Minnetonka Businessman Pleads Guilty to Failing to Pay $1M in Taxes

A Minnetonka resident who pleaded guilty to failing to pay nearly $1 million in taxes between 2003 and 2010, established a trust during that time to endow a college scholarship fund at his alma mater.

Stephen Paul Clough pleaded guilty in federal court earlier this week to failing to pay federal income and employment taxes withheld from workers at Gamma Vacuum, located in Shakopee. 

In his plea agreement, Clough admitted that from 2003 to 2010, he failed to pay the Internal Revenue Service (IRS) appropriate income and employment taxes withheld from the wages of the employees at the company, resulting in a tax loss to the IRS of $944,134.29.

According to Michigan Technological University, Clough earned three degrees there – a BS in metallurgical engineering in 1974, a MS in 1975 and a Ph.D in 1977.

In a 2006 alumni publication, Clough is pictured shaking hands with Michigan Tech’s President, Glenn Mroz, after establishing the Clough Trust to endow an undergraduate scholarship fund in the Department of Materials Science and Engineering. Clough was praised as “providing enthusiastic and tireless guidance to the department” through serving for 13 years on their External Advisory Board.

Also in 2006, Clough was inducted into Michigan Tech's Academy of Department of Materials Science and Engineering, which honors those whose careers reflect outstanding accomplishment and service to the profession. Academy members serve as role models for students and the department encourages visits and interactions with students whenever possible, the report said.

On the school's website, a profile of Clough lists him as the president of Shakopee business Gamma Vacuum and says Clough lives in Minnetonka and has a cottage in Michigan.

As part of a plea agreement, Clough pleaded guilty on May 7 to one count of willful failure to pay over tax in a federal court in St. Paul. He faces up to five years in prison.