UPDATE: Kenneth G's owner pleads guilty to tax evasion

By: News Center 16 Staff Email
By: News Center 16 Staff Email

The Mishawaka businessman known as Kenneth G faces a possible 25 years behind bars and fines of $1.25 million.

Kenneth Gaipa pleaded guilty to five counts of felony fraud today.

Gaipa is the owner of Kenneth G Rare Coins and Estate Jewelry in Mishawaka.

The charges had nothing to do with how Gaipa treated customers—the charges stem directly from his dealings with the federal government.

For instance, Gaipa admitted to cheating the IRS out of $368,000 in income taxes over a three year period (2008, 2009, 2010) by using business accounts to pay personal expenses and writing those personal expenses off as business deductions.

In court documents, Gaipa also admitted that he “skimmed cash from the business throughout these years,” and submitted false and misleading records to his tax preparer.

Gaipa further came clean about a personal bankruptcy case filed in November of 2008 and closed in February 2009. Gaipa “falsely and significantly underreported” his income and falsely stated that he had no ownership interest in Kenneth G. Rare Coins and Estate Jewelry when in fact, he “was the real owner” and earned significant income from the business. Gaipa’s debts were fraudulently discharged in bankruptcy court based on the information.

In dealing with the Social Security Administration, Gaipa filled out paperwork in June of 2011 stating that he hadn’t worked since February of 2006 in order to continue to receive Social Security disability benefits.

In fact, Gaipa had been working since late 2006 and earned “substantial income during this period.”

Gaipa told the court that he was diagnosed with Multiple Sclerosis about five years ago. He is now 43 years old.

Gapia’s sentencing has been set for May 17th.

The business is still open under the direction of Gaipa’s son.

Kenneth Gaipa also faces charges in state court, including theft and welfare fraud. His next appearance in St. Joseph Superior Court is set for March.


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