FOR IMMEDIATE RELEASE|
FRIDAY, FEBRUARY 27, 2004
TDD (202) 514-1888
MANAGER OF POPULAR NEBRASKA BAR AND GRILL PLEADS GUILTY TO TAX CHARGE
WASHINGTON, D.C. - Eileen J. O’Connor, Assistant Attorney General for the Justice Department’s Tax Division, and Nancy Jardini, Chief for the IRS Criminal Investigation Division, today announced that Michael Dane Webb pled guilty to a felony charge of willfully failing to account for and pay over employment taxes. Mr. Webb faces a maximum potential sentence of five years’ imprisonment followed by up to three years’ supervised release, a $250,000 fine and liability for the costs of prosecution. Sentencing has been scheduled for May 14, 2004. Today’s plea took place at the federal courthouse in Omaha, Nebraska.
Employers are required to withhold Social Security, Medicare and income taxes from their employees’ pay, deposit those “trust funds” for payment to the United States, and file employment tax returns reporting those amounts. Mr. Webb admitted in his plea agreement that he conducted business through Barry Good, Inc., doing business as Barry’s Bar and Grill in Lincoln, Nebraska. He also admitted he had withheld from his employees’ wages, Social Security, Medicare, and income taxes, but did not report, deposit or pay over those withholdings during 1996, 1997 and 1998.
The government also alleged that Mr. Webb had conducted the same type of scheme at another bar, Barry’s West, located in Scottsbluff, Nebraska. In his plea agreement, Mr. Webb admitted he had between sixty and seventy employees during those years and his three-year scheme allowed him to accumulate from their wages approximately $120,000 in “trust funds,” all of which he should have paid over on behalf of his employees, instead using it for other purposes.
“The Department of Justice is dedicated to enforcing our nation’s tax laws,” said Assistant Attorney General O’Connor. “Unscrupulous employers violate those laws, and their employees’ trust, when they misuse the taxes they withhold from paychecks. Offenders face serious consequences, including potential criminal prosecution.”
“IRS Criminal Investigation is working aggressively to investigate and recommend for prosecution employers who collect taxes from their employees but fail to pay over those taxes to the IRS,” said Nancy Jardini, Chief, IRS Criminal Investigation. “Our goal at the IRS is to ensure that the tax system is administered with fairness to all. Legal actions, such as today's guilty plea, send a strong message to the honest, compliant taxpayers that tax evasion will not be tolerated by the IRS.”
Tax Division trial attorneys Brian D. Bailey and Charles A. O’Reilly prosecuted the case along with special agents of the Internal Revenue Service whose assistance was essential to the successful investigation and prosecution of the case.