Thursday, April 12, 2018

DOJ: Michigan Healthcare Management Company Employees Indicted in Employment Tax Scheme

This "not paying payroll taxes" scheme seems to be the latest trend for foreign registered corporations here in Michigan.

I bet there is more to this story.


A federal grand jury sitting in Flint, Michigan, has returned an indictment, which was unsealed yesterday, charging two managers of a healthcare management services company with failing to pay over payroll taxes to the Internal Revenue Service (IRS) and a third employee of the company with attempting to obstruct the internal revenue laws, announced Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division.

According to the indictment, Edward Cespedes and Joseph DeSanto managed and exercised control over the finances of a healthcare management services company, Integrated HCS Practice Management, operating in Southfield, Michigan.  Gerri Avery was allegedly employed by the company as an executive assistant and was responsible for paying expenses.
The indictment charges that Cespedes and DeSanto from October 2013 to February 2014 failed to pay over to the IRS the full amount of payroll taxes withheld from employee paychecks, despite having an obligation to do so.  Cespedes and DeSanto are alleged to have used the misappropriated money to pay the operating expenses of the company and to pay their own personal expenses.
The indictment further alleges that from July 2014 to July 2017, Gerri Avery obstructed the IRS’ attempts to collect the past due payroll taxes by providing materially false information to IRS collection officials.
If convicted, Cespedes and DeSanto face a statutory maximum sentence of five years in prison on each count of failure to pay over payroll taxes and Avery faces a maximum sentence of three years in prison on the obstruction count.  The defendants also face a period of supervised release, restitution, and monetary penalties.  An indictment merely alleges that crimes have been committed.  A defendant is presumed innocent until proven guilty beyond a reasonable doubt. 
Acting Deputy Assistant Attorney General Stuart M. Goldberg commended special agents of IRS Criminal Investigation, who conducted the investigation, and Tax Division Trial Attorneys Mark McDonald and William Guappone, who are prosecuting the case.
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