Englewood woman sentenced to 28 months in federal prison for failure to pay over $4.7 million in employment taxes
DENVER – Beth Ann Pettyjohn, age 61, of Englewood, Colorado, was sentenced yesterday by U.S. District Court Judge William J. Martinez to serve 28 months in federal prison for failure to pay over employment tax, United States Attorney John Walsh and IRS Criminal Investigation Special Agent in Charge Stephen Boyd announced. Following her prison sentence, Pettyjohn was ordered to spend 3 years on supervised release. Judge Martinez also ordered her to pay $4,669,532.05 in restitution to the IRS, as well as a $25,000 fine.
Pettyjohn waived her right to be indicted by a federal grand jury on January 17, 2013, and was charged by Information. 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.
“Tax fraud is not a victimless crime,” said U.S. Attorney John Walsh. “The taxpayers and the employees of the defendant are victims, and when someone commits this crime not only do they have to pay the taxes to the IRS, they also face prison time.”
“Employers who fail to remit employment taxes are victimizing legitimate businesses by creating an unfair competitive advantage over those businesses that lawfully pay their share of employment taxes,” said Stephen Boyd, Special Agent in Charge, IRS Criminal Investigation, Denver Field Office. “As this sentence demonstrates, there are real consequences for committing employment tax fraud.”
This case was investigated by IRS-Criminal Investigation and prosecuted by Assistant U.S. Attorney Matt Kirsch.