Lincoln Man To Pay $400,000 Restitution For Evading Taxes

FAYETTEVILLE — A Lincoln businessman was sentenced to federal prison and ordered to pay more than $400,000 restitution for tax evasion.

Derek E. Sands, 37, was sentenced Wednesday to nine months in federal prison to be followed by another nine months of home detention while under electronic monitoring and a term of supervised release for two years and three months.

Sands was further ordered to pay $409,958 restitution for his conviction on one felony count of tax evasion.

Sands owned and operated a fencing business using the names Sands Fencing, Sands Fencing & Outdoor Living Areas, and Sands Enterprises, according to court records.

The Internal Revenue Service began looking into Sands after receiving information he was, among other things, cashing thousands of dollars of his customer’s checks instead of depositing the checks into a bank account.

The investigation found Sands hadn’t filed personal federal income tax returns for 2010 to 2017 even though he earned income and was required to file a return during each of those years.

The investigation found Sands willfully evaded payment and assessment of income tax. He paid his employees in cash. Sands gave a family member out-ofstate customer’s checks to deposit into a family member’s bank account and then had the family member write Sands a check for the same amount so he could cash it. When customers paid Sands by credit card, he ran the credit card through his company’s material supplier’s bank account and had the credit applied to his material account.

Sands was charged in June. U.S. Magistrate Judge Erin L. Wiedemann accepted Sands’ guilty plea.

U.S. District Judge Timothy L. Brooks presided over the sentencing hearing. Assistant U.S. Attorney Kimberly Harris prosecuted the case.