A Florida man has pleaded guilty in federal court to failing to remit over $20 million in employment taxes, a case that highlights serious fraud in payroll services. The owner of a local payroll company admitted to employment tax fraud and submitting false tax returns, according to officials.
Court documents indicate that from 2014 to 2022, the individual provided payroll services to small businesses in St. Lucie, Martin, and Palm Beach Counties. While his company withheld Social Security, Medicare, and federal income taxes from employees’ paychecks, the owner diverted these funds for personal use instead of remitting them to the IRS.
He charged clients the full amount of their tax liabilities but filed inaccurate tax returns that underreported the actual sums owed. Investigators found that he utilized the misappropriated funds to acquire luxury items, including a multimillion-dollar home, multiple properties, a Valhalla 55 Sport Yacht, a Falcon 50 Aircraft, and an extravagant collection of cars, which featured brands like Ferrari, Porsche, and Rolls Royce.
The total tax loss due to these fraudulent activities exceeds $22 million, funds that were supposed to be held in trust for clients and paid to the IRS.
The accused faces a potential maximum sentence of five years in prison, along with supervised release, restitution, and other financial penalties. A date for sentencing has not yet been announced, as the federal judge will assess the case based on the U.S. Sentencing Guidelines and related statutory factors.
The investigation was conducted by IRS Criminal Investigation, and the case was announced by key officials at the Department of Justice. The prosecution will be handled by attorneys specialized in tax law.
