SNOHOMISH WOMAN SENTENCED TO PRISON FOR FAILING TO PAY WITHHELD EMPLOYEE EMPLOYMENT AND INCOME TAXES
Flooring Company Owner Failed to Pay Nearly $500,000 to IRS
LYNDA J. MEAD, 50, of Snohomish, Washington, was sentenced today in U.S. District Court in Seattle to 33 months in prison, three years of supervised release, and $537,222 in restitution for Willful Failure to Pay Over Tax. MEAD, the owner and operator of CM Flooring, Inc. and Carl Mead Flooring Design, failed to pay to the IRS nearly $475,000 that had been withheld from employee paychecks and was owed in employment taxes. The loss to the government and taxpayers will be even greater, as those employees who were cheated by MEAD will still be able to claim their social security and medicare benefits. At sentencing U.S. District Judge Ricardo S. Martinez said, “this is a very serious offense.... every other person who was working for the Meads and whose tax money never made it past the Meads is a victim.“
MEAD operated the flooring company under the name CM Flooring, Inc or Carl Mead Flooring Design from July 1998, to December 2006. Over that time period MEAD withheld $357,000 from employee pay, but never paid the funds to the Internal Revenue Service. Over that same period of time MEAD also failed to pay more than $116,000 of the employer’s share of the employment taxes. When an employee complained that a benefit statement he received from the Social Security Administration did not reflect his employment with the flooring company, MEAD claimed she must have submitted his social security number incorrectly and said she would fix it – she never did. In another instance, MEAD was withholding a portion of an employee’s wages for child support, but never paid the monies over to the state. The employee’s driver’s license was suspended as the state thought he was purposefully eluding his child support obligation.
At the same time she was failing to meet her obligations to her employees and to the government, MEAD was living a lavish lifestyle and losing large sums gambling. She took trips to Hawaii, the Bahamas, Disneyland and SeaWorld, paid $18,000 cash for a truck, and bought her son a Ducati motorcycle. She gambled away more than $400,000 at casinos, including losing nearly $225,000 in slot machines over a period of just 18 months.
Currently Washington State is refusing to grant MEAD and her husband a contractors license because of a number of complaints from customers who say they were defrauded by the couple. In asking for a significant sentence Assistant United States Attorney Tessa Gorman told the court how MEAD’s theft impacted many lives. “Lynda Mead’s crime directly harmed her own employees, leaving one fighting with the State to regain his license, leaving others having to navigate government bureaucracies, to receive the benefits they paid for with their hard-earned money. Meanwhile, Lynda Mead used their money to go on trips, to gamble, to buy expensive items for family members. Moreover, the Meads defrauded many citizens of this District by contracting without a license and failing to perform services, leaving regular people out thousands of dollars,” Gorman wrote in her sentencing memo.
Judge Martinez noted that MEAD had state convictions for theft dating back twenty-five years. “For that lengthy period she has also been victimizing others out in the community.... She has an ongoing history of deceit, falsehoods and scams.”
MEAD was indicted May 5, 2008 and pleaded guilty on September 30, 2008. MEAD has been in custody since October 30, 2008, for violating the terms of her release by engaging in on-line gambling.
The case was investigated by Internal Revenue Service Criminal Investigation (IRS-CI).
The case was prosecuted by Assistant United States Attorney Tessa Gorman.
For additional information please contact Emily Langlie, Public Affairs Officer for the United States Attorney’s Office, at (206) 553-4110.