A Chester man, David Neel, has been sentenced to two years in prison for failing to account for or pay employment taxes. According to court documents, Neel, 63, was the sole owner and operator of several sleep disorder centers in central Virginia, including Siesta Health LLC, Healthy Sleep LLC, and Healthy Sleep Partners LLC. He withheld federal trust fund taxes from employees' wages but did not report or pay these withholdings to the Internal Revenue Service (IRS), using the funds for personal expenses instead.
Neel did not file an IRS Form 941 for any of his companies from the first quarter of 2015 through the last quarter of 2020 and failed to make trust fund tax payments. Despite this, he issued W-2s indicating at least $311,985 was withheld in trust fund taxes during this period. Additionally, he did not pay the employer’s share of Medicare and Social Security contributions amounting to at least $148,558. The total unpaid amount was at least $460,543.
During this time, Neel had access to significant company funds which he used for personal expenses such as a monthly rent of $5,000 on a horse farm and residence totaling over $220,000; home renovations costing approximately $30,000; nearly $40,000 on life insurance; educational expenses for his partner's daughter; and purchasing a Ford F600 truck.
The announcement was made by Erik S. Siebert, U.S. Attorney for the Eastern District of Virginia, and Kareem A. Carter from the IRS Criminal Investigation Washington D.C. Field Office after sentencing by U.S. District Judge Roderick C. Young. Assistant U.S. Attorney Carla Jordan-Detamore prosecuted the case.
The public is encouraged to report businesses suspected of tax non-compliance using IRS Form 3949-A or visiting the IRS website for more information on reporting tax fraud.
Further details are available on the websites of the U.S. Attorney’s Office for the Eastern District of Virginia and the District Court for the Eastern District of Virginia or through PACER under Case No. 3:24-cr-107.