Feb. 12, 2009
TWO CORPUS CHRISTI BUSINESSMEN SENTENCED TO PRISON IN PAYROLL TAX FRAUD CONSPIRACY
(CORPUS CHRISTI, Texas) – Two Corpus Christi businessmen have been sentenced to federal prison for Conspiring to Defraud the Internal Revenue Service (IRS), acting United States Attorney Tim Johnson announced today. Stephen Alan Lyons, 53, and Bryan Timothy Lyons, 52, pleaded guilty to the charges July 29, 2008.
At today’s hearing, United States District Judge John D. Rainey sentenced Bryan Lyons to 18 months in federal custody, followed by three years of supervised release and a fine of $10,000. Stephen Lyons received a sentence of 12 months and one day to be followed by three years of supervised release and a fine of $10,000. The defendants had previously turned over the full amount of back taxes owed to the IRS.
Stephen and Bryan Lyons, owned and were responsible for the day to day operation of B & T Rents, a party equipment rental company in Corpus Christi. As an employer, they were required to collect, truthfully account for and pay payroll taxes to the United States. Payroll taxes include federal income taxes withheld from each employee's wages, Social Security taxes withheld from each employee's wages, employer Social Security contributions, Medicare taxes withheld from employee's wages and employer Medicare contributions.
At the time they pleaded guilty Stephen and Bryan Lyons admitted that between March 16, 2000, and Nov. 4, 2004, they withheld the employee portion of payroll taxes from the wages of B & T Rents' employees but did not pay either the retained funds or the required employer contributions to the Department of the Treasury. In an effort to conceal the existence of the substantial payroll taxes owed by B & T Rents, Stephen and Bryan Lyons admitted they used nominees to act as a "front" for the company in order to conceal the true ownership of the business. Further, they acknowledged they did not file accurate quarterly payroll tax returns with the IRS. The defendants also distributed W-2 wage and tax statements to their employees but did not submit the records to the IRS in an effort to conceal the existence of withheld employee income taxes not paid to the United States. Stephen and Bryan Lyons continued this illegal behavior until their tax fraud indictment in April 2008. Between tax year 2000 and the first quarter of 2008, Stephen and Bryan Lyons attempted to defraud the United States of more than $215,000.
The case was investigated by agents from the IRS and was prosecuted by Assistant United States Attorney Robert D. Thorpe Jr.
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