Overview:
The Supreme Court of Palau has sentenced businessman Ephram Polycarp to pay more than $444,000 in restitution, a $40,000 fine, and serve five years of supervised probation following his conviction for filing false tax returns and failing to pay taxes. The case, tied to his company Palau Commemorative Coin Company, revealed years of unreported royalty income and unauthorized business activity involving foreign minting contracts.
By: L.N. Reklai | November 10, 2025 | Koror, Palau
The Supreme Court of Palau has sentenced businessman Ephram Polycarp to pay more than $444,000 in restitution, a $40,000 fine, and to serve five years of supervised probation after his conviction on multiple counts of filing false tax returns and failing to pay taxes.
Polycarp was convicted of eight counts of filing a false and fraudulent return, in violation of 40 PNC § 1701(c), and eight counts of failure to pay tax, under 40 PNC §§ 1204 and 1421. The charges stemmed from what the court described as deliberate concealment of the nature of his business to avoid paying taxes.
The case emerged from Polycarp’s operation of the company Palau Commemorative Coin Company (PCCC), which between roughly 2014 and 2023 entered into contracts with foreign minting firms to produce legal-tender (or commemorative) coins bearing Palau’s name. Prosecutors allege that in many instances PCCC received royalty and payment income, for example from Coin Invest AG (CIT) of Liechtenstein, but reported “zero revenue” or claimed “business not active yet” on tax returns.
Evidence cited in the judgment includes a U.S. $64,000 royalty payment in early 2014 and annual payments of U.S. $32,000 in subsequent years, which were not disclosed to tax authorities. Moreover, during 2019-23 the company is said to have continued negotiating and signing minting contracts despite its authorisation to issue legal-tender coins having been revoked by the Palau Ministry of Finance.
In his sentencing order issued November 7, Associate Justice Peter Huffman noted that the defendant’s conduct would normally warrant imprisonment. However, the court determined that allowing Polycarp to remain under probation and continue operating his other businesses would better serve the public interest by ensuring repayment to the Republic. “Defendant owes the Republic and its citizens a substantial sum of unpaid taxes and penalties,” the court stated. “Justice is best served by the defendant being on probation and productively running his other businesses to be able to repay his debt to society, rather than being incarcerated at further expense of taxpayers.”
Under the order, Polycarp must pay an initial U.S. $146,896 by November 14, 2025, which includes the total tax due, a 50 percent statutory penalty, plus an additional U.S. $100,000 toward restitution. The remaining balance of U.S. $337,389.97 must be paid in monthly installments of U.S. $5,817.06 over the course of 58 months, beginning December 15, 2025.
The court also suspended separate monetary penalties related to the failure-to-pay counts, citing duplication and the interest of justice.
Polycarp retains the right to appeal his conviction and sentence and may apply for leave to appeal in forma pauperis if unable to afford the costs.