Omaha business owner sentenced for failing to pay over payroll taxes


Date: January 5, 2023


United States Attorney Steven Russell announced that Bryan A. Erdman, of Omaha, Nebraska, was sentenced today in federal court in Omaha for failing to pay over payroll taxes. United States District Judge Brian C. Buescher sentenced Erdman to 12 months and 1 day of imprisonment. There is no parole in the federal system. After his release from prison, Erdman will begin a 3-year term of supervised release. Judge Buescher ordered Erdman to pay $462,644.93 in restitution.

An investigation conducted by the Internal Revenue Service Criminal Investigation Division determined that BSJ CO, Inc. ("BSJ CO") was a Nebraska corporation doing business as It's a Wonderful World Childcare within the District of Nebraska. Erdman was the president and owner of BSJ CO, and exercised control over the business affairs, including authorizing business expenses, authorizing payment of employee paychecks, signing of employee paychecks, approval of payments made by the corporation, and approval of payment of payroll taxes to the Internal Revenue Service. BSJ CO was required to withhold taxes from its employees' paychecks, including federal income taxes, and Medicare and Social Security taxes. BSJ CO was also obligated to pay an employer's share of these "payroll taxes." Erdman had the responsibility to collect, truthfully account for, and pay over BSJ CO "payroll taxes" to the Internal Revenue Service.

Throughout calendar years 2015 to 2017, BSJ CO withheld tax payments from its employees' paychecks; however, failed to account for and pay over approximately $295,463.91 of the employee share of "payroll taxes." For tax years 2015 to 2017 Erdman also failed to pay over approximately $167,181.02 of the employer share of "payroll taxes." During the time period that Erdman failed to account for and failed to pay over "payroll taxes," Erdman used at least some of the funds within the BSJ CO's bank account to pay for personal expenses not associated with BSJ CO.

"Employers have a responsibility to withhold the proper amount of taxes from their employees' wages and pay those taxes over to the IRS," said IRS Criminal Investigation Acting Special Agent in Charge, Thomas Murdock, St. Louis Field Office. "Not only is it their legal duty to the United States, they also owe it to their workers to protect their Medicare and Social Security benefits."

This case was investigated by the Internal Revenue Service Criminal Investigation Division.