Former First Financial Northwest Bank CEO pleads guilty to filing false tax returns

The former CEO and President, Victor Karpiak, hid $2.3 million of income on tax returns from 2010 to 2016.

The former president and CEO of First Financial Northwest Bank in Renton has pleaded guilty to filing false tax returns on more than $2.3 million in income from 2010 to 2016, according to the U.S. Attorney’s Office Western District of Washington.

Victor Karpiak, 64, who retired in 2013 and left the Seattle area, pleaded guilty Feb. 27 in U.S. District Court in Wisconsin.

Punishment for filing false tax returns can include up to three years in prison and a $250,000 fine, or twice the gross tax gain or loss. Sentencing is scheduled for May 17.

According to facts admitted in his plea, Karpiak served as a consultant for the beneficiary of a family and a martial trust. While he paid himself fees of more than $3.2 million, Karpiak only reported a $943,322 on his taxes, less than a third of that income.

The tax loss was $867,540, which Karpiak agreed to pay to the IRS. He also agreed to pay any interest or civil penalties imposed. The interest could be more than $143,647, according to a press release from the U.S. Department of Justice.

First Financial Savings Bank Northwest, which changed its name to First Financial Northwest Bank in 2015, is a subsidiary bank of First Financial Northwest, Inc. The bank has 12 locations, including one ATM-only.

Representatives of First Financial Northwest Bank, which is headquartered in Renton, did not comment on the case, adding that the matter does not involve them.

The Renton Reporter covered Karpiak’s retirement plans in 2012. In the article, Karpiak discussed his succession plan to leave a strong executive team for First Financial Northwest.

Karpiak was charged in Western District Washington courts but chose to resolve the case near his home of La Crosse, Wisconsin.

IRS criminal investigation worked the case.

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