Former Owner of Employee Leasing Company Sentenced to Federal Prison for Failing to Pay Payroll Taxes to the IRS
The Justice Department and the Internal Revenue Service (IRS) announced today that Richard R. Whatley, a former owner of Alliance Staffing Management Inc. (ASM), was sentenced to 51 months in prison today for willfully failing to account for and pay over employment taxes. Whatley was also ordered to pay $541,513.61 in restitution to the IRS. Whatley appeared before U.S. District Judge David Nuffer in Salt Lake City.
In January 2010, a federal grand jury charged Whatley with five counts of willfully failing to account for and pay over employment taxes, relating to three different employee leasing companies that he allegedly operated and controlled between the years 2001 and 2006. The employee leasing companies included American Employment Group Inc., ASM and Intermountain Consulting Group Inc. The tax loss associated with Whatley’s criminal conduct during these years totaled more than $2.3 million. Whatley pleaded guilty in January 2013 to one of the charged counts.
According to the plea agreement, during the 2002 through 2004 tax years, Whatley held an ownership interest in and had the ability to control the finances of ASM, an employee leasing company. Whatley’s control included determining the amount of employment taxes that had to be paid over to the IRS and the authority to decide which bills would be paid and which bills would not be paid. As charged in the superseding indictment, in the fourth tax quarter of 2003, Whatley caused the collection of employment taxes from ASM’s employees’ wages and then willfully failed to pay over $541,513 for the employees’ portion of employment taxes to the IRS.
The case was investigated by special agents of IRS - Criminal Investigation and was prosecuted by Trial Attorneys Christopher J. Maietta and Stuart A. Wexler of the Justice Department’s Tax Division.
More information about the Tax Division and its enforcement efforts is available at www.usdoj.gov/tax .