HOUSTON — This is an official press release from the U.S. Department of Justice (USAO - Texas, Southern), published as received.
HOUSTON – The former president of a local pipe and tubing company has pleaded guilty to tax evasion and bankruptcy fraud, announced U.S. Attorney Nicholas J. Ganjei.
John Philip Tharp served as president of Bendco, a Pasadena-based company that specialized in bending pipes, tubes and other metal materials for oil and structural applications. The company filed for bankruptcy in February 2018.
Tharp admitted to embezzling funds by diverting and cashing customer payments at local businesses. He also directed Bendco to issue fraudulent checks payable to cash, fictitious vendors or companies with no legitimate business ties. To conceal the theft, Tharp altered the company’s financial records, including by deleting invoices.
“Bankruptcy exists to shield those that find themselves in dire financial straits, and to give people fresh starts,” said Ganjei. “When somebody commits bankruptcy fraud, they’re abusing this legal protection, and cheating those that lent them money, goods, or services. Here, through his duplicitous acts, the defendant unfortunately turned a messy financial situation into a criminal matter.”
“When you cash checks intended for your business, put it in your personal account and hide the evidence, it’s fraud. When you declare bankruptcy and fail to report the checks, it’s bankruptcy fraud. When you fail to file your tax returns and try to conceal how much you would owe, it’s tax evasion,” said acting Special Agent in Charge Lucy Tan of IRS Criminal Investigation’s Houston Field Office. “These financial laws are pretty simple to understand, which makes it easier for our special agents to prove your criminal intent. You know you’re breaking the law and we know we’ll catch you.”
According to court documents, Tharp carried out the scheme while Bendco was in bankruptcy proceedings. As part of that process, the company was required to deposit all incoming funds into a Debtor in Possession (DIP) account. Tharp admitted he caused Bendco to file false monthly operating reports to the bankruptcy court, falsely stating that all funds had been deposited into the DIP account.
He acknowledged his embezzlement resulted in a loss of $413,480.
Tharp also admitted he failed to file a 2018 tax return and willfully evaded payment of $126,430 owed to the IRS.
U.S. District Judge Andrew S. Hanen will impose sentencing Sept. 22. Both counts of bankruptcy fraud and tax evasion carry a sentence of up to five years in prison. Tharp also agreed to pay $413,480 in restitution to Bendco and $126,430 to the IRS.
He was permitted to remain on bond pending that hearing.
IRS Criminal Investigation conducted the investigation. Assistant U.S. Attorneys Shirin Hakimzadeh and Brad Gray are prosecuting the case.
