the IRS.
Conner also ordered Biko to pay $437,338 in restitution to the government.
Biko’s sentencing occurred nine months after he pleaded guilty to the tax fraud charge. His plea agreement contained a provision that similar counts would be dismissed against his daughter, Maura Whetsel, in return for his own admission of guilt.
The federal counts against Biko, a former president of the Colonial Country Club, involve frauds committed with Clearview of Harrisburg, Clearview Landscaping and Clearview Builders.
Conner imposed the jail term after hearing from a parade of Biko’s supporters, including friends, neighbors and Biko’s son. All described Biko as a caring and giving man who worked to help support worthy causes such as cancer research. They said the former insurance salesman got out of his depth when he started multiple businesses.
“These were businesses for his friends, his family,” Biko’s son, Leonard, told the judge. “All he wanted was to give other people the opportunity to succeed.”
Assistant Federal Public Defender Heidi Freese said Biko had been warned there were tax problems with his firms. “Instead of taking care of the problem he buried his head in the sand,” she said.
The criminal case not only cost Biko his businesses and his house, it has put great stress on his health, said Freese, who asked Conner to show mercy to a man who “needs to completely rebuild his life.”
“At the end of the day, he doesn’t blame anyone else,” she said.
“I pled guilty because it was my fault,” Biko told the judge. “I want the chance to pay everything back.”
Assistant U.S. Attorney Joseph Terz urged Conner to impose at least a 2 1/2-year prison term. Biko’s crime was hardly accidental, the prosecutor said.
“This was not about bad judgment. It’s not about neglect,” Terz said. “What this case is about is criminal attempt..He stole these monies.”
Conner agreed that Biko’s case wasn’t a matter of “simple negligence,” since his own accountant and bookkeeper told Biko about the failure to remit the tax money to the IRS. The judge cited evidence that Biko spent at least some of the money due on the taxes for personal expenses, including his daughter’s wedding.
Still, Conner credited Biko for his past good deeds and said he took into account his age and health issues.
“I’m convinced Mr. Biko’s criminal actions are behind him,” Conner said. “Mr. Biko has clearly learned a difficult lesson.
Conner ordered Biko to begin serving his prison sentence on Oct. 20. Biko must serve 2 years on probation after his release from prison and must pay his restitution in installments of at least $150 a month.
Monday’s hearing marked the second time Biko appeared before a judge to be sentenced in a tax fraud case.
In November, a Dauphin County judge sentenced him to repay $100,000 to the state and serve 5 years of probation for failing to remit sales and income taxes collected through three other businesses: Bruster’s of Central Pennsylvania, Strategic Market Resources and Luxury Limousine of Harrisburg. Biko pleaded no contest in that case.