News and Press Releases

News and Press Releases

Man pleads guilty to failure to pay employment withholding taxes

FOR IMMEDIATE RELEASE
May 8, 2012


MINNEAPOLIS—Yesterday in federal court in St. Paul, one of the owners of Gamma Vacuum, located in Shakopee, pleaded guilty to failing to pay federal income and employment taxes withheld from workers. Stephen Paul Clough specifically pleaded guilty to one count of willful failure to pay over tax. Clough, who was charged on April 27, 2012, entered his plea before United States District Court Judge Richard H. Kyle.

In his plea agreement, Clough admitted that from 2003 to 2010, he failed to pay the Internal Revenue Service (“IRS”) appropriate income and employment taxes withheld from the wages of the employees at the company. Clough was solely responsible for Gamma Vacuum’s bookkeeping, including the withholding and payment of payroll taxes. Instead of making those payments, he admittedly used the funds to pay company expenses. Gamma Vacuum manufactures pumps and related products. Clough’s criminal behavior resulted in a tax loss to the IRS of $944,134.29.

For his crime, Clough faces a potential maximum penalty of five years in prison. Judge Kyle will determine his sentence at a future hearing. This case is the result of an investigation by the IRS-Criminal Investigation Division. It is being prosecuted by Assistant U.S. Attorney William J. Otteson.

Per U.S. Department of Justice policy, the U.S. Attorney’s Office is not allowed to provide the age and city of residence for defendants charged in criminal tax cases.

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