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Justice News

Department of Justice
U.S. Attorney’s Office
Middle District of Pennsylvania

FOR IMMEDIATE RELEASE
Tuesday, February 13, 2018

Shavertown Bookkeeper Sentenced To 38 Months’ Imprisonment For Embezzling Nearly $450,000 And For Obstructing The IRS

SCRANTON – The United States Attorney’s Office for the Middle District of Pennsylvania announced today that Richard J. Morgan, age 54, of Shavertown, Pennsylvania, was sentenced by United States District Court Judge James M. Munley to 38 months’ imprisonment and five years of supervised release, for committing bank fraud and interfering with the administration of the internal revenue laws. Morgan was also ordered to pay $494,618.85 in restitution to his victims and the IRS.

According to United States Attorney David J. Freed, Morgan owned and operated Wilkes-Barre Bookkeeping LLC, a Shavertown, Pennsylvania-based business that provided payroll services to its clients.  Local businesses contracted Morgan to pay employee payroll and salary expenses, to file IRS Form 941 Employer Quarterly Federal Tax Returns, and to remit employment tax liabilities to federal, state and local taxation authorities.  For three of his clients, Morgan failed to file the IRS Forms 941 and remit the employment taxes to the appropriate authorities, instead embezzling the funds for his own personal use.  Between March 2010 and October 2016, Morgan embezzled $376,224.85 from those clients, all while lying to them about his activities.

Morgan also served as a Treasurer for a non-profit corporation and was tasked with selling its assets and winding up its operations when it closed in February 2010.  Instead, after paying the non-profit corporation’s outstanding liabilities, Morgan embezzled the remaining residual sales proceeds of $68,172.

When the IRS commenced an investigation of Morgan’s activities, he took steps to impede the revenue agents and conceal his embezzlements.  Morgan claimed to be working with fictitious IRS employees to resolve the matter, and provided the IRS with altered bank statements and accounting records.  Morgan owes the IRS approximately $50,222 for unpaid taxes on his embezzled funds.

In pronouncing the sentence, Judge Munley highlighted Morgan’s attempts to conceal his activities from the IRS, and that Morgan continued embezzling funds from one of his clients even after becoming aware of the federal criminal investigation into his activities.  Judge Munley also focused on Morgan’s use of the embezzled money to fund life luxuries, and the damages he inflicted on local small businesses and non-profit organizations.

The investigation was conducted by the Internal Revenue Service, Criminal Investigation Division.  Assistant United States Attorney Phillip J. Caraballo prosecuted the case.

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Topic(s): 
Tax
Updated February 13, 2018