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Tuesday, February 10, 2015

Former District of Columbia Technology Executive Pleads Guilty to Failing to Pay Employment Taxes

The former operator of the wireless technology company Distributive Networks LLC (Distributive Networks) pleaded guilty today in federal court to willfully failing to pay more than $900,000 in employment taxes, Acting Deputy Assistant Attorney General Larry J. Wszalek of the Justice Department’s Tax Division and the Internal Revenue Service (IRS) announced.

Kevin Bertram pleaded guilty to a criminal information filed in the U.S. District Court for the District of Columbia.  According to court documents, Bertram operated Distributive Networks from 2004 through 2010.  Distributive Networks was a wireless technology company located in the District of Columbia.

According to court documents, Bertram was responsible for Distributive Networks’ federal tax obligations and he failed to account for and pay employment taxes due and owed to the IRS.  From late-2007 through mid-2009, Bertram failed to file IRS Forms 941 (Employer’s Quarterly Federal Tax Returns) and failed to pay $927,922 in employment taxes that he had withheld from his employees’ wages.  These taxes included federal income, social security and Medicare taxes that the company was required to withhold from its employees’ wages, as well as the company’s portion of social security and Medicare taxes.

As a condition of the plea agreement, Bertram is required to make restitution to the IRS.  Bertram also faces a statutory maximum sentence of five years in prison and a maximum fine of $250,000.  U.S. District Court Judge Amy Berman Jackson set sentencing for May 5.

The case was investigated by special agents from IRS-Criminal Investigation and prosecuted by Trial Attorneys Melissa S. Siskind and Jeffrey A. McLellan of the Tax Division.

Updated May 18, 2016