Maryland Business Owner Sentenced to Two Years in Prison For Failing to Pay Over $1.4 Million in Taxes
Conduct Involved Personal Income Tax and Employment Taxes
WASHINGTON – A Maryland man was sentenced today to 24 months in prison for failing to pay over $1.4 million in federal personal income tax and employment taxes, announced U.S. Attorney Channing D. Phillips, Special Agent in Charge Thomas Jankowski of the Washington Field Office of the Internal Revenue Service-Criminal Investigation (IRS-CI), and Assistant Director in Charge Paul M. Abbate, of the FBI’s Washington Field Office.
James T. Redding, 48, of Reistertown, Md., pled guilty in August 2015 to one count of attempted tax evasion and one count of willful failure to collect or pay over tax. He was sentenced by the Honorable Senior Judge Royce C. Lamberth of the U.S. District Court for the District of Columbia. Following his prison term, he will be placed on three years of supervised release. Redding also must pay a total of $1,473,054 in restitution to the IRS.
“James Redding was a serial tax evader who committed numerous violations over a five-year period, resulting in a $1.4 million loss to the federal government,” said U.S. Attorney Phillips. “This investigation and prosecution show that there are significant consequences for those who try to avoid paying their fair share of taxes. Hopefully this case will deter others from committing such crimes.”
“For years, Mr. Redding defrauded the American tax system through deceptive personal and corporate tax returns,” said Assistant Director in Charge Abbate. “By evading his income tax and payroll tax obligations, he cheated the hard-working taxpayers in this country for his own personal gain. The FBI and the IRS will vigorously pursue justice against those individuals who commit tax fraud and evasion.”
“Today, Mr. Redding has to face the consequences of failing to report all of his income on his federal tax returns and paying the tax he owed,” said Special Agent in Charge Jankowski. “In today’s economic environment, it is imperative the American taxpayer feel confident that everyone is paying their fair share. When criminals evade their taxes, honest Americans end up having to pay more.”
According to court documents, Redding was the president, sole shareholder and sole director of James T. Redding, Inc., doing business as JTR Inc., JTR Finishing Contractors, and JTR Construction. The company was primarily engaged in the business of interior construction in the District of Columbia and Maryland.
Redding filed false and fraudulent tax returns for James T. Redding, Inc., for the 2009 and 2010 calendar years. He did not file returns for the corporation for the 2011, 2012, and 2013 calendar years.
Redding was required to report all of the corporation’s income on his personal tax returns and pay taxes for the income. For the tax years of 2009 through 2012, according to court documents, Redding filed false and fraudulent U.S. personal income tax returns on behalf of himself and his spouse. He and his spouse did not file a personal income tax return for the 2013 calendar year. The total income tax due and owing from the defendant and his spouse to the United States for the tax years 2009 through 2013 was approximately $600,000.
Finally, from the beginning of the fourth quarter of the 2010 calendar year through the fourth quarter of the 2012 calendar year, Redding willfully failed to pay over all of the federal income tax and Federal Insurance Contributions Act (FICA) taxes withheld from JTR employees. Instead of paying over the taxes that he knew were due, he used those funds to pay JTR creditors and for the benefit of himself and his family members. In total, JTR did not pay over $873,054 that was due to the IRS.
This case was investigated by IRS-Criminal Investigation and the FBI’s Washington Field Office, with assistance from the Office of Labor Racketeering and Fraud Investigations, Office of Inspector General, of the U.S. Department of Labor. Assistance also was provided by Criminal Investigator Juan Juarez, Financial Analyst Bryan Snitselaar, and Paralegal Specialists C. Rosalind Pressley and Toni Donato, all of the U.S. Attorney’s Office for the District of Columbia. The case was prosecuted by Assistant U.S. Attorney Anthony Saler, of the U.S. Attorney’s Office for the District of Columbia. Assistance was provided by Trial Attorney Kenneth C. Vert, of the Department of Justice’s Tax Division.