Virginia Pharmacy Owner Sentenced to Prison For $5 Million Employment Tax Fraud
A Collinsville, Virginia, pharmacist was sentenced to 41 months in prison today for 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 U.S. Attorney Thomas T. Cullen for the Western District of Virginia.
According to court documents, Jerry R. Harper, Jr., 61, owned and operated Family Discount Pharmacy Inc. (FDP) in Stanleytown, Virginia, with multiple pharmacy locations in Stuart, Rocky Mount, Chatham, and Brosville, Virginia. As owner of FDP, Harper was responsible for collecting and paying over FDP’s employment taxes. From 1998 through 2014, FDP accrued employment tax liabilities of more than $5 million. Harper withheld these taxes from FDP employees’ wages, but did not pay the taxes to the Internal Revenue Service (IRS). In over 15 years, Harper only filed one quarterly employment tax return with the IRS.
Harper admitted that instead of paying the employment taxes to the IRS, he caused FDP to pay his personal expenses, including the purchase of a Jeep Grand Cherokee and a jet ski. For example, Harper wired over $1 million to his personal bank account, made over $500,000 in stock market investments, spent over $100,000 on his son’s pharmacy school tuition, and purchased over $370,000 of real property in Virginia and North Carolina.
In addition to the term of imprisonment, U.S. District Court Judge Elizabeth K. Dillon ordered Harper to serve 2 years of supervised release and to pay restitution in the amount of $5,069,555.73 and a fine of $25,000.00. Principal Deputy Assistant Attorney General Zuckerman and U.S. Attorney Cullen commended special agents of IRS Criminal Investigation, who conducted the investigation, and Tax Division Trial Attorney Allison Garnett, former Tax Division Trial Attorney Daniel McGraw, and Assistant U.S. Attorney Charlene Day, who prosecuted the case.
Additional information about the Tax Division and its enforcement efforts may be found on the division’s website.