FORMER SECURITY COMPANY OPERATOR PLEADS GUILTY TO FAILING TO PAY EMPLOYMENT TAXES

FROM:  U.S. JUSTICE DEPARTMENT 

Tuesday, May 12, 2015

Former Security Company Operator Pleads Guilty to Failing to Pay Employment Taxes

A Temple Hills, Maryland, resident who operated a company that provided security guards to private businesses and apartment complexes pleaded guilty today in the U.S. District Court for the District of Columbia to failing to file employment tax returns and pay over approximately $600,000 in employment taxes to the Internal Revenue Service (IRS), announced Acting Deputy Assistant Attorney General Larry J. Wszalek of the Justice Department’s Tax Division.

Jeffrey Norman Jackson operated Innovative Security Services LLC in Washington, D.C., between 2005 and 2009, according to court documents.  Jackson controlled the business’s finances and was responsible for filing the Employer’s Quarterly Federal Tax Returns (IRS Forms 941) and paying over to the IRS the business’ federal income, social security and Medicare taxes (known as FICA taxes) that were withheld from the wages of Innovative’s employees.  For more than four years, Jackson willfully failed to comply with these legal obligations.  He used the stolen funds to pay personal expenses, such as rent and gym membership fees.

The plea agreement requires Jackson to pay $595,687.39 in restitution to the IRS for the taxes due and owing.  He faces a statutory maximum sentence of five years in prison and a $250,000 fine when he is sentenced on July 27.

Acting Deputy Assistant Attorney General Wszalek commended the special agents of IRS-Criminal Investigation, who investigated the case and Trial Attorney Melissa S. Siskind of the Tax Division, who is prosecuting the case.  Wszalek also thanked the U.S. Attorney’s Office of the District of Columbia for their assistance.

WOMAN CONVICTED OF FAILING TO PAY OVER $2.6 MILLION IN FEDERAL PAYROLL TAXES WITHHELD FROM EMPLOYEES

FROM:  U.S. JUSTICE DEPARTMENT
Thursday, February 26, 2015
Washington State Business Owner Convicted of Failing to Pay Employment Taxes

A Burbank, Washington, woman was convicted by a jury yesterday after a five-day trial in the U.S. District Court in the Eastern District of Washington located in Spokane, Washington, of willfully failing to pay more than approximately $2.6 million in federal payroll taxes withheld from her employees, announced Principal Deputy Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division and U.S. Attorney Michael C. Ormsby of the Eastern District of Washington.

“Employers who willfully fail to timely collect, account for and deposit employment taxes are, quite simply, stealing from their employees and the U.S. Treasury,” said Principal Deputy Assistant Attorney General Ciraolo.  “Yesterday’s verdict sends a clear message to those individuals who view this obligation as optional – you will be investigated and prosecuted to the fullest extent of the law.”

According to the evidence introduced at trial and other documents filed in the case, Maria Elizabeth Townsend was the president and majority owner of Townsend Controls Inc. (TCI), an electrical contractor in Pasco, Washington.  The majority of TCI’s employees were members of Local 112 of the International Brotherhood of Electrical Workers (Local 112).  From at least April 1, 2007, through Sept. 30, 2009, Townsend withheld employment taxes from the wages of the members of Local 112 that TCI employed as well as its other non-union employees.  She willfully failed, however, to pay those taxes to the Internal Revenue Service (IRS).  Instead of paying the withheld taxes, Townsend purchased several automobiles and made large disbursements of corporate funds to her family members.

Townsend faces a statutory maximum sentence of five years in prison and a $250,000 fine for each count of failing to pay over employment taxes.  Sentencing is scheduled for June 4.

Principal Deputy Assistant Attorney General Ciraolo and U.S. Attorney Ormsby commended the special agents of IRS-Criminal Investigation who investigated the case, as well as Assistant U.S. Attorney George J. C. Jacobs III and Trial Attorney Lisa L. Bellamy of the Tax Division, who are prosecuting the case.