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Justice News

Department of Justice
U.S. Attorney’s Office
District of Delaware

Monday, October 7, 2013

CEO Of Local Company Sentenced To 30 Months Imprisonment For Pocketing Employee Payroll Tax Withholdings

Charles Smith, age 54, of Bear, Delaware, was sentenced to thirty months imprisonment by the Honorable Gregory M. Sleet, Chief Judge of the United States District Court for the District of Delaware on Friday, October 4th, after pleading guilty to failing to account for and pay over his employees’ payroll taxes.  Charles M. Oberly, III, United States Attorney for the District of Delaware, announced the sentence today.  Smith pled guilty to ten counts of Failure to Truthfully Account For and Pay Over Payroll Taxes, in violation of Title 26, United States Code § 7202.

Smith was the Chief Executive Officer of eShowings, a company which provides online and telephone appointment services for real estate professionals.  eShowings has offices in Newark, Delaware, North Carolina, and Kansas.  As the founder and CEO of eShowings, Smith was responsible for ensuring that employees’ payroll tax withholdings were paid over to the government.  Instead, Smith took money deducted from employees’ paychecks and spent it personal items for himself and his family.  At the sentencing hearing, the Court noted that Smith had spent the money on vacations, gambling, a pontoon boat, and other personal expenses.

United States Attorney Charles M. Oberly stated of the prosecution, “My office is committed to protecting the hardworking wage earners who think they are meeting their tax obligations from unscrupulous employers who victimize them and fail to pay their share to the government.”

“Business owners have a responsibility to withhold income taxes for their employees and then remit those taxes to the Internal Revenue Service,” said IRS Special Agent in Charge Akeia Conner.  “The failure to pay over withheld taxes is a serious offense.  Friday’s sentencing shows that IRS Criminal Investigation, the United States Attorney's Office and the District Court of Delaware are all in accord regarding the seriousness of this offense.”

This case was investigated by Jacqueline Zebley of the IRS, and was prosecuted by Assistant United States Attorney Jennifer K. Welsh.
Updated July 14, 2015