A business leader from Virginia has been sentenced to 80 months behind bars after failing to remit payroll taxes withheld from employees’ wages—causing a tax loss exceeding $3 million. In addition to the prison term, restitution and supervised release will follow, highlighting the serious consequences of employment tax fraud.
The Scheme: Withheld Taxes Never Repaid
Between the first quarter of 2015 and the first quarter of 2024, the individual in question, who held executive control over a company serving detained immigrants, withheld Social Security, Medicare and federal income tax from employee wages—but failed to file the necessary returns or remit the funds to the Internal Revenue Service (IRS). In that period the tax shortfall reached approximately $3.1 million.
Funds Diverted to Personal Luxury and Expenditure
Rather than remit the withheld funds, the executive diverted millions of dollars of the company’s cash to personal luxury purchases. The spending included over $500,000 on exotic cars such as multiple Ferraris, Maseratis, BMWs and a Mercedes‐Benz, $573,000 to fund a wedding in August 2016, and more than $1.1 million to publish and promote a book authored by his spouse.
Sentencing and Restitution
A federal judge ordered the former business owner to serve 80 months in prison and three years of supervised release following his prison term. He must also pay restitution amounting to $3,023,984 to the United States. The case was investigated by the IRS Criminal Investigation division.
