Virginia Beach Businessman Pleads Guilty to Tax Crime
For Immediate Release
U.S. Attorney's Office, Eastern District of Virginia
NORFOLK, Va. – A Virginia Beach man pleaded guilty today to failing to pay nearly $1 million in payroll taxes to the IRS.
According to the statement of facts filed with the plea agreement, Michael Popina, 61, was the president and owner of Chesapeake Coatings & Decks, Inc., (CCD) a painting and sandblasting company hired primarily by government contractors and marine businesses. As part of its tax obligations, CCD had a duty to withhold from its employees’ paychecks certain federal taxes and pay the monies over to the IRS. During tax years 2010-2013, Popina failed to pay to the IRS approximately $130,000 in these withheld payroll taxes.
During an IRS investigation of Popina, agents learned that Popina utilized an additional scheme to avoid paying payroll taxes. Popina would spread his employees’ regular pay into two separate checks. The first payroll check was sent to Popina’s payroll company, taxes were withheld, and the income was reported to the IRS. However, the second payroll check was not sent to the payroll company, taxes were not withheld and the income was not reported to the IRS. The court records indicate that Popina utilized this system because his business was poorly managed and that he used the tax savings to continue keeping the business in operation. Investigators concluded that Popina failed to account for approximately $4 million using this system and that he failed to pay to the IRS a total of approximately $950,000 in payroll taxes.
Popina pleaded guilty to failure to pay over payroll tax, and faces a maximum penalty of 5 years in prison when sentenced on October 2. Actual sentences for federal crimes are typically less than the maximum penalties. A federal district court judge will determine any sentence after taking into account the U.S. Sentencing Guidelines and other statutory factors.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; and Kimberly Lappin, Special Agent in Charge, Washington, D.C. Field Office, IRS-Criminal Investigation (IRS-CI), made the announcement after U.S. Magistrate Judge Lawrence R. Leonard accepted the plea. Assistant U.S. Attorney Joseph L. Kosky is prosecuting the case.
A copy of this press release is located on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information is located on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 2:17-cr-68.
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Updated June 23, 2017