The following case summaries are excerpts from public record documents on file in the court records in the judicial district in which the cases were prosecuted.
Businessman Found Guilty on 29 Tax Charges
On January 7, 2004, in Dallas , Texas , Richard M. Simkanin, owner of Arrow Custom Plastics, who has not withheld taxes from his employees’ paychecks for three years, was convicted by a federal jury on 29 counts of tax violations. During trial, government witnesses testified that Simkanin’s bookkeeper and two members of the accounting firm who prepared the company tax returns for Arrow Custom Plastics, all told Simkanin that it was unlawful to refuse to collect taxes from employees’ wages. Evidence presented at trial also showed that Simkanin was warned by the senior partner of the accounting firm that he would get into criminal trouble if he refused to withhold taxes. By refusing to withhold taxes, during the period 2000-2002, Simkanin was able to retain over $175,000 in taxes lawfully due to the IRS. Simkanin told one of his accountants that he as a Free Man, he was not obligated to pay taxes or collect taxes from his employees’ wages. In March 2000, his accounting firm quit after it was unsuccessful in persuading Simkanin to reconsider and collect employee taxes.
Michigan Man Sentenced in Fraud Case
On January 5, 2004, in Detroit , MI , Peter W. Tietenberg pleaded guilty to wire fraud and failure to file a tax return. According to an information and his plea agreement, from 1998 through 2001, Mr. Tietenberg, an accountant, operated Business Financial Consultants, a business which provided accounting and tax services. During this time period, Tietenberg’s clients would submit information so that employee withholdings, social security, and Medicare taxes could be calculated. After determining the amount of taxes due Tietenberg would transmit payroll register forms via facsimile, indicating the clients’ taxes due and owing. Tietenberg then directed his clients to write checks, payable to Business Financial Consultants, so that he could make payment to the Internal Revenue Service on their behalf. Instead of making the required payments to the IRS, Tietenberg converted the funds to his own use, which totaled over $750,000. From 1998 through 2001, Tietenberg also failed to file his own personal tax returns, which included the failure to report over $390,000 in gross income on his 2000 federal tax return.
Financial Planning Service Owner sentenced to Six Years for tax charges
On December 17, 2003, Mark W. May, in Dayton , Ohio , founder, president and owner of Maranatha Financial Group, Inc., a defunct fee-only financial planning service was sentenced to six years in prison and order to pay $728,090 in restitution to the IRS. May was convicted on September 26, 2003 of six counts of tax evasion and failure to remit payroll taxes to the IRS. Any involvement with the financial service industry will be considered a violation of his three years of supervised release which must be follow his prison sentence.
San Bernardino County Man Admits To Failing To Pay Employment Taxes On Over $3.1 Million In Cash Wages To Employees
On November 24, 2003, in Los Angeles , CA , Veron Morris Marshall pleaded guilty to tax fraud charges after admitting the he and his bookkeeper/office manager paid cash wages to employees to avoid paying hundreds of thousands of dollars in employment taxes to the IRS. Marshall admitted that from 1996 through 1999, he determined which employees were to be paid in cash, which were to be paid by check, and which were to be paid by a combination of the two. Marshall and his bookkeeper, Faith Virginia Krug, cashed a large number of checks made payable to the company from third parties as one source to pay employees. The other source of cash used to pay employees came from Marshall ‘s supplier. Marshall and Krug admittedly endorsed other company checks received from third parties over to a supplier, which then offset those funds against debts which Marshall ‘s company owed to it. The supplier then returned the excess funds to Marshall’s company by issuing checks drawn on its bank account made payable directly to company employees. Krug pleaded guilty to conspiracy. Marshall admitted that he directed Krug to keep two sets of books, one set which reflected the true income of the company, and a second set which reflected only the income and expenses that were reported to the IRS. For employees who received cash wages Marshall imposed a fee which he used for his personal benefit. The scheme resulted in the non-payment of employment taxes totaling approximately $470,000.
Cedar Falls Man Sentenced To 30 Months For Million Dollar Tax and Embezzlement Scheme
On October 22, 2003, in Cedar Rapids , IA , Rodney V. Foster was sentenced to 30 months in prison, followed by three years of supervised release and ordered to pay $750,000 in restitution after pleading guilty to failure to account for and pay over withholding and FICA taxes, theft and embezzlement from an Employee Benefit Plan. Foster admitted that he deducted and collected federal income taxes and FICA taxes from employee wages in the sum of $1,046,258 and then willfully failed to pay these taxes to the IRS. Foster also admitted to converting $26,776 of the funds collected for his employees’ pension benefit plan for his own use.
Sa’ad El-Amin Sentenced To 37 Months In Prison
On October 17, 2003, in Richmond , VA , Sa’ad El-Amin was sentenced to 37 months in prison for conspiracy to defraud the United States by failing to file income tax returns and evade taxes. El-Amin and Beverly Crawford, his wife, were licensed attorneys and failed to pay the vast majority of the federal taxes assessed against them. As a result of their failure to pay these taxes, the IRS filed assessments and liens against El-Amin and Crawford totaling more than $700,000 for unpaid individual income taxes, corporate income taxes, employment taxes, penalties and interest. El-Amin was held accountable for a tax loss of $710,451.
Owner of Painting Business Underreported Over $79,000 in Employees’ Wages
On October 27, 2003, in Los Angeles , California , Sook Hee Park , who operates Y G Maintenance, a painting business, pleaded guilty to filing a false tax return. Park admitted to underreporting over $79,000 in wages on employment tax forms filed with the IRS in 1997. She paid some employees in the form of cash resulting in Park not withholding and paying over to the IRS the employment taxes due on the unreported wages.
Park also admitted that she deposited a portion of customers’ checks and cashed the other portion. She maintained records of both the deposited checks and the cashed checks, but only provided to her accountant the records of income deposited into the bank account. The record of cashed checks were not provided to her accountant which was not reported on the tax returns. According to the plea agreement, Park failed to report $70,814 in additional income in 1997.
Owner of Temporary Personnel Agency Sentenced for Tax Fraud
On October 10, 2003, in Kansas City , Missouri , Dawn Marie Goszewski was sentenced to 21 months and ordered to cooperate with the IRS to pay all outstanding amounts owed including $281,584 in personal income taxes and $279,027 in employment taxes. Goszewski was the owner, president, and operator of Culinary Resources, a staffing service for temporary personnel in the food and hospitality industry. On July 10, 2003, Goszewski pleaded guilty to tax evasion charges. Goszewski admitted that for the quarters ending September 30, 1999, through March 31, 2001, with the exception of the quarter ending March 31, 2000, she collected $279,027 from her employees for Social Security taxes, Medicare taxes, and federal income taxes. She did not turn that money over to the IRS.