Local doctor gets 18 months in prison for income tax evasion

A local doctor who admitted to failing to pay more than $900,000 in federal income taxes over more than decade was sentenced to 18 months in prison and must replay the taxes along with interest an penalties.

Werner Grentz, 64, who worked as an independent physician contractor at the hospital and also a medical office in London, was facing five years in prison and a fine of up to $250,000 after pleading guilty to one count of tax evasion.

Based on a presentence investigation, which took into account things such as his criminal history, the recommended prison sentence was 30 to 37 months and a fine of $6,000 to $60,000.

Under federal law, the judge is not bound to sentence within that range.

“The crime involves a significant amount of money and was committed by a person that, to use a colloquialism, should have known better,” said U.S. District Court Judge Gregory Van Tatenhove.

I don’t know who else to say it but that you just should have known better.”

When given the opportunity to address the court, Grentz broke down in tears as he apologized and asked the court for mercy.

“I would like to apologize to my family, to my friends, to the community and to my patients who put their trust in me for the way I let them down,” Grentz said.

“This experience has been life changing,” Grentz said of the investigation, indictment and subsequent court proceedings. “Neither you, nor any other judge will ever see me in court again.”

In arguing for the court to be lenient, Grentz’s attorney, Michael Murphy, noted that Grentz had not used the money to support an addiction or on frivolous items, but had, instead gone to various charitable causes.

In addition, Murphy noted that Grentz had voluntarily surrendered his license to practice medicine and would need to go through the recertification process to regain his license. Grentz must wait two years to begin that process.

“The financial devastation will probably follow him to his grave,” Murphy said of Grentz.

While acknowledging the positives of what Grentz did with the money, Van Tatenhove noted that one of the purposes of the sentence is to promote respect for the law.

“If defendants can look at this case and see tax evasion as a crime where you only have to pay when you get caught, that is not going to promote respect for the law,” Van Tatenhove said.

Van Tatenhove added that believed Grentz when he said he was remorseful and he was taking that into consideration in sentencing him to 18 months in prison. That will be followed by three years of supervised release with the first six months being done on home incarceration.

Van Tatenhove waived any fines, noting this case calls for Grentz to pay the fines and penalties.

At the defense’s request, Van Tatenhove recommended that Grentz be permitted to serve his prison sentence at the Federal Medical Center in Lexington.

Because of Grentz’s he is not a danger to himself or others and because he is deemed not to be flight risk, Van Tatenhove permitted Grentz to report to serve his sentence on his own instead of being taken into custody immediately. Grentz will report to the facility specified by the bureau of prisons on July 30.

Grentz was indicted by a federal grand jury in April 2012 on six counts of failing to file a federal income tax on more than $1.5 million that he earned between 2005 and 2010.

A plea agreement was entered in the case on April 17.

According to the plea agreement, Grentz will plead guilty to count five of the indictment, which accuses him of not filing an income tax return for the 2009 tax year. The agreement states he received a taxable income of $356,073 that year.

“Grentz made affirmative attempts to evade and to defeat the tax by causing his compensation to be deposit into bank accounts that he had opened in the names of two shell companies and by withdrawing the deposited money from the accounts on the same day or within a few days after the compensation had been deposited into the accounts,” the plea agreement stated.

Grentz has agreed to pay restitution to the IRS in the amount of $900,068.