The following examples of Employment Tax Fraud Investigations are written from public record documents on file in the courts within the judicial district where the cases were prosecuted.
Men Sentenced and Ordered To Pay Over $6,000,000 Restitution for Tax Fraud at Hope Hospital
On April 21, 2017, in Texarkana, Arkansas James R. Cheek, of Waleska, Georgia and Herschel J. Breig, Sr., of Nixa, Missouri, were each sentenced to 36 months in prison, three years of supervised release and ordered to pay restitution of $6,000,000 jointly and severally. Both men pleaded guilty in September 2016 to failure to collect or pay over tax. According to court records, as principals of Hope Medical Park Hospital, both Cheek and Breig were responsible to collect, truthfully account for, and pay over the hospital’s payroll taxes to the IRS during the calendar years 2009, 2010, 2011, and 2012. They failed to pay approximately $6,000,000 in payroll taxes as was required.
Louisiana Criminal Defense Attorney Sentenced for Tax Evasion
On April 19, 2017, in Baton Rouge, Louisiana, Michael Thiel was sentenced to 30 months in prison, two years of supervised release and ordered to pay restitution to the IRS of $998,352. Thiel pleaded guilty in December 2016 to evading the payment of federal income and employment taxes. Thiel operated a criminal defense practice in Hammond and from 2003 through 2013, but did not timely file income or employment tax returns and did not make timely payments of the taxes he owed. Thiel concealed his income and assets creating three trust and nominees. Thiel used these three trusts to evade the payment of federal income and employment taxes. In January 2007, Thiel used nominees to purchase his primary residence for $435,000 and entered into a phony lease agreement with the nominees to conceal his ownership of the property and shield it from IRS collection efforts. Between January 2007 and January 2014, Thiel deposited $416,283 into the nominee account that was used to secure and pay the mortgage on the property. These funds came from the nominee trusts and other accounts not held in his name.
Accounts Payable Supervisor Who Embezzled Millions Sentenced
On April 7, 2017, in San Diego, California, Edward Abellana was sentenced to 24 months in prison for abusing his position of trust at Argen Corporation, a San Diego-based metals company. Abellana was also ordered to repay approximately $1,952,202 to Argen and pay approximately $661,000 to the IRS for unpaid taxes. According to the plea agreement, Abellana worked as the Accounts Payable Supervisor from December 2011 until October 2015. While overseeing the metals company’s credit card accounts, Abellana used his access to embezzle approximately $1.9 million which he used for a variety of personal purchases. Abellana also used his position to defraud Argen by issuing unauthorized checks against the company’s checking account to pay for personal expenses. In total, Abellana admitted that he issued more than $162,000 in fraudulent checks. In order to conceal his fraud, he intercepted the credit card statements and used computer software to alter the statements. Thereafter, he falsified the company’s books and records by falsely characterizing his personal purchases as legitimate business expenses. In addition to his embezzlement scheme, Abellana filed false tax returns by failing to report the money he embezzled on his tax returns for tax years 2012 through 2015. Abellana owes the Internal Revenue Service more than $661,000 in federal income taxes.
West Virginia Business Owners Sentenced for Failing to Pay Employment Taxes
On January 26, 2017 in Charleston, West Virginia, Michael Taylor and his wife Jeanette Taylor both of Wayne County, were sentenced to 21 months and 27 months in prison, respectively for failing to pay over employment taxes. Michael Taylor was also sentenced to three years of supervised release and ordered to pay $1,440,130 in restitution to the IRS. Jeanette Taylor was also sentenced to three years of supervised release and ordered to pay $766,273 jointly and severally with Michael Taylor to the IRS. Both pleaded guilty on October 18, 2016. According to court documents, from 2000 through 2010, the Taylors owned and operated a construction business that transported steel and sold gravel and concrete. Both Michael Taylor and Jeanette Taylor were responsible for collecting, accounting for, and paying over to the IRS federal income taxes and social security and Medicare taxes that were withheld from the wages of their employees. From July 2007 through 2010, the Taylors withheld over $850,000 from their employees’ paychecks. Instead of paying over the withheld taxes to the IRS, the Taylors used the funds to purchase property and finance their horse farm. The Taylors also failed to pay over $490,000 in employment taxes for their prior business. The total tax loss for the Taylors’ conduct is $1.4 million.
