NatureRich Founder Convicted For Tax Evasion

 

Long time tax protestor and founder of NatureRich, Inc. a multilevel marketing company that sells natural and health-related products has been sentenced to five years in prison for running up and snubbing a bill of more than $600,000 in back taxes, interest and penalties.

The sentencing of Michael A. Schlegel, last week in a federal court in Minneapolis follows his conviction by a jury on three counts of tax evasion, three counts of failing to file tax returns and conspiracy to defraud the federal government. A determination on what restitution Schlegel is liable for, if any, has yet to be determined by the court.

While held in federal custody in the Sherburne County jail, Schlegel, co-founder of NatureRich Inc., made good on his vow upon conviction and filed an appeal the next day.

Prosecutors said Schlegel failed to pay down any of what he owed the government in 2000 and also failed to file federal individual tax returns for tax years 2002-09, pursuing what the U.S. attorney’s office in Minnesota characterized as “tax protester” ideologies.

“There is nothing that requires me to file an income tax return,” Schlegel said at the time of his conviction last year. “There is no law.”

By the time he was convicted, Schlegel no longer operated NatureRich but remained a distributor.

A 2007 article in the Star Tribune said the multimillion-dollar Maple Grove-based nutritional supplement company made natural, toxin-free soaps, deodorants, nutritional shakes and other products.

Together, Schlegel and partner Bradley Collin collected wages and commission payments exceeding $400,000 in those years, prosecutors said. Schlegel also had NatureRich pay his commissions to the “Andrew James Living Trust,” from which he paid his family’s expenses. During that time, Schlegel ran a painting business that earned more than $400,000.

By using various bank accounts to conceal income and filing misleading federal corporate tax returns, the defendants attempted to conceal at least $3 million in gross income from the IRS, prosecutors said.