Failure to pay employment taxes nets Utah man prison term
A Utah man will spend 51 months in prison for failing to account for and pay employment taxes on wages withheld from workers at his staffing services company.
U.S. District Judge David Nuffer on Thursday also ordered Richard R. Whatley to pay $541,514 in restitution to the IRS. Whatley is a former owner of Alliance Staffing Management Inc.
A federal grand jury indicted Whatley in January 2010 on five counts of willful failure to pay employment taxes for three different employee leasing companies he allegedly operated and controlled between 2001 and 2006.
The other two companies were American Employment Group Inc. and Intermountain Consulting Group Inc. Prosecutors estimated the tax loss associated with Whatley's criminal conduct totaled more than $2.3 million.
Whatley pleaded guilty in January to one of the charged counts, admitting that as a part owner of Alliance Staffing he had the ability to control the company's finances and decide which bills to pay. Whatley also admitted that in the fourth tax quarter of 2003, he collected taxes from employees' wages but then failed to turn that money over to the IRS.
Whatley previously served 27 months in prison after being convicted of mail fraud and interstate transportation of stolen funds; he completed probation in that earlier case in November 2003.
See more about comments here.