The former co-owner of the arena where the Pittsburgh Penguins used to practice, convicted nearly two years ago in a tax avoidance scheme, has managed to stay out of jail.
But his time is now up, a federal judge ruled Thursday.
U.S. District Judge Arthur Schwab said Thursday that tax lawyer Steven Lynch, 63, of Squirrel Hill, who had owned and operated the Iceoplex complex at Southpointe in Cecil, will have to report to prison in July.
He had been convicted after a lengthy trial in 2016 of willful failure to pay payroll taxes for his employees since 2012.
He's been out on appeal ever since but an appellate decision this week upholding his conviction means it's time to start his 48-month term.
Judge Schwab ordered him to surrender to the U.S. marshals by July 16.
Lynch and his lawyers had previously asked the judge to spare him prison, arguing that he can better serve the community by continuing to work and volunteering. He suggested he be allowed to serve an alternative term through Aleph Institute, a Jewish humanitarian organization.
The judge rejected that idea, saying allowing Lynch to avoid the lockup would send a message to "tax-evading professionals" that people like them enjoy a different system of justice than everyone else.
In addition to the 48 months behind bars, Judge Schwab ordered Lynch to pay $793,145 in restitution and a $75,000 fine.
The jury had sided with the IRS in convicting Lynch, saying he failed to withhold about $1.5 million in payroll taxes by creating a fake corporation to shield money from the government.
His lawyers had argued that he actually helped the community by putting the money back into his companies and saving jobs.
In imposing the sentence, Judge Schwab said that while Lynch may not have enriched himself directly with the scheme, he benefited from cheating on taxes by using the funds to improve his investments in his businesses.
After the sentence was handed down in January 2017, Lynch asked to remain free pending appeal to the 3rd U.S. Circuit Court of Appeals.
The tax division of the U.S. Department of Justice, which prosecuted the case, objected and the judge denied the request, but Lynch then appealed the denial.
In March 2017, a divided panel of the circuit granted his motion to stay out of jail pending appeal.
The 3rd Circuit on Tuesday unanimously affirmed his conviction and the Justice Department asked that his bond be revoked.
Lynch's lawyers did not immediately respond to a request for comment.
Torsten Ove: tove@post-gazette.com.
First Published: May 31, 2018, 3:21 p.m.
