Longtime Employee of Harford County Manufacturer Sentenced to 42 Months in Federal Prison for a $20 Million Kickback Scheme
Baltimore, Maryland – John H. Worthington, age 60, of Owings Mills, Maryland, pleaded guilty yesterday to federal charges for willful failure to account for and pay over employment taxes and for filing a false personal tax return. Worthington admitted that he evaded payment on taxes due and owing to the United States of at least $2,813,348.94.
The guilty plea was announced by Erek L. Barron, United States Attorney for the District of Maryland; Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division; and Acting Special Agent in Charge Kareem A. Carter of the Internal Revenue Service - Criminal Investigation, Washington, D.C. Field Office.
According to court documents and statements made in court, Worthington owned and operated The Grill at Harryman House restaurant since 1995. As part of managing the restaurant, Worthington issued Forms W-2 to his employees and withheld federal income taxes and Social Security and Medicare (“FICA”) taxes from their wages. Worthington admitted that from 2010 through 2021, he did not file with the IRS the required Employer’s Quarterly Federal Tax Returns (Forms 941) reporting these employment taxes and did not pay the withholdings over to the IRS. As detailed in his plea agreement, instead of meeting his tax obligations, Worthington used funds from his business to pay other creditors and for a variety of personal expenses, including golf club membership dues, season tickets to the Baltimore Orioles, international vacations, and salaries for himself and his wife. In total, Worthington did not report or pay approximately $2,813,348.94 in employment taxes due and owing to the IRS.
Additionally, Worthington filed a joint 2016 personal tax return (Form 1040) that falsely claimed $24,207 in federal income tax withholdings from his own wages from the restaurant, which he knew had not been paid to the IRS. This resulted in a $9,096 refund to which he was not entitled. Had Worthington accurately reported $0 in withholdings for that year, he would have owed $15,111.
According to his plea agreement, Worthington also failed to timely file his personal income taxes for tax years 2017 through 2021, despite having received wages and compensation from the restaurant. Worthington also failed to timely file corporate tax returns for tax years 2016 through 2021, even though the corporation was active and generated gross receipts or sales of more than $15 million during that time frame.
Worthington faces a maximum penalty of five years in prison for willfully failing to account for and pay over the employment taxes and three years in prison for filing a false tax return. He also faces a period of supervised release, monetary penalties, and restitution. U.S. District Judge Julie R. Rubin has scheduled sentencing for September 13, 2023, at 2:00 p.m.
U.S. Attorney Erek L. Barron and Acting Deputy Assistant Attorney General Stuart M. Goldberg commended the IRS-CI for its work in the investigation and thanked Assistant U.S. Attorney Sean R. Delaney and Assistant Chief Jorge Almonte and Trial Attorney Matthew L. Cofer of the Justice Department’s Tax Division, who are prosecuting the case.
For more information on the Maryland U.S. Attorney’s Office, its priorities, and resources available to help the community, please visit https://www.justice.gov/usao-md and https://www.justice.gov/usao-md/community-outreach.
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