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Press Release

Owner of Virginia Auto Repair Shop Pleads Guilty To Employment Tax Fraud

For Immediate Release
Office of Public Affairs

The owner of a Virginia auto repair shop pleaded guilty today to failing to account for and pay over employment taxes, announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division and Acting U.S. Attorney Tracy Doherty-McCormick for the Eastern District of Virginia.  

According to court documents, Michael Ragsdale resided in Ashburn, Virginia, and owned and operated Foreign Service Auto (FSA), an auto repair business located in McLean, Virginia.  Ragsdale had decision-making authority over the business’s activities and controlled the business’s finances.  He was responsible for withholding employment taxes from FSA’s employees, paying the taxes over to the Internal Revenue Service (IRS), and filing its employment tax returns.  Despite this obligation, Ragsdale did not pay to the IRS employment taxes withheld from employee paychecks.  In total, between 2008 and 2014, Ragsdale’s conduct caused a total tax loss to the IRS of approximately $370,848. 

U.S. District Judge Liam O’Grady scheduled sentencing for September 7, 2018.  Ragsdale faces a statutory maximum sentence of five years in prison.  He also faces a period of supervised release, restitution, and monetary penalties.

Principal Deputy Assistant Attorney General Zuckerman and Acting U.S. Attorney of Justice Doherty-McCormick commended special agents of IRS Criminal Investigation, who conducted the investigation, and Tax Division Trial Attorney Melanie Smith and Assistant U.S. Attorney Matthew Burke, who are prosecuting this case.

Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.

Updated May 2, 2018

Press Release Number: 18-562