They Used Funds Withheld
from the IRS to Pay for Luxury Cars and Private School Two former staffing company owners were
sentenced to prison today for payroll tax fraud, announced Principal Deputy
Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax
Division and U.S. Attorney D. Michael Dunavant.
According
to court documents and trial testimony, from 2005 through 2015, Mark and
Jayton Stinson operated a temporary staffing company that provided services
to businesses. The staffing company’s standard contract with its
customers provided that the staffing company was responsible for withholding
employment tax from its employees’ wages and paying over the amounts withheld
to the Internal Revenue Service (IRS).
The
Stinsons failed to pay over $2.8 million in withholdings and other
employment taxes due to IRS, failed to timely file employment tax returns and
filed false employment tax returns. In an effort to avoid making payments
to the IRS, the Stinsons changed the name and structure of the company
multiple times after accumulating employment tax liabilities, operating as Jayton
Stinson Connex Staffing & Janitorial Service, Connexx Staffing Services
LLC, Connexx Staffing Services Inc., and Complete Employment Agency.
The
Stinsons also conspired to impede efforts by the IRS to collect on the
employment tax liabilities owed by their companies. For example, the Stinsons
made false representations to the IRS about their control of the staffing
company and their knowledge of the requirement to truthfully account for and
pay over the employment taxes, falsely identified multiple family members as
company executives, placed the staffing company in the names of nominees who
did not have control over the business operations, and established payment
arrangements intended to impede an IRS levy placed on their customer payments.
The Stinsons used the withheld funds to pay for personal expenses,
including a Mercedes-Benz, a Cadillac Escalade, mortgage payments, and private
school tuition for their children.
In
addition to the terms of imprisonment, U.S. District Court Judge John T.
Fowlkes, Jr. ordered the Stinsons to serve terms of supervised release
and to pay restitution of $ 2.8 million.
Principal
Deputy Assistant Attorney General Zuckerman and U.S. Attorney Dunavant
commended special agents of IRS-Criminal Investigation, who investigated the
case, and Assistant U.S. Attorney Damon Griffin and Trial Attorney Nathan
Brooks, who prosecuted the case.
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