Berkeley Resident Sentenced to Prison for Employment Tax Crimes

OAKLAND – Larry Kudsk was sentenced today to 12 months in prison for willfully failing to account for and pay over employment taxes announced U.S. Attorney Ismail J. Ramsey and Internal Revenue Service, Criminal Investigation (IRS-CI), Special Agent in Charge Darren Lian. The sentence was handed down by the Hon. Jeffrey S. White, U.S. District Judge.

Kudsk, who resides in Berkeley, pleaded guilty to the charge on August 2, 2022. According to court documents, Kudsk operated two construction businesses, Kudsk Construction Inc. and M. Gutierrez Inc. These companies served as general contractors or subcontractors on various construction projects, including some government projects. For both companies, Kudsk was responsible for filing quarterly employment tax returns and collecting and paying to the IRS employment taxes withheld from employees’ wages. Kudsk, however, did not timely file employment tax returns nor pay over tax withholdings to the IRS, for M. Gutierrez, Inc. for the four quarters of 2014 and the last three quarters of 2015, and for Kudsk Construction Inc. for all for quarters of 2016. In all, Kudsk caused a tax loss to the IRS of more than $250,000.

A federal grand jury indicted Kudsk on February 3, 2022, charging him with seven counts of willfully failing to pay over employment taxes, in violation of 26 U.S.C. § 7202. Kudsk pleaded guilty to one count.

In addition to the term of imprisonment, U.S. District Judge Jeffrey S. White ordered Kudsk to serve three years of supervised release and to pay and $244,973 in restitution to the United States. Judge White ordered Kudsk to self-surrender on August 15, 2023, to begin his prison term.

IRS-Criminal Investigation investigated the case.

Assistant U.S. Attorney Katherine Lloyd-Lovett of the U.S. Attorney’s Office for the Northern District of California and Trial Attorney Julia M. Rugg and Charles A. O’Reilly of the Justice Department’s Tax Division prosecuted the case.