Monroe Businessman Sentenced for Tax Crimes
Madison, Wis. - John W. Vaudreuil, United States Attorney for the Western District of Wisconsin, announced that Donald Penniston, 45, of Brodhead, Wis. was sentenced yesterday by U.S. District Judge Barbara B. Crabb to two years in prison for failing to pay employment taxes and stealing funds from the employee retirement plan. Penniston was also ordered to pay restitution to the retirement plan. Penniston pleaded guilty to the charges on February 8, 2011.
Penniston was the President of Canton Promotions, LTD, a graphic design and screen printing business in Monroe, Wis. As an employer, Penniston had a duty to withhold employment taxes from the wages of his employees and then pay those over to the Internal Revenue Service. Those employment taxes included federal income taxes and FICA taxes (which are social security and medicare taxes). At his plea hearing in February, Penniston admitted that he withheld employment taxes from his employees' payroll checks, but willfully failed to pay over those taxes to the IRS.
Penniston also admitted that he stole approximately $11,000 in funds belonging to Canton Promotion's employee retirement plan, which was a simple IRA fund. Penniston admitted that he withheld employee contributions for the IRA fund from his employees' payroll checks, but then willfully failed to pay that money over to the fund.
The money withheld from Penniston's employees that was not paid over to the IRS or to the IRA fund remained in the company's bank accounts, where it was used by Penniston to pay for, among other things, his own personal living expenses.
Judge Crabb commented at sentencing that Penniston's actions were not mistakes or the result of bad bookkeeping, but instead were conscious decisions that he made to engage in criminal conduct.
The charges against Penniston were the result of an investigation conducted by the Internal Revenue Service and U.S. Department of Labor. The prosecution of the case has been handled by Assistant U.S. Attorney Meredith P. Duchemin.
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