Owner of Landover Business Pleads Guilty to Failing to Pay over $2.2 Million in Employment Taxes
While Failing to Pay Employment Taxes, Spent Hundreds of Thousands of Dollars of Corporate Money for His Personal Benefit
Greenbelt, Maryland - Alphonso Tillman, age 44, of Fort Washington, Maryland pleaded guilty today to failing to account for and pay over employment taxes.
The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein and Special Agent in Charge Rick A. Raven of the Internal Revenue Service - Criminal Investigation, Washington, D.C. Field Office.
“Using monies withheld from your employees’ compensation for personal gain is reckless,” said Rick A Raven, Special Agent in Charge, IRS Criminal Investigation, Washington DC Field Office. “Business owners are responsible to withhold and pay over income taxes from their employees’ compensation to the IRS. Failing to do so is a serious offense for which Mr. Tillman is being held accountable.”
According to his plea agreement, Tillman was the president and sole owner of Remote Surveillance Technology Solutions, Inc. (RSTS), and its successor, Remote Surveillance Technology Services, LLC, (RSTServ). The companies were headquartered in Landover, Maryland and provided security guards to protect commercial and residential properties in Maryland, Virginia, Pennsylvania and the District of Columbia.
RSTS and RSTServ withheld taxes from their employees’ paychecks, including federal income taxes, medicare and social security taxes (payroll taxes). RSTS and RSTServ were required to pay over the payroll taxes to the IRS on a periodic basis.
In addition, RSTS and RSTServ were required to file quarterly Forms 941 setting forth the amount of wages and other compensation subject to withholding, income tax withheld, social security and Medicare taxes due, and the total tax deposits made to the IRS. Tillman caused RSTS and RSTServ to fail to file any of the Forms 941 or pay the payroll taxes due, with the exception of payments made by RSTS to the IRS as a result of IRS collection efforts.
Finally, between 2005 and 2008,Tillman caused RSTS and RSTServ to make hundreds of thousands of dollars of expenditures out of their business bank accounts for Tillman’s personal benefit while, at the same time, failing to pay over to the IRS payroll taxes withheld from employee paychecks.
The total amount of tax loss resulting from Tillman’s failure to pay taxes owed by RSTS and RSTServ is $2,205,991.40
Tillman faces a maximum sentence of five years in prison followed by three years of supervised release and a fine of $250,000. As part of his plea agreement, Tillman has agreed to pay $2,205,991.40 in restitution to the IRS. U.S. District Judge George L. Russell III scheduled sentencing for January 23, 2013 at 9:30 a.m.
United States Attorney Rod J. Rosenstein praised the IRS-Criminal Investigation for its work in the investigation and thanked Assistant U.S. Attorney Cheryl L. Crumpton and Special Assistant U.S. Attorney Daren H. Firestone, of the U.S. Justice Department, Tax Division, who are prosecuting the case.