Steven M. Dettelbach, United States Attorney for the Northern District of Ohio, announced today that John D. Matuszwski was sentenced to three years probation, with one year in home detention with location monitoring, and was fined $10,000 for attempting to evade employment taxes. Matuszwski owed those taxes with respect to wages he paid as sole proprietor of a roofing and siding business he operated in Niles, Ohio, under the name Matuszwski Roofing and Siding. According to court records, Matuszwski is a resident of Girard, Ohio.

Matuszwski previously pleaded guilty to a one-count Information pursuant to a written plea agreement in which he acknowledged the following conduct. For the years 2003 through 2006, Matuszwski paid his employees their gross wages by check and cash without withholding Federal Insurance Contributions Act (FICA) taxes or income taxes, as he knew he was required to do. He paid some regular employees a portion of their wages by check and a portion in currency. He paid some other employees only in currency. He attempted to evade the employment taxes he knew to be owing on those wages by failing to file quarterly employer’s tax returns, Form 941, with the Internal Revenue Service (IRS) or to pay those employment taxes to the IRS and by further concealing the wages and employment taxes by (1) paying a substantial amount of the wages in currency; and (2) issuing Forms 1099 to his employees and the IRS only for the portion of the wages paid by checks, which falsely reported those amounts as non-employee compensation. According to the plea agreement, Matuszwski failed to report and pay FICA taxes (including both the employees’ and employer’s shares) for those years in the combined total of approximately $165,851. In addition to the charged conduct, Matuszwski admitted that he also failed to pay employment taxes for 2002 and unemployment taxes for 2002 - 2006, bringing his total unreported taxes to $220,299.

During the sentencing hearing, the Court noted that shortly after IRS criminal investigators executed a search warrant on his business premises, Matuszwski filed delinquent employment tax returns and paid his $220,299 employment tax liability. He then pursued an expedited program to assist the IRS investigation and enter his guilty plea. Matuszwski has agreed to cooperate with the IRS with regard to possible additional tax obligations, including civil penalties and interest.

The government’s case was prosecuted by Assistant United States Attorney John M. Siegel, following an investigation by the Internal Revenue Service, Criminal Investigation, Canton, Ohio.