April 9, 2010
DENVER MAN INDICTED FOR FAILURE TO PAY THE IRS $900,000 AND THEFT FROM 401k PLAN
DENVER – John C. Walshe, age 64, of Denver, Colorado, was indicted by a federal grand jury in Denver on April 5, 2010, on charges of failure to pay taxes and theft from a employee benefit plan, the U.S. Attorney’s Office, IRS Criminal Investigation, and the U.S. Department of Labor Employee Benefits Security Administration announced. John C. Walshe received a summons to appear in U.S. District Court in Denver on April 20, 2010, where he will be advised of the charges pending against him.
According to Indictment, John C. Walshe was the owner and principal officer of Finzer Business Systems of Colorado, Inc. d/b/a Finzer Imaging Systems (“Finzer”) located in Denver, Colorado. Walshe was required to withhold from payroll checks issued to his employee’s amounts corresponding to federal income taxes on their taxable wages and salaries, Social Security taxes and Medicare taxes. Walshe and his company, Finzer, were required to aggregate and pay over these amounts to the Internal Revenue Service by depositing the amounts with a financial institution on a periodic basis.
During the period for quarters ending June 30, 2005, through December 31, 2007, Walshe deducted and collected from the taxable wages of the Finzer employees, federal income taxes, Social Security taxes, and Medicare taxes totaling over $912,286. Walshe willfully failed to pay the Internal Revenue Service the $912,286 in federal income taxes, Social Security taxes, and Medicare taxes withheld from the paychecks of Finzer employees.
Furthermore, John C. Walshe, did allegedly steal and unlawfully and willfully abstract and convert to his own use, moneys, funds, securities, premiums, credits, property and other assets in the approximate amount of $18,853 of Finzer Business Systems of Colorado, Inc. 401(k) Plan, an employee pension benefit plan subject to Title I of the Employee Retirement Income Security Act of 1974, and a fund connected with such plan.
“Employers who fail to remit employment taxes are creating an unfair competitive advantage over those businesses that lawfully pay their share of employment taxes,” said U.S. Attorney David Gaouette.
“Business owners who steal employment tax withholdings victimize their employees,” said Christopher M. Sigerson, Special Agent in Charge, IRS Criminal Investigation, Denver Field Office. “IRS Criminal Investigation will continually investigate any criminal activity which threatens the future employment benefits earned by the American taxpayer.”
“The Labor Department is committed to vigorously enforcing the law to ensure that those who steal from contributory employee benefit plans are brought to justice,” said Steve Eischen, Regional Director of the Employee Benefits Security Administration's Kansas City Regional Office. “Our investigations under the Contributory Plans Criminal Project target those who prey on participants and beneficiaries of these plans.”
Counts one through eleven allege failure to pay over tax, which carries a penalty of not more than 5 years imprisonment, and up to a $10,000 fine, per count.
Counts twelve through eighteen allege theft from a employee benefit plan, which carries a penalty of not more than 5 years imprisonment, and a fine of up to $250,000.
This case was investigated by Internal Revenue Service Criminal Investigation (IRS CI) and the Department of Labor Employee Benefits Security Administration (DOL-EBSA).
The case is being prosecuted by Assistant U.S. Attorney Suneeta Hazra.
The charges contained in the Indictment are allegations, and the defendant is presumed innocent unless and until proven guilty.
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