Virginia Business Owner Pleads Guilty to Not Paying More Than $600,000 in Employment Taxes

A former Hampton, Virginia business owner pleaded guilty today to failing to pay over employment taxes, announced Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division.

According to documents filed with the court, John E. Manley, 71, owned and operated Manley’s Service Co. Inc. (MSC), a heating, ventilation and cooling maintenance business in the Hampton, Virginia area since 1971. As president of MSC, Manley exercised significant control over the firm’s financial affairs and had final decision-making authority regarding its business activities. Between 2010 and 2014, Manley failed to pay over to the Internal Revenue Service (IRS) $611,564.83 in payroll taxes and, beginning in March 2012, he caused MSC to stop filing employment tax returns. Manley also filed personal income tax returns for 2010 through 2014 on which he falsely reported that MSC had withheld payroll taxes from his wages and paid the withholdings to the IRS. He caused MSC to stop timely filing corporate tax returns after 2010. Manley has admitted to causing a tax loss of more than $929,491.

Sentencing is scheduled for Sept. 22. Manley faces a statutory maximum sentence of five years in prison, a period of supervised release, restitution and monetary penalties.

Acting Deputy Assistant Attorney General Goldberg commended special agents of IRS Criminal Investigation, who conducted the investigation, and Trial Attorneys Robert J. Boudreau and David Zisserson of the Tax Division, who are prosecuting the case with assistance from the U.S. Attorney’s Office for the Eastern District of Virginia.

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