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Sunday, September 22, 2024

Former CEO pleads guilty to $14 million payroll tax fraud scheme

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Deputy Attorney General Lisa O. Monaco | https://www.justice.gov/agencies/chart/map

A New Hampshire man pleaded guilty today to not paying more than $14 million in employment taxes and not filing personal tax returns.

According to court documents and statements made in court, Andrew Park, 49, of Bedford, was the co-founder and CEO of a startup technology company. Park was responsible for all financial matters related to the company, including filing the company’s quarterly employment tax returns and collecting and paying over Social Security, Medicare, and income taxes withheld from employees’ wages to the IRS, as well as the Social Security and Medicare taxes the company owed.

He was also responsible for collecting and paying over state and local employment taxes to those respective governments. From the company’s founding in 2014 through the third quarter of 2021, Park withheld these federal, state, and local taxes from employees’ wages but did not pay them over as required by law. He also did not pay over the portion of the employment taxes that the company owed. Park did so even though a payroll service company he hired to process employees’ payroll regularly notified him that the taxes were due. In more than one instance, an employee notified him that the amount paid to Social Security listed on her W-2 did not match what was reported by the Social Security Administration.

From 2013 through 2020, Park also did not file individual tax returns as required by law despite paying himself a salary of approximately $250,000 each year.

In total, Park caused a tax loss to the IRS exceeding $14 million, as well as additional losses to state and local taxing authorities.

He is scheduled to be sentenced on Nov. 14 and faces a maximum penalty of five years in prison for willful failure to account for and pay over payroll taxes, and one year in prison for willful failure to file a tax return. Park also faces additional penalties including supervised release and fines, as well as payment of restitution to the IRS and other taxing entities. A federal district court judge will determine any sentence after considering U.S. Sentencing Guidelines and other statutory factors.

Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and U.S. Attorney Jane E. Young for the District of New Hampshire made the announcement.

IRS Criminal Investigation is investigating the case.

Assistant Chief Eric Powers of the Tax Division and Assistant U.S. Attorney Matthew Hunter for the District of New Hampshire are prosecuting the case.

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