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Press Release

Former Day Care Operator Pleads Guilty to Tax Fraud

For Immediate Release
U.S. Attorney's Office, District of Columbia
Defendant Failed to Turn Over Payroll Taxes Withheld from Employees

            WASHINGTON - Ruth G. Leach, 53, who owned and operated  a day care center in the District of Columbia, pled guilty today to a federal tax evasion charge for failing to turn over more than $260,000 in payroll taxes that were withheld from her employees, announced U.S. Attorney Channing D. Phillips and Special Agent in Charge Thomas Jankowski of the Washington Field Office of the Internal Revenue Service-Criminal Investigation (IRS-CI).

            Leach, of Upper Marlboro, Md., pled guilty in the U.S. District Court for the District of Columbia to a charge of willfully failing to pay over employment taxes. The charge, a felony, carries a statutory maximum of five years in prison and potential financial penalties. Under federal sentencing guidelines, Leach could face a likely range of 18 to 24 months in prison and a fine of up to $75,000. She also must pay $263,153 in restitution to the IRS. The Honorable Senior Judge Royce C. Lamberth scheduled sentencing for June 28, 2016.

            According to the government’s evidence, Leach owned and operated a business called Little Angels Child Care Center, Inc., which provided child care services for toddlers and young children. From 2006 through 2010, she ran the day-to-day operations of the business, which at various times employed several teachers and staff. She paid wages to her employees and deducted payroll taxes, including federal income, Social Security, and Medicare taxes.

            For the first quarter ending March 2006 through the fourth quarter ending December 2010, Leach willfully failed to truthfully account for the payroll taxes withheld from the wages of Little Angels Child Care Center employees. She failed to pay over a total of $263,153 in payroll taxes, instead keeping and using the funds for her personal expenses. She did not report this money in her own personal income taxes.

            In announcing the plea, U.S. Attorney Phillips and Special Agent in Charge Jankowski commended the work of those who investigated the case from IRS-Criminal Investigation. They also acknowledged the assistance of Paralegal Specialist Kristy Penny of the U.S. Attorney’s Office for the District of Columbia. Finally, they expressed appreciation for the work of Assistant U.S. Attorneys Lionel André and Derrick Williams, who prosecuted the case.

Updated April 19, 2016

Topic
Tax
Press Release Number: 16-068