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Whatcom County contractor bought cars, horses instead of paying employees’ taxes

An Everson contractor was sentenced to two years in prison this week for failing to pay taxes that he collected from his employees over the past decade, instead using the money to buy race horses and sports cars and finance what the government called a “lavish estate.”

U.S. District Judge John C. Coughenour handed down the sentence to Jay H. Prather, 46, on Tuesday in U.S. District Court in Seattle, according to a statement from the U.S. Attorney’s Office for the Western District of Washington.

“Mr. Prather stole from his employees and continued to do so even after he was confronted by those employees and by his accountant. He simply had no respect for the law or any concern about how his actions would impact his employees in the future,” U.S. Attorney Nick Brown said in the statement.

Prather, who owned and operated Heritage General Building Contractors from 2013-19, withheld $1.09 million in Social Security, Medicare, federal income taxes, and unemployment taxes from their paychecks, according to the U.S. attorney.

He employed as many as 48 people in that time.

In 2020, he formed Artisan Builders Inc., a custom cabinet company, and has not paid the taxes withheld from its two employees, the statement said.

Jay H. Prather’s house on Sorenson Road in Everson, Wash., is shown in an undated photo from the Whatcom County Assessor’s Office.
Jay H. Prather’s house on Sorenson Road in Everson, Wash., is shown in an undated photo from the Whatcom County Assessor’s Office.

During the sentencing hearing, Coughenour said Prather “was warned several times that his conduct was illegal,” according to the statement.

In addition to the prison sentence, Prather was ordered to pay $1,095,388, the amount owed in taxes.

He also owes $77,551 to Whatcom County in property taxes, interest and penalties, according to the Assessor’s Office.

According to the Whatcom County Assessor’s Office website, Prather owns a 2,250-square foot home on five acres at 3664 Sorenson Road in Everson, valued at nearly $1.5 million. It includes a detached garage, a patio and a shop.

Prather’s federal case was investigated by the Internal Revenue Service’s criminal Investigations division.

“Mr. Prather made the wrong decision when he chose to buy horses and Porsches for his own fun over doing the lawful, right, and mandatory thing,” said IRS Special Agent in Charge Bret Kressin.

“Mr. Prather abused his employees’ trust when he spent their withholdings for his own unjust enrichment,” Kressin said in the statement.

The Bellingham Herald left a voicemail and social media message for Prather, but he didn’t immediately respond.