Fayette County Man Previously Convicted of Violating Clean Water Act Sentenced to Prison for Filing False Tax Return

CHARLESTON, W.Va. - Michael Graves, 70, of Charlton Heights, was sentenced today to six months in prison and ordered to pay $266,053 in restitution for filing a false tax return. Graves admitted to causing tax losses totaling $266,053 by underreporting his income.

According to court documents and statements made in court, on November 15, 2021, Graves filed a Form 1040, U.S. Individual Tax Return for tax year 2016 that falsely listed his income as $816. Graves' actual tax income for 2016 was approximately $427,256, and his false tax return resulted in a tax loss to the Internal Revenue Service of approximately $125,285.

As part of his guilty plea, Graves admitted to filing the false tax return for 2016. Graves further admitted that he falsely listed his annual income as $816 on tax returns for years 2017 to 2020, that the total amount of income he failed to report on his returns from 2016 to 2020 was approximately $1,035,419, and that the total tax liability that he wrongly withheld from the U.S. Treasury Department from 2016 through 2020 was approximately $266,053.

During the time period, Graves owned and operated West Virginia Environmental Services, Inc. (WVES). Graves and WVES were paid over $9.8 million from 2006 to 2020 to accept industrial waste at a Fayette County landfill and treat the resulting contaminated liquid or leachate. On February 22, 2023, Graves pleaded guilty as an individual and on behalf of WVES to violating the Clean Water Act, admitting they failed to maintain the landfill's leachate collection for several years beginning in at least 2016. This failure by Graves and WVES caused the discharge of toxic pollutants including arsenic, hexavalent chromium, and selenium into Jarrett Branch, a tributary that flows into the Kanawha River near Alloy. On December 21, 2023, Graves was sentenced to one year of incarceration, to be served on home confinement as part of a five-year term of federal probation, and fined $10,000. WVES was fined $500,000 and placed on corporate probation for three years.

United States Attorney Moore Capito made the announcement and commended the investigative work of the Internal Revenue Service-Criminal Investigations (IRS-CI). The Criminal Investigative Division of the U.S. Environmental Protection Agency and the West Virginia Department of Environmental Protection investigated the Clean Water Act violations, which brought the false tax returns to light.

The Department of Justice has created the National Fraud Enforcement DivisionLinks to other government and non-government sites will typically appear with the "external link" icon to indicate that you are leaving the Department of Justice website when you click the link.. The core mission of the Fraud Division is to zealously investigate and prosecute those who steal or fraudulently misuse taxpayer dollars. Department of Justice efforts to combat fraud support President Trump's Task Force to Eliminate Fraud, a whole-of-government effort chaired by Vice President J.D. Vance to eliminate fraud, waste, and abuse within Federal benefit programs.

United States District Judge Thomas E. Johnston imposed the sentence. Assistant United States Attorney Erik S. Goes prosecuted the case.

A copy of this press release is located on the website of the U.S. Attorney's Office for the Southern District of West Virginia. Related court documents and information can be found on PACERLinks to other government and non-government sites will typically appear with the "external link" icon to indicate that you are leaving the Department of Justice website when you click the link. by searching for Case No. 2:26-cr-31.

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