Police & Fire

Gig Harbor man sentenced to second prison term for tax fraud

A Gig Harbor man was sentenced Tuesday in U.S. District Court in Seattle to six months in prison for tax fraud, U.S. Attorney Nick Brown announced in a press release.

Jeffrey Zirkle, 58,  was the owner and co-CEO of Total Reclaim, the Northwest’s largest electronic waste recycler. In 2019, Zirkle, who was living in Bonney Lake at the time, was sentenced to 28 months in prison for defrauding clients by secretly exporting electronic waste to Hong Kong, despite presenting his business as an environmentally friendly recycling service. Tuesday’s second criminal case stems from Zirkle using company funds to pay for personal expenses and failing to report the transactions on his income tax returns.

“He’s been defrauding the company and defrauding the government for years,” U.S. District Judge James L. Robart said at Tuesday’s sentencing hearing. “He has no respect for the law whatsoever.”

The judge ordered Zirkle to pay $125,549 in restitution to the government.

“Those who fail to pay their taxes are not just cheating the government, they are also stealing from taxpayers who are following the rules,” said Brown. “But despite earning nearly $1 million a year in salary, Mr. Zirkle refused to pay his fair share. At the same time that he was misleading customers about his company’s business practices, he was also lying to the IRS by mischaracterizing his personal expenses as business expenses. No one is above the law.”

After Zirkle and his partner were prosecuted for fraud, a new CEO took over Total Reclaim, according to records filed in the case. He discovered that Zirkle had charged hundreds of thousands of dollars in personal expenses on company credit cards. An investigation by the FBI and IRS:CI determined that he spent as much as $480,000 and never reported the benefits on his income tax returns.

Many of the purchases were for luxury goods: more than $4,000 at Louie Vuitton Las Vegas, $4,000 as a down payment on a motocross bike and more than $15,000 for the partial payment of a vintage 1966 Chevrolet Chevelle. Zirkle also spent more $17,000 in corporate funds in one day on home appliances, and more than $15,000 on a home irrigation system. Even after his sentencing on the fraud charges in April 2019, Zirkle continued to use the corporate credit card for his own expenses, charging over $5,000 for septic work on his home, according to the press release.

In October 2021, Zirkle pleaded guilty to filing false tax returns from 2008 to 2017. He negotiated a settlement with Total Reclaim regarding the expenses, and was ordered to pay $125,549 in restitution for the tax loss.

In the earlier criminal case, an EPA investigation concluded that Total Reclaim had secretly exported over eight million pounds of monitors containing toxic materials such as mercury. The investigation revealed that Zirkle and his co-defendant had concealed this practice by submitting fraudulent documents to auditors and customers, and had falsified more documents when the practice was discovered.

Due to concern about the pandemic, Judge Robart ordered Zirkle to begin serving his sentence in early August. Zirkle will be on 18 months of supervised release for the tax crimes after his prison term.