James Phillip Scholten, a 51-year-old resident of Byron Center, has pleaded guilty to federal tax evasion, according to an announcement from Timothy VerHey, U.S. Attorney for the Western District of Michigan. Scholten admitted to evading taxes on approximately $3.4 million in income earned from selling scrap metal between 2011 and 2024.
Court documents show that Scholten was charged with one count of tax evasion, a felony. He is scheduled for sentencing before United States District Judge Jane M. Beckering on May 12, 2026, and faces up to five years in federal prison.
U.S. Attorney VerHey commented: “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.”
Scholten used a Certified Public Accountant (CPA) to prepare his federal tax returns but did not disclose his additional income from scrap metal sales. The returns filed from 2011 through 2023 were false because he withheld information about recycling payments and related income from his CPA. In one instance in 2021, Scholten reported owing only $2,465 in federal income tax while failing to report an additional $610,818 in taxable recycling income—resulting in an unpaid tax liability of $172,618 for that year alone.
Karen M. Wingerd, Special Agent in Charge of IRS-CI Detroit, stated: “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 investigation was conducted by IRS Criminal Investigation and is being prosecuted by Assistant U.S. Attorney Chris O’Connor.
