James Phillip Scholten, a 51-year-old resident of Byron Center, Michigan, has pleaded guilty to federal tax evasion. The announcement was made by Timothy VerHey, U.S. Attorney for the Western District of Michigan. Scholten is scheduled to be sentenced on May 12, 2026, by United States District Judge Jane M. Beckering and faces up to five years in federal prison.
According to court documents, Scholten was charged with one count of tax evasion. He admitted that from 2011 through 2024 he regularly sold scrap metal, earning approximately $3.4 million in additional income during that period. Despite using a Certified Public Accountant (CPA) to prepare his tax returns, Scholten failed to disclose his recycling income or provide related payment records to his accountant. As a result, the tax returns he filed from 2011 through 2023 were false.
For example, in 2021 Scholten reported owing only $2,465 in federal income tax when he had actually received an additional $610,818 in taxable income from recycling payments that year alone. This resulted in an additional $172,618 in taxes owed for that year.
Scholten has agreed to pay $868,707 in taxes due to the United States.
U.S. Attorney VerHey stated: “Everyone must pay the full amount of income tax they owe. Those who evade the assessment or payment of taxes by willfully and intentionally not complying with their legal responsibility pose a threat to proper tax administration and impede the prosperity of our nation.”
Karen M. Wingerd, Special Agent in Charge of IRS-CI Detroit said: “Tax evasion is not a victimless crime, as it is the American public who is affected when tax dollars—money that funds essential public services like defense, roads, and education—are dodged. Scholten deliberately withheld income so he didn’t have to pay his fair share. Now he will not only pay his taxes but will face the consequences of willfully not doing so from the start.”
The case was investigated by IRS Criminal Investigation and is being prosecuted by Assistant U.S. Attorney Chris O’Connor.
