U.S. District Judge Lynn Adelman has accepted the guilty plea of William S. Gallagher, who was charged with failing to account for and pay employment taxes to the Internal Revenue Service (IRS). The announcement was made by United States Attorney Gregory J. Haanstad on November 19, 2024.
Gallagher, owner and manager of H2O Wisconsin, LLC, also known as Poolblu in Lake Geneva, Wisconsin, pleaded guilty to one count under 26 U.S.C. § 7202. This follows an indictment from October 22, 2024, where a federal grand jury charged him with twelve counts related to his failure to manage employment taxes for each quarter between 2018 and 2020.
As per the indictment and plea agreement details, Gallagher's company employed around 15 workers. He was responsible for withholding federal income taxes along with Social Security and Medicare taxes from employees' wages and paying these amounts to the IRS. Additionally, he needed to file quarterly tax returns (Forms 941) reporting these amounts.
Gallagher also had an obligation to pay the employer’s matching portion of Social Security and Medicare taxes but failed to do so truthfully from tax years 2018 through 2020. The total loss incurred by the IRS due to this misconduct dates back to 2014 and exceeds $606,000.
Sentencing is set for January 30, 2025. Gallagher could face up to five years in prison alongside a potential fine of $250,000. Post-imprisonment supervision could extend up to three years.
The case investigation was conducted by the IRS Criminal Investigation Division and is being prosecuted by Assistant United States Attorney John P. Scully.
For further information contact Public Information Officer Kenneth Gales at Kenneth.Gales@usdoj.gov or call at 414-297-1700.