Missouri Restaurant Owner Sentenced for $566,000 Tax Scheme
On January 5, 2017, in Kansas City, Missouri, Roger Geisler, of Lenexa, Kansas, was sentenced to 24 months in prison and ordered to pay $566,128 in restitution to the IRS. On April 7, 2016, Geisler pleaded guilty to filing a false tax return. According to court documents, for tax years 2007, 2008 and 2009, Geisler signed and submitted corporate returns for his company, Lee’s Pacific Foods, that underreported his restaurants’ gross receipts. The total unreported income for those tax years totaled $2,297,013. As a result of Geisler’s omissions, the amount of tax due and owing totaled $402,860. Geisler also failed to report and pay over employment taxes from 2007 to 2010. A conservative calculation of employment tax due totals $163,268, bringing the total loss from the overall scheme to $566,128. Geisler also did not file individual tax returns for 2007 through 2010. Geisler spent at least $156,988 in business funds on personal expenses.
Oklahoma Man Sentenced for Money Laundering and Failure to Pay Over Employment Tax
On December 15, 2016, in Muskogee, Oklahoma, David Glenn Moore Jr., of Catoosa, was sentenced to 33 months in prison and three years of supervised release for wire fraud and failure to account and pay over employment tax. In addition, Moore was ordered to pay $475,138 in restitution. According to court documents, from on or about July 1, 2009 through on or about June 12, 2014, Moore, the former Executive Director of the Tahlequah Area Chamber of Commerce (TACC), devised a scheme to defraud TACC of approximately $439,660 and other property by means of materially false and fraudulent pretenses, representations and promises. In addition, Moore willfully failed to truthfully account for and pay over to the Internal Revenue Service payroll taxes totaling $45,556 for the years 2011, 2012 and 2013 which were due and owing to the United States on behalf of the TACC and its employees.
Wisconsin Family Sentenced in Tax Conspiracy
On November 18, 2016, in Milwaukee, Wisconsin, Paul Bouraxis, his wife, Freida Bouraxis, son, Andreas Bouraxis, and son-in-law, Reiad “Ray” Awadallah, were sentenced for federal tax offenses. Paul Bouraxis was sentenced to 24 months in prison. Andreas Bouraxis was sentenced to 12 months and one day in prison. Freida Bouraxis and Awadallah were each sentenced to three years of probation. Paul, Freida, and Andreas Bouraxis were also ordered to pay $1.4 million in restitution. According to court documents, Paul, Freida, and Andreas Bouraxis conspired to defraud the IRS by skimming more than $3 million in cash from various restaurants they operated in the Milwaukee area. They also failed to report substantial income on their personal income tax returns and underreported and underpaid federal income and payroll taxes by approximately $1.4 million. The defendants agreed to forfeit an additional $442,000 of the seized funds to the United States to settle a related civil forfeiture action. Federal agents also seized gold and silver coins and bars, as well as jewelry, from the defendants’ business and Paul and Freida’s residence. In addition, Paul Bouraxis will assist in transferring funds held in a bank account in Greece to the IRS.
Trucking Company Owner Sentenced on Employment Tax Charges
On November 4, 2016, in Camden, New Jersey, George Valentine, of Williamstown, was sentenced to 18 months in prison and two years of supervised release. According to court documents, Valentine operated J & F Trucking, which later changed its name to River Road Trucking, a trucking business located in Camden. Between 2007 and 2012, Valentine failed to file various Forms 941 and pay over to the IRS at least $187,792 of payroll taxes for J & F Trucking and at least $128,612 of payroll taxes for River Road Trucking.