Delaware County Accountant Charged With Multiple Tax Offenses

PHILADELPHIA – United States Attorney William M. McSwain announced that Myles Hannigan, 48, of Newtown Square, Pennsylvania, was charged by Information with one count of obstructing the due administration of the Internal Revenue Service (IRS), and seventeen counts of preparing materially false income tax returns.

Hannigan owned and operated Payroll Professionals, Incorporated (“PPI”), which operated out of Media, Pennsylvania.  PPI is a third-party payroll processor that assists its clients by issuing payroll checks and forwarding tax payments to federal, state, and local authorities.  PPI’s clients were small to medium-sized businesses, and the clients relied on Hannigan to prepare and file Form 941 with the IRS.  Form 941 details employee wages that were paid by a company and income tax withheld and paid to the IRS based on those wages. 

Beginning in January 2012 and continuing up to December 2016, Hannigan allegedly prepared and submitted Form 941s that falsely reported information to the IRS.  In particular, Hannigan reported depositing more money to pay tax debt than he actually had sent to the IRS, causing 35 of PPI’s client companies (who are considered victims in this case) to collectively underpay the IRS $3,270,566.89 for those tax years.  These victims/companies gave Hannigan access to all necessary funds to pay the full tax debt, but Hannigan allegedly failed to do so.  Hannigan hid his behavior from these victims/companies by presenting bogus documents that purported to be confirmation of payments of taxes he had made to the IRS on their behalf, and by re-directing IRS correspondence to his business address.  In essence, Hannigan is alleged to have operated a “Ponzi scheme” of borrowing from one client’s money to pay the debts of another, which collapsed when the interest and penalties owed to the IRS (which he was hiding from clients) became too big to hide.

“As alleged in the Information, this defendant – an accountant in business to handle payroll taxes – committed fraud and stole from clients and the United States government,” said U.S. Attorney McSwain.  “He also stole from the pockets of all taxpayers who do the right thing by paying their taxes.  It will continue to be a priority of my Office to bring tax cheats to justice and thereby protect honest taxpayers.”

If convicted, the defendant faces a maximum possible sentence of up to 54 years in prison, one year of supervised release, a fine of up to $1,805,000, and a special assessment of $1,800.

The case was investigated by the Internal Revenue Service (IRS), and the Treasury Inspector General for Tax Administration (TIGTA), and is being prosecuted by Assistant United States Attorney Jason P. Bologna.

An indictment, information, or criminal complaint is an accusation. A defendant is presumed innocent unless and until proven guilty.