UPDATE: Reckwerdt apologizes to the community, from his attorney.
Today, Michael Reckwerdt extends his deepest apology for the tax law errors he made while operating his longstanding businesses in the Florida Keys. As an established member of the Florida Keys business community, Mr Reckwerdt understands his obligation to be accurate in all his dealings with the IRS. He failed to do so, and is working with the IRS to rectify his mistake and pay all the taxes due. He has upgraded his accounting professionals, and is confident that his efforts going forward satisfy best business practices.
In open court today, Mr. Reckwerdt accepts responsibility for his actions, and will redouble his efforts to be a model citizen. He has worked and served long and hard to help the Keys communities grow and achieve success. He knows he will continue to pay his obligation to the court and the community, and hopes that by his actions today he is demonstrating his commitment to setting things right. With the support of his loyal staff, his companies will continue to their clients and customers.
Former Islamorada Mayor Michael Reckwerdt on Friday pleaded guilty to federal tax fraud and was immediately taken into custody by the U.S. Marshals Service.
At the federal courthouse on Simonton Street in Key West, Reckwerdt, 47, admitted to under-reporting salaries paid to employees of several companies he controls, including his Robbie's Marina in Islamorada, to reduce payments to the Internal Revenue Service. He faces up to five years in prison.
With Reckwerdt's fiance and daughter looking on, U.S. Magistrate Lurana Snow ordered him held on $150,000 bond. If he makes it and gets out, he isn't allowed to leave the state without Snow's permission. A sentencing date hasn't been set.
The IRS says he undereported more than $1 million from 2006 to 2010. Reckwerdt must pay the IRS $160,013.71 to settle his bill. He also faces a fine up to $250,000.
Reckwerdt, wearing a long-sleeve white shirt and glasses with his hair slicked back, said little before the judge, except for "yes, ma'am" and "no ma'am" when she asked him questions. Asked if he was guilty, he softly said yes.
"Today is a good day for those business owners of Monroe County who are properly accounting for and paying over the taxes withheld from their employees' compensation (commonly referred to as employment taxes) because Michael Reckwerdt admitted in court today that he knowingly and intentionally devised a scheme that resulted in his failure to fully report and pay over the employment taxes for employees of five of his businesses," said Kelly Jackson, special agent in charge of criminal investigations for the IRS' Miami office.
Jackson said Reckwerdt "kept two sets of books for the compensation paid to the employees of his businesses. Part of the employees' compensation was properly accounted for, however, the other part of their compensation was paid in cash which underreported the employees' wages and caused an underpayment of employment taxes to the IRS.
"Once an employee's salary composition was determined by Reckwerdt, he instructed office employees to falsify the books by hiding and concealing the cash payments made to his employees."
Jackson continued, "Because of Reckwerdt's scheme, he not only defrauded the United States by not properly withholding and paying over his employment taxes, he potentially victimized legitimate businesses by creating an unfair competitive advantage over those businesses that are lawfully paying over their share of employment taxes."
Reckwerdt served on the Islamorada Village Council for more than eight years, up until 2012, when he was term-limited out.