Second Garrard County Man Pleads Guilty In $15 Million Tax Fraud Scheme

[nitpicker]

https://www.justice.gov/usao-edky/pr/second-garrard-county-man-pleads-guilty-15-million-tax-fraud-scheme

Department of Justice
U.S. Attorney’s Office
Eastern District of Kentucky

FOR IMMEDIATE RELEASE
Thursday, August 1, 2019

Second Garrard County Man Pleads Guilty In $15 Million Tax Fraud Scheme

LEXINGTON, Ky. – Warren Griffin, II, 50, of Lancaster, Kentucky pleaded guilty today, before Chief United States District Judge Karen K. Caldwell, to joining with Clarence Michel, Jr. in a $15 million tax fraud scheme. As part of this plea agreement, Griffin agreed to pay $2.8 million in restitution to the Internal Revenue Service.

According to his plea agreement, Griffin recruited and paid associates to open staffing companies and bank accounts, whose primary purpose was to hide from the IRS the fact that Griffin and Michel’s businesses had failed to pay $14,671,184 in federal payroll taxes. Griffin obtained $2,118,584 of that money. During this time, Griffin also underpaid his personal federal income taxes by $700,428.

Michel had previously pleaded guilty and been sentenced to 71 months in federal prison and ordered to pay over $19 million in restitution. Griffin is scheduled to be sentenced on September 11, 2019. He faces up to 5 years in prison and a maximum fine of $250,000 or twice the amount of the loss. However, any sentence will be imposed by the Court after consideration of the U.S. Sentencing Guidelines and the federal statutes.
(snip)

[TheFarseer]

1. Not sure I understand

He had regular employees, but treated them as temps when reporting to the IRS? But wouldn’t the other company just be responsible for payroll taxes? Article doesn’t really explain what the scheme was but if he was cheating the IRS, I’m glad he got caught.

Upon reading another article, he withheld payroll taxes and just kept the money. The other companies just made it harder to track by constantly changing names and owners. It’s actually not that elaborate of a scheme.

[mercuryblues]

2. He wasn't paying the payroll taxes

By saying they were temps. He then had associates open temp staffing companies. My bet is that the staffing companies didn't have employees to temp out, so also paid no payroll taxes. Did those companies file for bankruptcy or simply shut down when they moved on to the next?

It sounds like these guys got off easy. 5 -7 years for stealing 15 million. I'd get a harsher sentence if I stole a car.