One of the owners of Gamma Vacuum in Shakopee has pleaded guilty in federal court in St. Paul to failing to pay nearly $1 million in federal income and employment taxes. Stephen Paul Clough pleaded guilty May 7 to one count of willful failure to pay over tax. Clough was charged on April 27.
On May 15, an official with the U.S. Attorney's Office in Minnesota said Clough is no longer affiliated with Gamma Vacuum. It is unknown exactly when Clough left the company – only that he was fired after company officials found out about the misconduct, the attorney's office said.
In his plea agreement, Clough admitted that from 2003 to 2010, he failed to pay the Internal Revenue Service (IRS) appropriate income and employment taxes withheld from the wages of the employees at the company. Clough was solely responsible for Gamma Vacuum’s bookkeeping, including the withholding and payment of payroll taxes. Instead of making those payments, he admittedly used the funds to pay company expenses. Gamma Vacuum, located at 2915 133rd St. W. near Louisville Lanes, manufactures pumps and related products. Clough’s criminal behavior resulted in a tax loss to the IRS of $944,134.29.
Clough faces a maximum of five years in prison. This case is the result of an investigation by the IRS-Criminal Investigation Division. It is being prosecuted by Assistant U.S. Attorney William J. Otteson.
During this time period, Clough gave money to his alma mater, Michigan Tech, to endow a scholarship, according to the school's alumni publication and website.