Owner of Danbury grocery store pleads guilty to federal tax offense

 

Date: April 15, 2022

Contact: newsroom@ci.irs.gov

Leonard C Boyle, United States Attorney for the District of Connecticut, and Joleen D. Simpson, Special Agent in Charge of IRS Criminal Investigation in New England, today announced that Lizbel Sanchez, also known as Lizbel Diaz, of Brookfield, waived her right to be indicted and pleaded guilty yesterday in Bridgeport federal court to a federal tax offense.

According to court documents and statements made in court, Sanchez is a minority owner of Danbury Food Corp. ("DFC"), which operates a C-Town grocery store in Danbury. Sanchez was responsible for DFC's accounting and financial records, and for collecting and paying over certain federal taxes from DFC's employees, namely federal income taxes and Federal Insurance Contribution Act ("FICA") taxes, which include Medicare and social security taxes. She also was also responsible for ensuring that DFC, as an employer, paid its own share of FICA and its Federal Unemployment Tax ("FUTA"), which were based on its employees' taxable wages.

An investigation revealed that, Sanchez and DFC paid several employees in cash and failed to collect, account for and pay over the federal income taxes and FICA taxes associated with the cash wages. Sanchez also failed to account for and pay over DFC's share of FICA taxes and its FUTA obligation based on the taxable wages of those employees that DFC paid in cash. This conduct caused a tax loss of $408,121.85 to the IRS for the 2016 tax year.

Sanchez pleaded guilty to one count of willful failure to collect or pay over taxes, which carries a maximum term of imprisonment of five years. She is scheduled to be sentenced by U.S. District Judge Michael P. Shea on July 7 in Hartford.

Sanchez is released on bond pending sentencing.

Sanchez has paid $408,121.85 in restitution to the IRS. She also has acknowledged similar conduct for DFC in 2017 and 2018, and for other businesses in which Sanchez had an interest in 2016, 2017 and 2018. Additional tax losses will be addressed civilly by the IRS.

This investigation has been conducted by the Internal Revenue Service – Criminal Investigation Division and the case is being prosecuted by Assistant U.S. Attorney David T. Huang.