Grand Chute business owner with history of fraud sentenced to prison for not paying payroll taxes

Kelli Arseneau, Appleton Post-Crescent

Fri, Apr 4, 2025, 5:53 PM 4 min read

GREEN BAY — The owner of a Grand Chute business convicted of not paying payroll taxes will spend two years in federal prison, Senior U.S. District Judge William C. Griesbach ruled Friday.

Douglas Larson, 72, of De Pere, pleaded guilty in January to one count of failure to truthfully account for and pay employment taxes to the Internal Revenue Service. Larson owns MODS Client Services, formerly known as MODS International, a business that repurposes shipping containers by manufacturing and installing them into commercial buildings.

The business has been subject to numerous accusations of fraud, according to court records. Complaints in multiple civil cases detail Larson failing to meet deadlines and complete MODS projects after customers have made downpayments. Prior to the creation of MODS, court records describe similar financial issues with Midstate Corporation, Larson's previous company that was located at the same address as MODS, 5523 Integrity Way in Grand Chute.

A prosecution sentencing memorandum states Larson has a criminal history of fraud dating back to 1977. He was convicted in Dane County of "pattern of racketeering," for which he served about a decade in prison in the '80s to early '90s. In 2001, Larson was convicted in Outagamie County of theft of movable property for withholding an employee's child support funds from their paycheck, but not sending those funds to the government, according to court records. In 2002, he was convicted in Brown County of theft of more than $2,500 in a business setting for not paying subcontractors while working as a general contractor for a construction project in 1999.

At Larson's sentencing hearing at the U.S. District Court for the Eastern District of Wisconsin, Griesbach told Larson his "selfish" behaviors were not a unique lapse in judgement, but have been part of "much of his adult life."

"At 72, you're long past the age that one would expect someone to grow past this behavior," Griesbach said.

Even Larson's defense attorney, Kathleen Quinn, said she agreed that Larson should be prohibited from running any companies in the future.

"He is not a good business man," she said at the sentencing hearing. "He has no business running a business."

According to the prosecution's sentencing memorandum, Larson failed to pay payroll taxes to the IRS for nearly 14 years. Between January 2018 and September 2021, Larson paid wages to his employees, withholding money for federal payroll taxes, but did not pay those withheld wages to the IRS — owing the IRS a total of $396,082.77 for that time period, court records state.