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Monday, July 8, 2019

Tulsa Man Pleads Guilty to Payroll Tax Fraud

Failed to Pay IRS Over $1 Million in Employment Taxes and Employee Withholdings

A computer software development company owner pleaded guilty today to failing to account for and pay over employment taxes withheld from his employees’ wages announced Principal Deputy Assistant Attorney General Richard E. Zuckerman of the Justice Department’s Tax Division and U.S. Attorney R. Trent Shores for the Northern District of Oklahoma. 

According to documents and information provided to the Court, as the owner and operator of Tulsa-based Zealcon Corporation, Earenest J. Grayson Jr. was responsible for withholding, accounting for and paying over to the Internal Revenue Service (IRS) payroll taxes and withholdings due on the wages paid to Zealcon employees. For the period, January 2014 through June of 2016, Grayson intentionally caused a total tax loss of more than $1 million by intentionally not paying to the IRS income and social security taxes withheld from Zealcon employees’ wages and social security taxes due from Zealcon on those wages.

“Failing to account for or pay payroll taxes is not acceptable,” said Principal Deputy Assistant Attorney General Zuckerman of the Justice Department’s Tax Division. “The Department of Justice, working with the IRS, will ensure that our tax system is fairly enforced throughout the country.”

“Earenest Grayson is a dishonest employer who cheated both his employees and the United States government of more than $1,000,000 in stolen payroll taxes. Some of those taxes were payments for the Social Security and Medicare coverage of the employees,” said U.S. Attorney Trent Shores. “I hope Mr. Grayson’s potential prison sentence will dissuade other business owners from trying to cheat the system. Millions of honest small businesses pay their fair share of taxes to finance government operations as well as Social Security and Medicare for the elderly. Unfortunately, Mr. Grayson’s choice not to do so has subjected him to criminal penalties.”

United States District Court Judge Claire V. Eagan scheduled Grayson’s sentencing for Oct. 3, 2019. 

The case was investigated by special agents of IRS-Criminal Investigation. Assistant Chief Andrew Kameros of the Tax Division and Assistant U.S. Attorneys Victor Régal and Charles McLoughlin are prosecuting the case.

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

Financial Fraud
Press Release Number: 
Updated July 8, 2019