Englewood woman pleads guilty for failure to pay over $4.7 million in employment taxes
DENVER – Beth Ann Pettyjohn, age 60, of Englewood, Colorado, pled guilty Monday, (March 11, 2013) before U.S. District Court Judge William J. Martinez for failure to pay over employment tax, United States Attorney John Walsh and IRS Criminal Investigation Special Agent in Charge Stephen Boyd announced. Pettyjohn waived her right to be indicted by a federal grand jury on January 17, 2013 and was charged by Information. Pettyjohn is schedule to be sentenced by Judge Martinez on September 10, 2013 at 10:00 am.
According to the stipulated facts contained in the plea agreement, as well as the information, Pettyjohn is the co-owner and vice president of Overhead Door Company of Denver (OHD). From September 2003 to June of 2009, Beth Ann Pettyjohn stopped paying over the payroll taxes (income taxes withheld & FICA) OHD withheld from employee wages as well as the matching portion of FICA totaling almost 4.7 million dollars owed to the IRS. Pettyjohn admitted that she knew she had a duty to pay over the amounts withheld from employee wages, but she told an IRS agent she failed to do so because the IRS was not beating down her door. Pettyjohn managed the accounting department at OHD and determined which bills were paid, and then issued and signed the related checks. Pettyjohn has a bachelor's degree in business with a major in accounting, and she has an inactive CPA license issued by the State of Colorado. During the relevant years, the defendant employed both hourly and salaried employees.
During the period in question and for many prior years, Pettyjohn and her husband lived in a home valued at over $1 million dollars. Between 2005 through 2007, Pettyjohn received wages from OHD averaging approximately $133,000 per year. Also, after Mrs. Pettyjohn stopped paying over the payroll taxes at OHD, she purchased pieces of real estate. In August of 2007, Mr. and Mrs. Pettyjohn purchased a condominium in Gypsum, Colorado for $349,900 with a $100,000 down payment. In 2009, Pettyjohn paid $285,000 in cash to purchase her son's condominium in suburban Denver. The condo was resold to an unrelated party a few months later.
“An employer who withholds payroll taxes from her employees, but keeps those tax amounts for herself instead of paying them to the IRS, has committed a theft that hurts both her employees and the taxpayers of the United States,” said U.S. Attorney John Walsh. “In this case, the defendant is well educated, knows the tax laws, and knows that the tax laws applied to her company, like every other. She now faces the criminal consequences of her illegal acts.”
“Employers who commit Employment Tax Fraud by failing to remit employment taxes are not only defrauding the United States government, they are creating financial havoc for their employees,” said Stephen Boyd, Special Agent in Charge, IRS Criminal Investigation, Denver Field Office.
Pettyjohn was charged with one count of failure to pay over tax. She faces not more than 5 years in federal prison, and a fine of up to $250,000.
This case was investigated by IRS-Criminal Investigation and prosecuted by Assistant U.S. Attorney Matt Kirsch.