Behold This CEO’s “Sick” Tax Crimes

A CEO of two Denver-area technology companies was found guilty on a host of charges, including impeding the administration of tax laws, conspiracy to defraud the U.S. government, and conspiracy to steal employee benefit plan funds. He’s been sentenced to over six years in federal prison. More tragically, however, his deception led to his employees being denied healthcare claims totaling over $135,000 and losing over $68,000 in 401(k) withholdings.

The CEO claimed to offer employees of one of his companies a healthcare benefit program; the company would contribute $600 per month to each participant’s premiums, with participating employees responsible for the remainder of the premium cost. Only the company never forwarded the money to the health insurance carrier. The coverage was terminated, healthcare claims were denied, and employees were left stunned and wondering what happened to their money while they faced mounting medical bills. A similar scheme occurred with employees’ 401(k) plans. Money was collected, but never put into the plans.

And then there was a little issue with payroll taxes. For more than five years, the CEO knowingly avoided paying what totaled to be nearly $5 million in unpaid payroll taxes between the two companies. The IRS Criminal Investigation Department refers to this practice as “pyramiding,” which occurs when a business withholds taxes from its employees but intentionally fails to forward them to the IRS. After a liability accrues, the individual will often start a new business and begins to accrue a new liability.

Once the IRS took notice, the CEO in this case transferred funds from business accounts to his personal account to avoid IRS levies. Finally, he conspired to falsely tell customers the IRS levies they received were in error, to prevent those customers from sending money to the IRS.

For more on the case, see this release by the Colorado U.S. District Attorney’s Office.

Out of the 1,714 abusive tax schemes like this one that the IRS investigates, more than 60% result in sentencing. Those aren’t great odds, which this particular CEO found out. But it doesn’t take a criminal mastermind to start defaulting on things like payroll taxes, either. As we once covered here, growing businesses can get behind on payroll taxes remarkably fast. And while those cases don’t always include criminal intent, they will often result in drastic measures by the IRS, like levying a trust fund penalty, which makes the business owner personally liable for unpaid business taxes. For questions or concerns, feel free to contact us.
Image via 123rf.com

October 15, 2019

Client Spotlight

A terrifying home invasion involving men with masks and guns set Pam Wood on an unexpected path to business ownership in 1981….
What happens when you combine a passion for creating, a knack for business, and deep family values? For Scott Klingler, owner of MergeWorks, it resulted…
Bessie M. Irizarry loves embracing a good challenge. It’s one of the many reasons she’s earned respect as a female engineer and business owner in…
San Antonio native Mark Lopez can’t recall a time he didn’t envision himself following the footsteps of his father, a project manager, into the construction…
Siew Pang knows that the key to unlocking the American dream can be discovered by embracing unexpected opportunities….
If you’re a San Antonian, you may not want to imagine your weekend without brunch at the city’s beloved Magnolia Pancake Haus….
Greg Thompson has long respected money and how it can catalyze greater things….
You may not be aware of it, but Don Lasseter has helped you throw a party. How do we know that? He’s the franchise owner…
Land surveyors aren’t known for exceptional customer service. But why shouldn’t they be? David Breaux set out in 1998 to prove that treating customers right…
When Lance Rose sees a business need, he fills it. That’s how he and Terri, his wife of 30 years, have evolved into the proud…
Matt and Lara Bruhn met while in graduate school at Harvard. He served as an officer and F-15C pilot with the U.S. Air Force….
Growing up in Piedras Negras, Coahuila, Mexico—just south of Texas along the Rio Grande—Oscar E. Flores dreamed of becoming a designer….

Blogs and Articles

$125,000 Business Inventory Tax Exemption Heading to Texas Voters

$125,000 Business Inventory Tax Exemption Heading to Texas Voters

Read More

Beware of Modern Ponzi Schemes

We’ve entered a new era of Ponzi schemes. A record number of the scams have been estimated in 2023 alone, an amount that doubled in...

Beware of Modern Ponzi Schemes

Read More

Bankler Partners, LC, Expands into a New Name and Space

This is a pivotal moment for our firm. The transformation to Bankler Partners and move to our new, modern space represents our dynamic growth and...

Bankler Partners, LC, Expands into a New Name and Space

Read More

Digital Assets and Your Taxes

You may have reveled in the Wild West days of cryptocurrency and other digital assets, but we’re entering an era of meticulous record keeping and...

Digital Assets and Your Taxes

Read More

The Goldilocks Rule for Tax Withholding

If you’re like half of Americans this year, you are more dependent on your tax refund to pay for necessities than you have been in...

The Goldilocks Rule for Tax Withholding

Read More

How Inherited Assets Affect Your Taxes

Inheriting assets can be a financial blessing, but it also raises essential tax questions that many heirs overlook. How you manage those assets can have...

How Inherited Assets Affect Your Taxes

Read More

Getting Hit by Someone Else’s Bankruptcy

Finding out that another business or individual who owes your business money has declared bankruptcy can feel like a kick to the stomach....

Getting Hit by Someone Else’s Bankruptcy

Read More

Welcome to Texas: Cutting Tax Ties with Your Previous State

San Antonio is currently one of the fastest-growing metro areas in the nation. If you’re among our new residents, welcome! Before you enjoy the tax-friendly...

Welcome to Texas: Cutting Tax Ties with Your Previous State

Read More

Reaching the Unreachable IRS

Reaching the IRS has always been challenging. With the IRS workforce reduction continuing, many believe your odds of reaching a warm body to resolve a...

Reaching the Unreachable IRS

Read More

How Is Costco Gold Taxed?

Gold, silver, and other precious metals have emerged as standout assets in today’s unpredictable economy due to their ability to remain somewhat independent from stock...

How Is Costco Gold Taxed?

Read More

Yes, You Do Still Have to File Taxes

Early filing numbers are measurably down this year, data security concerns are high, and IRS staffing is in disarray. But if you’re considering scrapping it...

Yes, You Do Still Have to File Taxes

Read More

Retirement Plan Perks for Texas Small Businesses

Retirement Plan Perks for Texas Small Businesses

Read More

Top 6 Worst Social Media Tax Tips

Top 6 Worst Social Media Tax Tips

Read More

What’s Happening with the Corporate Transparency Act?

In March 2025, the Financial Crimes Enforcement Network (FinCEN) issued an interim final rule removing the requirement for U.S. companies to report beneficial ownership information...

What’s Happening with the Corporate Transparency Act?

Read More

Love & Marriage & Your Business Assets

Love & Marriage & Your Business Assets

Read More

Now Accepting New Clients

Let’s Start the Conversation

Let’s take a look at your finances together. We offer a complimentary 1-hour call to review your past tax returns. If we see a way to help you, we will.