There are times when an executive decision must be made. (The head honcho is often required to make tough decisions to ensure an organization survives and meets its mission.) A press release published by the Department of Justice tells the story of a corporate executive who made a few poor decisions that ultimately scammed the Internal Revenue Service (IRS) and probably upset quite a few company employees as well. (He certainly wasn’t thinking about helping his organization to be profitable or to survive.)
The press release states that the former executive chairman of a holding corporation that owned a technology firm oversaw the collection, accounting and payment of payroll taxes at that particular company. While the man withheld the appropriate amounts from employee wages, he failed to pay the employee withholding amount and the employer matching portion to the IRS. (The press release states that the tax loss was more than $2.2 million.)
The fraudster’s illegal actions didn’t stop there. He also served as the person responsible for collecting and sending employee contributions on a bi-weekly basis to the company’s pension plan asset custodian. (A little here, a little there…no one will notice the missing contributions.) As you might guess, he did not forward those retirement contributions. The criminal’s poor conduct resulted in a loss of $186,263.
And, then there’s the issue of how he spent the employment taxes and pension contributions. (It appears that he likes to entertain.) The former executive spent more than $505,000 for the use of an executive suite at a Washington, D.C. football stadium. And, let’s not forget to mention that he sponsored a Virginia horse race for $40,000. (Most fraudsters like to live large or at least have the appearance of doing so.)
This poor executive decision-maker pleaded guilty to one count of willful failure to collect and pay employment taxes and one count of theft or embezzlement from an employee benefit plan. He faces up to five years in prison and a fine of $250,000 for the employment tax charge. The fraudster also could receive a five-year sentence and another fine of up to $250,000 for theft from an employee benefit plan.
As a result of his selfish acts, there are some pretty angry employees wondering where their retirement fund contributions went. (The least he could have done is to invite his victims to the football game or horse race.) Despite his poor executive decisions, the Judge will have the last say on the matter. Let’s hope the justice system makes the right decision and gives this criminal an appropriate punishment.
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